Future Scenarios for Air Traffic Service Providers

This picture shows four possible future scenarios for Air Traffic Service providers in Europe. You can read the scenarios by clicking on the relevant box.

'IT WAS THEIR FAULT':

In this world, disparate and uncoordinated national providers, supplying services to many different airlines under differing technical and operational standards, dominate service provision.

Fragmentation at the level of the state means that development of new technologies and procedures, which could improve capacity, is slow and expensive. Co-ordination and agreement at ICAO and Eurocontrol requires lengthy negotiation and although all nominally all participants agree about what could be, the first priority of each member is to look after national interests. Limited progress is made, and what there is it is slow.

Little co-operation or trust exists between the different players, but an emphasis on safety, independently, means that considerable time and effort goes into tying responsibility and risk down between the players, adding to ATSP costs, diverting technical and procedural improvements and affecting system architecture. Service Level Agreements proliferate to cover all eventualities. Some local alliances form, but these have insufficient weight to provide the critical mass of technology take-up needed to allow the implementation of technical solutions that could meet increasing demand. As a result of slow implementation, current ATSP practices tend to continue and considerable effort is expended to ensure that delays can be blamed on another party. Large legal and PR teams abound to support a blame culture, delaying further any chance of co-operation over technological or procedural change. This is a strategy supported by unions because low innovation reduces the chance of large changes in employment levels and working practices but also does not challenge the value placed on safety.

Back to Picture

'PROFIT PARIAHS' :

A CONTROLLED DEVELOPMENT SCENARIO

This world is also characterised by technical diversity and an inability to co-operate and co-ordinate among ATSPs. The impact of this lack of co-operation on delay is reduced when compared with the preceding scenario, as the providers are willing to sacrifice some safety to increase capacity and, consequently, revenue. Profit/Cost Reduction is a more important driving motive than safety in this world, profit where privatised suppliers operate and cost reduction where suppliers are public sector. Which ever is the case, the emphasis is to sweat the technical and human assets to squeeze every bit of capacity out of the system.Air Traffic Service Provision becomes a cut-throat business with price competition, differentiation of services, and innovative attempts to identify niche markets. In some areas, GA aviators will be forced to contribute more directly to ATSP's, reducing the popularity of hobby and private flying. Competition will result in large swings in demand for individual providers as they win and lose market share. There will be a major move away from information sharing as players seek competitive advantage and performance transparency will decrease. National regulators might wish to maintain strong reporting requirements, but national pressure to maintain the competitiveness of 'their' supplier will militate against this. As the number of safety incidents increases, companies will make moves to apply smoke and mirrors to their safety performance. Overall, the sum of the build up of delays, secrecy and dissembling, and increase in accidents will provide the press with an easy target. ATSPs will emerge as one of the leading sinks for public calumny.

Back to Picture

'JUST AN OVERHEAD' :

A SURVIVAL OF THE FITTEST SCENARIO

While also exhibiting the near monopolistic structure for ATM services, and the resulting benefits of both economies of scale and easy technical solutions to capacity demands, in this world the emphasis on safety is played down at the expense of reducing costs. This affects both the attitude to technical innovation and the regard in which ATSPs are held by the airline alliances. As a result, technological improvements rapidly emerge and replace or automate most traditional ground-based systems, and the perceived need for ground-based safety nets rapidly dies as it is seen as an unnecessary overhead. ATC procedures are quickly amended (sometimes with limited validation) to achieve the technological limit of airspace capacity, rather than one constrained by safety margins. Ground-based systems may persist in third-world areas that miss the benefits of globalisation-or in other areas where capacity is not a driving concern due to low air traffic density. The unified structure of the domain, and low regard for the importance of an ATSP role means that separate elements of the service provision consolidate rapidly, are less distinguishable and, over time, the useful assets of the ATSPs are absorbed into the 'aviation conglomerate' oligopoly with limited back-stop against failure. An emphasis on cost reduction/profit (as opposed to a more publicly-focused attitude) means that support for GA is squeezed out of the system, unless the users are willing to pay a significant price for the privilege of flying. The limited number of providers means, of course, that there is little scope for competition. For aircraft operators, pressure to reduce the overhead element of ATM services will be greatest in down-cycles or during spikes in fuel prices.

Back to Picture

'ALL IN THIS TOGETHER' :

A CONSUMERISM SCENARIO

As the state has stepped back, airline consolidation has occurred, reducing excess capacity and increasing flexibility through global alliances. ATSP is a minority player and is heavily influenced by the airlines. The amount of co-ordination required to introduce new technologies is greatly reduced as there are only three global airline alliances and national concerns play little part in decisions. There are strong incentives to implement technical and procedural changes and once an objective has been agreed, although a strong safety emphasis means that these are not always implemented immediately. This sometimes results in a small disparity between demand and capacity, but the resulting delays are generally accepted as the price to be paid for safety.

Competition among the alliances is somewhat limited, although airlines continuously review their choice of airport hubs and try to be ahead of competitors in creating a small number of new hubs. National boundaries are barely an issue in such decisions, ATSPs are extensions of the alliances, and a single unified face presented to the world.

The domain is be quasi-monopolistic and ATM planning and provision is a team-based activity within the alliances. Where competition exists it does not affect inter alliance co-operation in ATSP strategy (which is an exception to monopoly rules). There is also common emphasis on public safety, which arises from airlines' desire to avoid damage to their reputation. ATSPs enjoy benefits of scale and cost through co-operating technical systems in all parts of the value chain. It may be either private or publicly owned, but global airlines and strong consumers are the dominating influence. Nonetheless, for image sake the alliances ensure that GA continues to have access to the airspace.

If national planning systems decide to take on the airlines, traffic goes elsewhere so the nation loses economic standing. The role of ATSPs (although invisible to the ultimate customer) changes, although not too quickly because of the cautious approach to introducing technology. Regard for safety means an enduring respect for ATSPs, and they retain a valued and differentiated role in providing a 'safety net' service in case of problems or dangers arising in the system.

Back to Picture