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As we discussed in this month’s Aviation Intelligence Reporter, more needs to be done to address airspace congestion and government-driven initiatives such as SESAR shouldn’t be relied upon to address the issue. Just doing what we are currently doing faster is not a solution.
In Europe, ANSPs are now starting to face financial incentives to improve their on-time performance. As part of the Single European Sky initiative, ANSPS face losing up to 1% of their revenue if they do not meet prescribed targets for en-route delays. They may also receive up to 1% in additional revenue if they exceed these targets.
The question remains, however, as to whether 1% of revenue is a sufficient incentive for ANSPs to make the necessary changes and investments to increase capacity. The European financial incentive scheme should, at least, encourage ANSPs to address some of the low-hanging fruit. Taking relatively simple and inexpensive measures could make a difference. However, it may also mean that expensive investments that could be economically beneficial to the aviation industry will not occur.
For some airlines, the cost of missing the on-time performance targets could be greater than the 1% of an ANSP’s revenue they would receive as compensation. These airlines would therefore be willing to pay more to avoid delays. Consequently, there is a risk that expensive investments that would be beneficial to airlines – and which they would therefore be willing to fund – may not occur as an ANSP could make a similar (or even higher) profit by doing nothing and paying the financial penalty. Everyone’s a loser.
As we suggested in the original article, congestion pricing (with fees being waved if the airspace is not delivered in accordance with an agreed filed and accepted flight plan) could be part of the solution. Congestion charges could take the form of individual agreements with airlines to meet a minimum delay target for an agreed price that would reflect the target as well as the cost to the airline and passengers of delays. Similar sorts of service level agreements with airlines already occur in the airport sector.
During congested periods, airlines whose service level agreements are at risk of not being met would take priority, with airlines that place a lower value on flight time facing diversions. Should the ANSP fail to deliver the agreed delay target, it would wave the charges or even be required to make a payment to the airline. In this way, the ANSP would be incentivised to make congestion-reducing investments that its customers value, and are willing to pay for.
