ANNUAL REPORT 2010

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Annual Report

Polish Air Navigation Services Agency (“PANSA”)

for the year 2010

Our Mission

To provide high-quality, user and environment friendly air navigation services.

Our Vision

To strengthen PANSA‟s position in Europe as an economically competitive air

navigation services provider offering top safety and quality services in response to

the airspace users‟ expectations.

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Contents

Foreword by the President of Polish Air Navigation Services Agency 3

Key data for 2010 5

Scope of activity 7

Strategic goals 8

Organizational structure 9

Significant events in 2010 10

Safety, Airspace, Air Navigation Services 12

ATM/CNS infrastructure 17

Aeronautical Information Services (AIS) 19

Investment projects 20

Environmental activities 21

Human resources policy 24

Consultations with Air Navigation Services Users 27

International cooperation 28

Operational performance in 2010 29

Financial results in 2010 34

PANSA’s performance versus other European ANSPs’ results 37

Independent Auditor’s opinion 42

Financial statements and accounts 44

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Foreword by the President of Polish Air Navigation Services Agency

The third, full year of Polish Air Navigation Services Agency’s autonomous business

activity was mostly affected by the challenge of global, economic recession and the

implementation of the objectives under the Single European Sky Second Package (SES II)

in the European Union member states. Although in 2010 FIR Warszawa noted a slight

increase, particularly during the summer months, in the air traffic compared to the past year’s

records, the overall traffic volume values were far below the levels recorded in 2008 before

the occurrence of the global, economic and financial crisis. Furthermore, the turmoil befalling

the world of aviation caused by the Iceland’s Eyjafjallajokull volcano eruption in April 2010

resulted in heavy financial losses suffered by PANSA since the airspace of FIR Warszawa

had to be shut down for several dozen hours. The past twelve months marked a period of

PANSA’s organizational improvements and the preparation of the Agency for the execution

of tasks required under the SES II legislative package (e.g. Performance Plan for the years

2012-2014), where special emphasis was put on the activities aimed at enhancing economic

efficiency factor of the ANSP.

All these external circumstances acted, however, as the trigger for significant organizational

modifications within the Agency. A number of activities were pursued with a view to abating

negative effects of the economic slowdown and improving cost-efficiency indicator. As

a result of a very slow progress in the works on the Corporate Collective Labour Agreement

for PANSA the new “PANSA’s Remuneration and Labour Regulations” came into force,

which, in turn, contributed to more flexible regulation of labour costs-related issues - the

biggest item on PANSA’s operating costs.

Despite the “crisis” hitting the entire aviation sector in 2010 PANSA continued persistently

with the realization of a long-time investment programme dedicated to increasing of the

operational efficiency and the Polish airspace capacity. In the year 2010 works on the

implementation of the Agency’s priority investment project i.e. the new air traffic management

system – PEGASUS_21 proceeded at a much faster pace. The progress in the scope of

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implementation of the technical elements of the system was accompanied by a parallel,

sophisticated and long-lasting process of training administered to PANSA’s operational

personnel.

In the process of preparations for the European Football Championships to be held in Poland

in 2012 the necessity of preparing the airspace for the intensified air traffic was of vital

significance to be considered yet in 2010. Therefore, a concept incorporating the solutions

regarding the airspace and the ATC services was developed in parallel to the implementation

of the new ATM system allowing the optimum exploitation of these sectors of FIR Warszawa,

which may be heavily overloaded at the time of this significant sporting event.

The year 2010 saw a very intensive implementation of a number of other Agency’s

undertakings of investment nature. This was possible due to the fact of, among others,

handing over by the State Treasury in favour of PANSA of the rights to disposition of real

property at a number of airports at which the Agency planned to deploy the CNS/ATM

equipment and facilities.

A considerable advancement of works on the establishment of the Baltic Functional Airspace

Block (Baltic FAB) is another highlight in the life of the Agency in 2010. By virtue of the

agreement concluded between the ministers competent for transport from Poland and

Lithuania, PANSA signed with Oro Navigacija a bilateral programme regarding the

coordination of activities engaged within the scope of Feasibility Study for the establishment

of Baltic FAB and the development of this project at the level of both air navigation services

providers.

Despite the challenging, external reality and internal tensions witnessed in 2010 PANSA

was, one more time, successful in overcoming serious threats and facing challenges

imposed by the evolving market of ATM/CNS services in Europe. Such success would not be

possible without active and pragmatic actions employed in the company, carried out with the

Agency’s personnel support, involvement and understanding of the solutions applied. I would

like to give the staff of ACC operational services particular credit for their involvement and

modern approach to work organization, which ultimately, led to a significant reduction of

delays generated in FIR Warszawa. All this gives me the reason to believe that PANSA is

well prepared for the subsequent challenges stemming from the European community

legislation and the expected changes in the CNS/ATM services market in Europe.

