1. Performance Review Commission 16 July 2012 Keld Ludvigsen Chairman Performance Review Commission Member of Performance Review Body Total Economic Value (TEV) Symposium

2. 2 Performance Review Commission A well known concept ‘To reduce the direct and indirect ATM- related costs per unit of aircraft operations.’ Air Traffic Management Strategy For The Years 2000+, Approved January 2000

3. 3 Performance Review Commission Context & background The Total Economic Value (TEV) Is an attempt to monetarise direct and indirect ANS costs borne by airspace users Provides a consolidated view of estimated ANS-related costs Does not include safety in the calculations

4. 4 Performance Review Commission ANS-related economic costs

5. 5 Performance Review Commission The performance process and KPAs Target setting at European level Target setting at national/FAB level Assesment of PPs at European level Monitoring of PPs at national/FAB level Monitoring of PPs at European level Safety Cost Efficiency EnvironmentCapacity

6. 6 Performance Review Commission The PRB use of TEV so far Target setting  Partially done for RP1 targets  No specific KPIs targets on TEV  Not mature for target setting  Would blur accountability Assessment of PPs  Was taken into account during first loop of PPs assessment  Partially done in the second loop of PPs assessment Monitoring PPs  Overall economic performance of service provision  Performance of one KPA/KPI deteriorates but overall performance improves

7. 7 Performance Review Commission What are the advantages of using the TEV? Consolidated view, easy to understand Enables to express all KPIs in monetary terms (except Safety) Visualises the relative weight of the different KPAs and priorities of policy objectives Provides a high level framework to illustrate interdependencies and trade-offs among KPAs over time Genuine opportunity for a State/FAB to contribute to the overall performance improvements while taking local circumstances and priorities into account.

8. 8 Performance Review Commission Methodological issues related to the TEV No commonly agreed methodology The TEV calculation is: dependent on exogenous factors outside ANS control relies on assumptions for the monetarisation of ANS related inefficiencies Limitations in measuring precisely some ANS-related indirect costs Flight efficiency is primarily a network issue En-route KPIs are well established but ANS performance at airports is still a relatively new area

9. 9 Performance Review Commission Ability to drive the “right” behavior? Could reduce clear accountabilities for achieving performance improvements Could lead to the misconception that improvements in one area have to come at the detriment in another area Might lead to trade-offs between KPIs with different user groups Might be misused as a justification to trade-off between KPIs with ‘hard’ incentives and KPIs without ‘hard’ incentives

10. 10 Performance Review Commission Way forward A potential useful and powerful tool Need to better frame the TEV concept Build trust amongst all stakeholders Evolution not revolution

11. 11 Performance Review Commission Any questions?