Benchmarking of Air Navigation Services Providers by the Use of Composite Flight Hours; True or False?

European Air Traffic Management appears to be, in comparison to other similar systems in the world, cost inefficient and therefore constantly under pressure of airspace users to optimize. Benchmarking results are valuable for managerial decision making processes, however it is safe to assume that the methodology used, favours a narrow segment of ANSPs. By improvements introduced through this study, in particular in computing the Composite Flight Hours, the managerial decision-making process could most probably be more adequately supported.


Introduction
European Air Traffic Management (ATM) is considered to be relatively inefficient.It is a business that costs the airspace users around €8 billion per year (European Commission, 2010), which is around €2-3 billion per year more than other similar ATM systems in the world.This clearly calls for a change.
European Commission already in 2005 introduced the Single European Sky initiative, which is supposed to reduce delays and increase capacity by a factor of 3, improve safety by a factor of 10, reduce by 10% an impact of air travel on the environment and reduce ATM costs by 50% (SESAR Joint Undertaking, 2009).This all is to materialise through Single European Sky ATM Research Programme (SESAR), which is supposed to deliver new revolutionary technologies and on the other hand through organisation of airspace into functional blocks, according to traffic flows and not according to national borders.
Single European Sky second package (SES II) introduced in 2008, established performance targets in the domain of safety, capacity, effectiveness and environmental impact (EUROCONTROL, 2013).
In parallel to the activities done by the European Commission, The European Organisation for the Safety of Air Navigation (EUROCONTROL), already in 1998, through the Performance Review Commission (PRC) and Performance Review Unit (PRU), introduced performance review of Air Navigation Services Providers (ANSPs) and their target setting with guidelines to states on economic regulation (EUROCONTROL, 2013a).

Background
ANSPs are constantly pushed by the airspace users to deliver more for the same amount of money, to offer more capacity and to improve in all aspects.This resulted in the adoption of the European Commission decision in 2012, which has set the pan European performance targets for the provision of air navigation services for the first reference period until 2014.
One of the main inputs for benchmarking is the EUROCONTROL PRU/PRC ATM Cost-Effectiveness (ACE) benchmarking (EUROCONTROL, 2011).The ATM Cost-Effectiveness Benchmarking Report, which now covers 37 European states, has been regularly issued since 2002.Alternative to this report is the Civil Air Navigation Services Organisation (CANSO) Global Air Navigation Services Performance Report, which has previous year been issued for the second time in the row (CANSO, 2011).CANSO report focuses only on selected global ANSPs that have volunteered to be benchmarked.
Both reports are benchmarking similar issues by the use of similar factors and similar variables.They are trying to be as much objective as possible by taking into consideration both exogenous (factors outside the control of ANSP) and endogenous (factors entirely under the control of the ANSP) factors that can influence the ANSP performance.
Both reports also clearly state that the benchmarking is performed by factual analysis only and that methods for a proper normative analysis still need to be further developed.In this paper only ATM Cost-Effectiveness Benchmarking Report is further scrutinized.
Significant work has been done regarding the ATM performance optimisation.However authors of this paper were not able to find any paper that would challenge the use of Composite Flight Hours (CFH) in the recognized methods of benchmarking.
Since EUROCONTROL and CANSO benchmark the ANSPs with uniform methodology, regardless of the fact that the size of the ANSPs varies by the factor of 10 and that the amount of traffic also varies significantly per ANSP, the outcome of the benchmarking can hardly be considered as entirely objective.It is similar as if someone would benchmark cars ranging from sports cars to off-road cars with the same Key Performance Indicators (KPIs), not taking into consideration the particularities of the particular car class; simply assuming that a car is a car and disregarding that a particular car class services dedicated customer needs.Results of such benchmarking would surely not help the customers to take proper decisions.
The CFH in the ATM Cost-Effectiveness Benchmarking Report play significant role in the results and therefore deserve to be challenged. .̅

Air Traffic Control Officer (ATCO)-Hour Productivity
(1) In (1) the CFH are defined as the sum of the En-route Flight Hours (EFH) and IFR Airport Movements (IAM) multiplied by a factor; while AH are defined as the Total number of ATCOs (N ATCOs ) multiplied by the Average ATCO-Hours on duty per ATCO per year (t ̅ year ).The output of these calculations is the graph in Figure 1, similar to the graph in the ATM Cost-Effectiveness (ACE) 2009 Benchmarking Report showing the rank of the ANSPs per ATCO-Hour Productivity.Data for 2009 are used since the structure of the ACE Benchmarking Reports from 2010 on changed significantly, ceasing to provide some relevant data (e.g.average overflying times per ANSP), important for proper analysis.Nevertheless calculations presented in this study have been verified also with the available data form later ACE Benchmarking reports, proving consistency of the results.

The results
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The comp mirror of t of the outm results.geographical area of responsibility was to take over the service provision of another ANSP, originating from that area, that ANSP would still have to overcame the same barriers or constraints as the original ANSP.Judging from that it is safe to assume that resulting from this action there would hardly be any synergy in enhancement of efficiency but would rather downgrade a bit the efficiency of the larger ANSP.This paper proved that slight adjustment of the methodology leads to entirely different results.This supports the hypothesis that CFH, the way they are specified now, definitely influence the results of efficiency metrics, especially ATCO-Hour Productivity; according to the opinion of the authors, the current PRU/PRC favours, as already indicated above, larger ones with a lot of terminal traffic.

EUROCO
The proposed methodology of effective flight hours weighted by a factor of average overflying time gives only one example on how composite flight hour benchmarking methodology could potentially be improved (Figure 6).The sole purpose of benchmarking is to support decision-making.By improvements introduced the managerial decision-making process essential for ANSP cost-efficiency improvements would most probably be more adequately supported.
EUROCONTROL PRU/PRC has set up the KPIs out of which the Financial Cost-Effectiveness -The European Air Traffic Management/Communication, Navigation Surveillance (ATM/CNS) provision costs per composite flight hour with the sub-set of KPIs is important for the purpose of this study.Sub set of KPIs is the following:  ATCO hour productivity i.e. efficiency with which an ANSP utilizes the ATCO man-power;  ATCO employment costs per ATCO hour;  ATCO employment costs per composite flight hour; For the purpose of this study mainly ATCO-Hour Productivity will be further scrutinized.According to PRU/PRC Methodology ATCO-Hour Productivity (AHP) is calculated by dividing Total Composite Flight Hours (CFH) by Total ATCO-Hours on duty (AH):