Wishing all our customers, airspace users and PANSA employees every success in the

realization of future assignments, I cordially invite you to read this Annual Report.

Krzysztof Banaszek

President of Polish Air Navigation Services Agency

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Key data for 2010

Table. 1 Key operational data

Source: PANSA (data on Total IFR flights controlled by the ANSP, total IFR flight-hours controlled by the ANSP, IFR airport movements controlled by the ANSP, total en-route ATFM delays based on PRU Operational data)

Table. 2 Financial results

Financial results in PLN thousand 2009 2010

Revenue from sales in total 531,5 600,0

Operating costs 563,4 574,2

Gross profit -32,8 28,8

Net profit -33,6 24,2

CAPEX planned in PLN thousand 123,3 112,6

CAPEX incurred in PLN thousand 96,2 80,8

Investment projects advancement status 78% 72%

Source: PANSA

Key operational data 31.12. 2009

31.12. 2010

Change Change (%)

Total IFR flights controlled by the ANSP („000) – GAT only

552 585 33 6%

Total IFR flight-hours controlled by the ANSP („000)

325 346 21 6,5%

IFR airport movements controlled by the ANSP („000)

282 288 5 2%

Total en-route ATFM delays („000 minutes) 900 659 -241 -27%

Total ATFM airport delays („000 minutes) 30 19 -11 -37%

En-route ATFM delays (in minutes per flight) 1,6 1,1 -0,5 -31%

Employment (full time jobs) 1719 1723 +4 0,23%

Employment – ATCO in OPS 408 436 +28 7%

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In 2010 a number of investment projects were launched, while the projects initiated in the past years and the deliveries of the systems proceeded as planned. A detailed description of PANSA‟s investments and projects is included in the section:”ATM/CNS Infrastructure” and “Investment Projects”

Figure. 1 Total IFR flights controlled by PANSA and en-route ATFM delays in the years 2007-2010

Source: PANSA

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Scope of activity

The year 2010 was the third, full 12- month period of Polish Air Navigation Services Agency‟s functioning.

PANSA is a certified entity designated by the Minister of Infrastructure by virtue of the Aviation Law Act and European Community law to ensure air navigation services in the airspace of FIR Warszawa.

PANSA is statutorily mandated to provide air traffic services and other air navigation services (ANS), including:

communication services,

navigation services,

surveillance services,

aeronautical information services.

Furthermore, PANSA:

provides airspace users with the meteorological information generated by entities holding relevant authorizations,

designs flight procedures,

performs flight-inspections of aeronautical communication, navigation and surveillance systems,

provides training and consultation in the ANS-related field,

carries out R&D activity in the ANS-related field,

deals with infrastructure acquisition, maintenance and modernization.

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Strategic goals

The key strategic guideline underlying the Agency‟s activity involves the development of an effective, economically efficient and competitive European business entity ensuring high-level air traffic safety in compliance with the requirements of the international and national law, whereas:

effectiveness is construed as a timely, based on the airspace users‟ expectations optimum organization and allocation of resources, customized to the current and forecasted air traffic volume.

economic efficiency is construed as the process of reaching optimum, measurable results in the field of air navigation services provision in view of financial resources engaged for their achievement.

competiveness is construed as achieving and maintaining an advantageous position in the ANSP‟s activity-related areas in Europe, resulting primarily from the unique resources or competences at PANSA‟s disposal.

PANSA‟s strategic guideline will be accomplished through the following strategic goals:

1) Maintaining high-level air traffic safety

2) Ensuring competent and highly qualified staff

3) Maintaining top quality services

4) Sustaining air traffic delays at a minimum level

5) Maintaining economic efficiency at an acceptable level

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Organizational structure

In 2010 PANSA continued its autonomous business activity by virtue of:

The Act of 8 December 2006 on Polish Air Navigation Services Agency,

Statutes of the Agency granted by the Ordinance of the Minister of Transport dated 28 March 2007,

PANSA‟s Organizational Rules and Regulations,

Work Regulations at PANSA,

and the application of provisions under the Corporate Collective Labour Agreement.

Figure. 2 PANSA: organizational chart effective as at 31.12.2010

POLISH AIR NAVIGATION SERVICES AGENCY

ORGANISATION CHART

A

PRESIDENT

POLISH AIR NAVIGATION SERVICES AGENCY

AJSSecretariat

AHA i r T r a f f i c C r i s i s M a n a g e m e n t a n d

S e c u r i t y S e r v i c e

AHZC r i s i s M a n a g e m e n t D e p a r t m e n t

AHOD e f e n c e A f f a i r s D e p a r t m e n t

AHBS a f e t y a n d S e c u r i t y

D e p a r t m e n t

AHPS p e c i a l i s t f o r

F i r e P r e v e n t i o n

AOVice Pres iden t

A i r Nav iga t ion

AMVice Pres iden t

F inance & Admin is t ra t ion

AWDi rec to r

Deve lopment and

Imp lementa t ion

Bureau

ALDi rec to r

ATM/CNS Personne l

T ra in ing and Deve lopment

Bureau

AHSS e c r e t a r i a t

AHKTS e c r e t I n f o r m a t i o n O f f i c e

AHUD e p u t y P l e n i p o t e n t i a r y f o r

C l a s s i f i e d I n f o r m a t i o n

P r o t e c t i o n / I C T N e t w o r k s

P r o t e c t i o n I n s p e c t o r

AA B o a r d o f M a n a g e m e n t

R e p r e s e n t a t i v e

AAZM a n a g e m e n t a n d O r g a n i z a t i o n

D e p a r t m e n t

AAAS e c r e t a r i a t

ABDi rec to r

A i r T ra f f i c Sa fe ty

Management and

Serv ices Qua l i t y

Bureau

AHKP l e n i p o t e n t i a r y f o r

C l a s s i f i e d I n f o r m a t i o n

P r o t e c t i o n

AJBO c c u p a t i o n a l S a f e t y a n d H e a l t h

D e p a r t m e n t

AJRPL e g a l S e r v i c e s U n i t

AJKI n t e r n a l C o n t r o l a n d A u d i t s

D e p a r t m e n t

AJKAI n t e r n a l A u d i t s U n i t

AALU L e g i s l a t i v e U n i t

AAPI n f o r m a t i o n a n d

C o m m u n i c a t i o n D e p a r t m e n t

AARPayroll Department

AAKHuman Resources Department

AAAWR e m u n e r a t i o n P l a n n i n g a n d

A n a l y s i s U n i t

AJZP u b l i c P r o c u r e m e n t D e p a r t m e n t

Source: PANSA

In 2010 Polish Air Navigation Services Agency was headed by the President of the Agency and two Vice-Presidents.

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Significant events in 2010

1 April 2010

PANSA celebrates its third birthday.

April 2010 FIR Warszawa is affected by air traffic disruptions caused by a series of Eyjafjallajokull volcano eruptions.

April 2010 PANSA signs a contract with FREQUENTIS for the installation of ATIS/VOLMET system.

June 2010 PANSA meets representatives of Ukrainian State Air Traffic Service Enterprise “UkSATSE” regarding the coordination of preparations to handle the increased air traffic during the European Football Championships UEFA EURO 2012 ™.

July 2010 PANSA becomes the SESAR Programme associate member.

8 July 2010 PANSA signs a contract for the construction of TWR (air traffic control tower) at Łódź airport.

19 July 2010 PANSA signs a contract with Helios Technology Limited for the performance of the Feasibility Study for the establishment of the Baltic Functional Airspace Block (“Baltic FAB”).

29 July 2010 A Letter of Intent regarding the Baltic FAB initiative is signed by the Vice-minister for Transport and Communications of the Republic of Lithuania (Rimvydas Vaštakas) and the Secretary of State in the Ministry of Infrastructure (Minister Tadeusz Jarmuziewicz).

30 July 2010 President of PANSA and the CEO of Oro Navigacija sign a bilateral Program concerning the coordination of activities in the scope of the project “Feasibility Study for the Establishment of the Baltic Functional Airspace Block (“Baltic FAB”)” and the development of the Baltic FAB Initiative at the level of air navigation services providers (ANSP).

3 August 2010 PANSA signs a contract for the construction of DVOR/DME radio beacon at the airports in Gdańsk, Katowice and Kraków.

August 2010 PANSA receives the right of perpetual usufruct to the real properties belonging to the State Treasury located at the airport in Kraków; one to be used for the new ATC Tower construction and the other for the deployment of the radio navigation equipment.

8-9 September 2010 The first meeting of the Baltic FAB Strategic Committee.

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September 2010 PANSA is granted the right of perpetual usufruct to the real property of the State Treasury located at Wrocław airport; the real property is designed for the construction of the DVOR/DME station.

September 2010 PANSA starts to implement the integrated system enabling planning, rostering and scheduling of the air traffic control services‟ work, delivered by Quintiq company.

13 November 2010 Meeting of PANSA‟s President and the CEO of Oro Navigacija to discuss status of preparations for the compliance with the requirements under the Single European Sky (SES) in the Baltic FAB establishment context.

16 November 2010 PANSA signs a contract with THALES company for the delivery and assembly of the collocated PSR/MSSR surveillance radars for Poznań and Wrocław locations.

November 2010 PANSA signs an agreement with Poznań- Ławica Airport regarding the lease of land designed for the construction of the ATC Tower and radio-communication center.

22 November 2010 PANSA is granted the right of perpetual usufruct to the real estate of the State Treasury located at the airport in Wrocław; the real property is designated for the construction of the primary and secondary radiolocation system.

8-9 December 2010 The second meeting of the Baltic FAB Strategic Committee.

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Safety, Airspace, Air Navigation Services

Safety

Pursuant to the International Civil Aviation Organization (ICAO), European Union (EU), European Organization for the Safety of Air Navigation (EUROCONTROL) requirements and the national regulations PANSA is entrusted with the task of incorporating the Safety Management System into the air traffic.

The above requirements were reflected in the declaration “Polish Air Navigation Services Agency Policy” adopted by the Agency including in one document the prime guidelines regarding the areas subject to performance evaluation: safety, cost effectiveness, operational efficiency and the environment.

In line with the above policy the provision of services of high safety level remains a predominant objective of PANSA as the institution ensuring: air navigation services, air traffic management in FIR Warszawa, communications, navigation and surveillance infrastructure and the delivery of flight information and meteorological information.

In order to guarantee the utmost safety standards recognized as PANSA‟s priority mission underpinning the provision of air traffic services the following activities were launched in 2010:

interim reports on the areas and trends of threats recognized on the basis of analyses conducted, identifying the areas of particular threat were published,

actions aimed at boosting safety awareness were launched e.g. a series of air traffic safety & safety awareness training was carried out,

safety reviews, which accompanied the implementation of changes to the Air Traffic Management System were carried out,

safety performance reviews were conducted,

safety was continuously monitored,

requirements and actions necessary to implement the electronic system for reporting events at ATM (Electronic Report of Duty Manager) were specified.

In 2010 PANSA succeeded in delivering on the assumed safety objectives. Sustaining of the preceding year safety level and, where possible, enhancing safety levels against a backdrop of increasing air traffic volumes and, consequently, preventing accidents in the air and reducing the volume of serious incidents with a direct or indirect ATM system involvement was PANSA‟s primary goal. In the year 2010 no aviation accident with a direct or indirect ATM involvement and no serious incident to be investigated by PANSA at the request of the State Commission on Aircraft Accidents Investigation was reported. Therefore, the indicator of volume of serious incidents calculated per 100 000 aircraft movements in 2010 was estimated at zero, cf. in 2009 it was estimated at 0,461. The recorded in 2010 volume of reported events in comparison with the year 2009 may confirm a highly efficient result of the training conducted by Air Traffic Safety Management and Services Quality Bureau in the scope of Safety Management System (“SMS”) for the ATM operational personnel, as well as the CNS technical personnel.

Airspace

The Agency continued in 2010 its core task of managing air traffic in the Polish airspace with no compromise to high safety levels.

The airspace management was ensured at three levels:

1) strategic airspace management – level1 (ASM 1),

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2) pre-tactical airspace management - level 2 (ASM 2),

3) tactical airspace management– level 3 (ASM 3).

The Flexible Use of Airspace concept, in use for some years, is based on the allocation of airspace through the management of airspace structures and, in particular, of conditional routes (CDR), temporary segregated areas (“TSA”), temporary reserved areas (“TRA”) and the reduced coordination airspace (“RCA”) management.

The key assignments accomplished in 2010 in the airspace management area consisted of:

further implementation of the “Programme of reorganization of air traffic control sectors in the years: 2008-2010”; works under the programme planned for subsequent years will be realized under the” Polish Airspace 2010+” Programme,

further implementation of tasks related to the reorganization of airspace within TMA Kraków, Gdańsk, Poznań, Warszawa, Wrocław, Szczecin, Łódź/Łask, Rzeszów areas and the continuation of the programme involving the reorganization of uncontrolled airspace and flexible structures (MIL/GA),

The tasks executed in the area of procedures design included, among others:

the repeated analysis of possibility to design non-precision instrument approaches based on the confirmation of DVOR/DME location for Modlin airport included in the permission issued by the Civil Aviation Office,

the modification of documentation and publications regarding all flight procedures for Warszawa/Okęcie Airport EPWA as a result of the change in the magnetic declination/variation at the airport,

the update of all flight procedures for Kraków/Balice Airport EPKK due to the occurrence of new obstacles within the airport region,

works on the elaboration of the STAR RNAV procedures design for TMA Kraków commenced,

consultations and flight procedures analyses in respect of the AIP Polska provisions regarding the proposals related to the noise abatement measures to be applied at Wrocław/Strachowice Airport EPWR,

works commenced on the NPA-GNSS procedure design for Olsztyn/Dajtki- EPOD. Consultations on the instrument flight procedures, RNAV navigation and aviation obstacles were conducted,

works began on the concept of a new or modification of the existing instrument flight procedures for the airports, where new radio navigation aids are planned due to the implementation of the Programme of preparations of PANSA to handle the increased air traffic at the time of UEFA EURO 2012 ™ (further referred to as” EURO 2012 Programme”); works will continue in the year 2011.

preparation and surveillance over the Route Availability Document (RAD),

performance of simulations and tests with the use of the SAAM program relating to, e.g.:

a modified scenario including changes to the airspace provided for under the “Polish airspace 2010+” Programme,

the load of ACC sectors on selected days of the year 2010,

preparation of draft changes in the airspace structures by a task group for the “Development of the Project of reorganization of FIR EPWW airspace as required for the purposes of the European Football Championships EURO 2012” (FTS simulation).

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Air Navigation Services

In the year 2010 the following initiatives were pursued in the scope of air traffic services‟ activity:

elements of the “Reorganization of ACC sectors in the years 2008-2010” programme were further implemented,

the assignments geared towards preparing the operational environment for the implementation of the new PEGASUS_21 air traffic management system, included the following tasks:

work technology and the operational implementation guidelines were developed for the new PEGASUS_21 air traffic management system in FIR Warszawa,

the process of operational personnel training in the scope of new air traffic management system was launched.

Actions, initiated in the previous years aimed at improving ATFCM in ACC EPWW continued, in particular,:

new position of Senior ATC ACC GAT was established, key for the dynamic management of personnel, ATC system‟s sectors and capacity, which had a direct impact on the optimization of the ACC‟s work and significant reduction of delays in FIR Warszawa,

new management methods in respect of the ACC EPWW capacity and sectorization were implemented, related to the newly established position of Senior ATC ACC GAT,

the ACC EPWW sector opening schemes were optimized,

new ACC EPWW human resources planning and management methods were put into place, to be followed by the exploitation of the Quintiq system in the future.

The above activities contributed to the improvement of the KPA Capacity indicator and a reduction of an average delay in the air traffic down to 1,1 min/flight, which is particularly praiseworthy if the increased air traffic in 2010 is taken into account. As a result of the activities initiated in 2009 and continued by PANSA in 2010 the level of average delay in the air traffic and the share of delays generated in FIR Warszawa against a background of the European results noticeably decreased on the previous years - to be seen below:

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Figure. 3 The level of average delay in FIR Warszawa air traffic in the years 2007-2010.

Source: PANSA

In 2010 the share of Poland (FIR Warszawa) in the delays generated in Europe decreased to the level of approx. 2% (average delay 1,1 min/flight), while the air traffic was constantly on the rise if compared to the air traffic volume from 2009. It needs to be emphasized that delays in 2010 were far below values recorded in 2008, even though the air traffic volume nearly reached the record high traffic volume observed before the economic crisis (i.e. air traffic volume in 2008), and the average delay amounted to 2,1 min per flight.

Other actions undertaken in 2010 in the scope of air traffic services activity included:

further implementation of Continous Decent Approaches – CDA for Warszawa Okęcie airport and the continuation of a phase test under the project involving the implementation of CDA for Kraków/Balice and Katowice/Pyrzowice airports; in the year 2010 the overall 28 127 operations with the use of the CDA techniques at Warsaw airport were performed,

continuation in collaboration with business partners operating at Warsaw F. Chopin Airport (including Polish Airports State Enterprise” PPL” and LOT Polish Airlines) of works on the project A-CDM („Collaborative Decision Making”),

initiation of the execution of the project involving the commissioning of radar approach control for the TMA Wrocław; under this project the following assignments were accomplished in 2010,

verification of the technical and operational use capabilities of the MSSR radar deployed at the airport, currently used for the purposes of the area control services, to ensure radar approach control services,

a test flight was made to determine the facilities detection capabilities of the radars in TMA Wrocław: MSSR Wrocław (currently in use at Wrocław airport), MSSR Poznań and MSSR Katowice.

the implementation of ESARR 5 principles in the scope of monitoring and supervision over the ATCOs competences, including:

assessors were appointed in all air traffic control bodies,

the evaluation of work techniques in all ATC bodies started.

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achieving by PANSA of readiness to comply with the statutory tasks executed by the Aviation Rescue Coordination Center (“ARCC”); taking into consideration the fact that the full implementation of the task is conditioned on the amendment to the Aviation Law and relevant Regulations of the Minister of Infrastructure coming into force,

maintenance of cyclic consultations with LOT Polish Airlines representatives within the framework of cooperation with air carriers,

the following tasks dedicated to the development and improvement of the ATC procedures were carried out:

a package of the ACC-APP WA interface (airspace, coordination procedures) – related solutions was developed and modified procedures for the ACC-APP WA interface were implemented,

flexible use of Warszawa Okęcie airport capacity at the time of refurbishment works on the runway was subject to analysis,

test on visual departure procedures at Warszawa Okęcie Airport was launched in collaboration with Eurolot airline based in Warsaw.

as part of the international cooperation in 2010 the DMEAN and FEP programmes were carried out and the programme aimed at enhancing airport capacity – ACE (Airport Capacity Enhancement) was further implemented.

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ATM/CNS infrastructure

PANSA‟s core activity in 2010 was focused on the maximum exploitation of the ATM AMS2000+ system functionality in the scope of the automatic exchange of aircraft data with the neighbouring FIRs and the formalization of cooperation rules with the technical services from the neighbouring states.

Furthermore, last year extensive works on the implementation of PEGASUS _21 project proceeded. The system will be a new, integrated air traffic management system configured to a great extent with ready solutions, adequately developed and adjusted to PANSA‟s requirements.

In the areas, where only possible, the functional requirements of the currently implemented ATM Pegasus_21 system will be compliant with the Functional Model of the CNS/ATM Architecture. The CNS/ATM architecture is defined to establish a common base level in the ECAC member countries, from where by way of gradual development it will be possible to work out a prospective European Air Traffic Management System. The Functional Model defines the architecture consisting of the Functional Blocks, with each block being further divided into separate components. The implementation of the entire or part of the Functional Block may be performed within the framework of initiatives undertaken by the European, regional or national ATS organizations.

The Pegasus_21 project is scheduled to be delivered in three key phases including:

Installation of a local ATM system for TWR/APP/FIS in TMA Kraków,

Installation of a local ATM system for TWR/APP/FIS in TMA Gdańsk,

Installation of the central ATM System at ATMC (Air Traffic Management Centre) Warszawa for the TWR/APP/ACC/FIS/OAT/AMC services and the final integration of the central ATM system with the local systems installed in TMA Kraków/Katowice, TMA Gdańsk, TMA Poznań and the regional TWR Bydgoszcz, Wrocław, Rzeszów, Szczecin and Łódź.

The two first phases under the project were completed in the first quarter of 2009 with the certification of the systems at the Civil Aviation Office. The local Pegasus_21 systems in Gdańsk and Kraków/Katowice have been in operational use since April 2009.

In the year 2010 the operational tests of the P_21 system in Warsaw were carried out, work technology and guidelines for the operational implementation of the new ATM system were elaborated. Training of operational personnel in the new system was launched. The completion of the third phase under the project was scheduled for the first months of 2012.

The year 2010 saw the continuation or commencement of a number of new PANSA‟s investment undertakings, comprising:

TWR Łódź – continuation of the assignment from the previous year; in July 2010 PANSA signed a contract with the contractor selected in the tendering procedure for the construction works,

DVOR/DME Zielona Góra – in February 2010 the contract was signed with the contractor selected in the tendering procedure; construction works in late 2010 reached a very advanced phase enabling thus to schedule the operational implementation of the device for the first half of 2011,

ATIS/VOLMET – in April 2010 the contract was signed with the contractor selected in the tendering procedure; the delivery of equipment to PANSA‟s premises was completed (September/October 2010),

DVOR/DME Gdańsk – the tender was announced and the contractor was selected to perform the task; in August 2010 the contract was signed with the contractor selected

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in the tendering procedure; works on the development of the construction design proceeded,

DVOR/DME Katowice – the tender was announced and the contractor was selected to perform the task; in August 2010 the contract was signed with the contractor selected in the tendering procedure; works on the development of the construction design proceeded,

DVOR/DME Modlin – the tender was announced and the contractor was selected to perform the task; in November 2010 the contract was signed with the contractor selected in the tendering procedure; works on the development of the construction design proceeded,

DVOR/DME Wrocław – the tender was announced and the contractor was selected to perform the task; in November 2010 the contract was signed with the contractor selected in the tendering procedure; works on the development of the construction design proceeded,

DVOR/DME Kraków – the technical programme and functional- utility programme was developed,

DVOR/DME Łódź – in December 2010 a tender was announced for the performance of the task,

DVOR/DME Bydgoszcz – the tender committee was appointed,

DME Wrocław – the functional–utility programme was developed, activities aimed at selecting the contractor through the market analysis, the contract was signed for the performance,

Wrocław Radiolocation System – a tender was announced for the design and delivery of the equipment; the contractor for the task execution was selected; in November 2010 the contract was signed with the contractor selected in the tendering procedure, works on the construction design elaboration commenced,

Poznań Radiolocation System – a tender was announced for the design and delivery of the equipment; the contractor for the task realization was selected; in November 2010 the contract was signed with the contractor selected in the tendering procedure, works on the construction design elaboration commenced;

In 2010 PANSA activities focused additionally on acquiring grants from the EU funds for the majority of crucial investment initiatives realized within the period of the years 2007-2015. In 2009 the tendering procedure under the provisions of the Public Procurement Law Act was conducted aimed at selecting a contractor to be awarded with the public contract for the development of the Feasibility Study for the:“Development of the state air traffic control centre infrastructure” project. On 19 February 2010 tenders were opened, as provided for in the announced tender, and, consequently, the contract with the selected contractor – Ernst & Young company was signed on 9 April 2010.

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Aeronautical Information Services (AIS)

PANSA – as a certified entity – was obliged to ensure aeronautical information services (AIS) and in 2010 consistently continued to perform its tasks involving the preparation, verification/ validation, collection, editing, formatting, publishing storing and dissemination of data and aeronautical information regarding the entire territory of the Republic of Poland and the airspace of the high seas under the jurisdiction of Poland. To this end PANSA:

gathered and published the information of major importance to safety, regularity and efficiency of air navigation services; issued and distributed the Integrated Aeronautical Information Package including Aeronautical Information Publication – Polska (AIP Polska, AIP VFR), Supplements to AIP, AIP VFR Aeronautical Information Circulars (AIC),

issued NOTAM messages regarding Polish airspace (FIR Warszawa). The NOTAM messages in FIR Warszawa were published by the International NOTAM Bureau in five series: A, B, P, R and (SNOWTAM) via the European AIS Database (EAD); the software application for the automatic generation of AIP and e-AIP was implemented and the databases supplemented,

published aeronautical charts, e.g. issued VFR chart (2009 edition) as well as a new chart : ASM Lower and Upper; moreover Enroute Chart Lower and Upper charts were published twice a year,

printed and distributed AIS publications,

provided aeronautical information,

managed the European Aeronautical Database (EAD) in Poland,

worked actively on new documents: ICAO Training Manual – AIS/AIM Personnel and AIS/AIM Quality Manual,

issued new MIL AIP Polska publication, including all military airfields,

issued Poland ICAO 1: 500 000 aeronautical map,

Issued ASM (Upper and Lower) map.

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Investment projects

The obligation to ensure high quality services, and most of all safe, continuous, seamless and efficient air navigation in the Polish airspace is reflected in the Agency‟s plans. Every year PANSA defines a wide range of key activities and investments to maintain and develop the activity of PANSA‟s services. The investments are meant to bring positive effects both in terms of safety and overall enhancement of the quality of services rendered. They are achieved as a result of the airspace capacity enhancement and, ultimately, air traffic delays reduction.

Under the investment plan for the year 2010 the amount of PLN 112 695 thousand was allocated for the execution of investment purposes. The total capital expenditures incurred (including granted and unsettled prepayments) in 2010 amounted to PLN 80 816 thousand, which accounts for 72% of the planned tasks value.

The five major (in terms of value) PANSA‟s investment projects carried out in 2010 are summarized in the table below.

Table. 3 The major PANSA’s investment projects in terms of value planned in 2010.

Investment project

Scope:

ATM/CNS/Facility infrastructure,

other

Start date of investment

project

Scheduled project

completion date

Planned capex for

2010 (million

PLN)

Planned total capex

(million PLN)

ATM Pegasus _21 System

ATM 2008 2012 31,5 101,0

VCS System CNS 2010 2010 10,0 10,0

Control and measuring equipment

CNS 2010 2010 9,6 11,0

TWR Łódź, TWR Kraków, TWR Poznań

Facility infrastructure

2009 2014 5,5 57,9

ATC Simulator ATM 2009 2010 5,1 7,9

TOTAL 61,7 187,8

Source: PANSA

The results from 2010 regarding the investment projects in comparison to the previous years are shown in the table below:

Table. 4 Execution of investment projects in the years 2007-2010 in PLN thousands.

IV-XII 2007 2008 2009 2010

Plan 86 450 168 981 123 337 112 695

Outflows for fixed assets 6 168 52 646 82 810 61 283

Other outflows, including prepayments

529 7 844 13 403 19 533

Capex incurred 6 697 60 491 96 213 80 816

Plan execution in % 7,75% 35,80% 78,01% 71,71%

Source: PANSA

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Environmental activities

The activities of Polish Air Navigation Services Agency focused on the abatement of negative impact of air transport on the environment entailed the compliance with the tasks included in the ESSIP (European Single Sky Implementation) and European ATM Master Plan, including, in particular:

reduction of CO2 and NOX emissions into the atmosphere caused by aircraft fuel burn and

reduction of aircraft generated noise.

PANSA‟s environmental measures in the ATM area focus primarily on the efficient airspace management with a view to improving horizontal flight efficiency and popularization and familiarization with the CDA technique at major FIR Warszawa controlled airports.

Other areas where activities were launched, include, among others, adequate preparation of investment projects in terms of their environmental impact, supervision of electromagnetic fields emission into the atmosphere and the improvement of the Environmental Management System. In order to boost ecological awareness at PANSA relevant training in the environmental aspects was provided to the candidates for air traffic controllers and the Integrated Management System internal auditors.

CO2 Emissions

PANSA carried out the analyses of air traffic in FIR Warszawa based on data derived from the AMS 2000+ system and CO2 emission indicators from the PAGODA (a dedicated website portal) to evaluate CO2 emission levels into the atmosphere. The analysis of implications of the DCT (Direct Flight) routing given by air traffic controllers for the change in the length of horizontal flight trajectory was carried out. Test-stand measurements were taken in terms of reduction by air traffic controllers of flights trajectory in TMA Warszawa. In the year 2010 PANSA executed tasks included in the ECIP, SESAR ATM Master Plan and „Flight efficiency plan” in the context of reducing air-traffic generated carbon dioxide emissions into the atmosphere.

The measurements taken in 2010 indicate that as a result of direct flights given by air traffic controllers in FIR Warszawa (“enroute DCT”), the route of a single en-route flight (based on the analysis for one day in 2010) was reduced by approximately 3.54 km/flight. It means that only during one day on which the measurement was taken, the DCT commands issued contributed to the reduction of CO2 emissions by 45.71 kg of CO2 per flight. During the entire day on which the tests were carried out the reduction of CO2 emissions amounted to 5,3 tons. Due to technical constraints of the AMS2000+ system, the above measurements were performed by manual analysis. The implementation of a new air traffic management system will enable to accommodate the functionalities allowing automatic registration and measurement of the differences between the actual route & distance of individual aircraft operation and the values as planned in the FLP. With regards to the Night DCTs, such commands were issued most frequently between the following entry points to the FIR Warszawa: LASIS – DIBED, GOTIX – DEVEL, BODLA – BOKSU, ENORU – RUDKA, SUI – BOKSU, VABER – BODLA, ELPOL – DIBED, DIBED – LASIS and USTIL – GOVEN. The analysis conducted by PANSA reveals that due to the Night DCTs given to approximately 170 aircraft operations occurring between the above mentioned points, fuel consumption was reduced by approximately 10 tons, while the CO2

emissions by circa 31.6 tons. The DCT commands were also issued by PANSA„s operational services in the terminal manoeuvring areas (TMA). In 2010 PANSA conducted measurements and tests regarding the environmental impact of the P-RNAV procedures implementation in the TMA Warszawa.

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The measurements involved the analysis of air traffic situation in terms of the distance between aircraft terminal arrivals in the controlled traffic at the Warsaw airport (EPWA). In the course of the measurements, taken in a real traffic situation, the actual route and distance of each terminal arrival route in relation to the planned in the flight plan (FLP) landing procedure (STAR procedure) was checked. The results showed that on average the distance of each analyzed terminal arrival in TMA Warszawa upon receiving of the DCT command issued by ATC was reduced compared to the distance of the procedure included in the FPL by approx. 34.4NM/terminal arrival route. The obtained distance reduction resulted in the overall reduction of CO2 emissions by 1 114.6 tones, which translates into approximately 507kg of CO2 less per a terminal arrival. The results of the measurements prove that PANSA services are efficient in the reduction of the negative impact of air navigation on the environment. PANSA„s intention is that in the years to come the DCTs (in the en-route, terminal and night air traffic) are used at every place where operationally and economically justified. Additionally, the development of the navigation infrastructure and, thus, the increase of the navigational aids planned by PANSA is bound to improve the air traffic management flow and enable further reduction of the flight trajectory, which will, in turn, result in the CO2 emissions reduction. In terms of vertical flight efficiency PANSA„s intention is a gradual, following the implementation of the Continuous Descend Approach technique at Warsaw Airport, deployment of such solution at other regional airports, i.e. Kraków, Katowice, Gdańsk, Poznań. PANSA intends to increase the volume of the CDA aircraft operations by approximately 7% per annum, which will translate directly into the significant reduction of the CO2 emissions. The volume of saved fuel due to the application of the CDA technique ranges, according to EUROCONTROL estimations, from 50 to 150 kg per flight depending on the aircraft type. The tool for increasing and promotion of aircraft operations performed using the CDA technique are PANSA„s activities in the scope of the reorganization of terminal airspace which will be directed at the provision of more economic flight profiles.

Cooperation with the managing airports in the scope of noise protection

Throughout 2010 cooperation with airport operators under the CEM (Collaborative Environmental Management) initiative continued towards reducing the nuisance of airport-generated noise. Representatives of LOT Polish Airlines participated in the works of a dedicated task group. Additionally, PANSA embarked on cooperation in the scope of handing over/transferring the test radar data to be applied in the airport noise monitoring systems at the airports.

Environmental Management System at PANSA

PANSA operates in compliance with the ISO 14001:2004 standard: Environmental Management System, which, according to the certificate granted, comprises: air traffic management (ATS, ASM, ATFM) provision of CNS (Communication, Navigation, Surveillance) services in the scope of research and development, implementation, infrastructure maintenance and operation, ATM incidents investigation, inspection-measurement flights, L 410 aircraft technical maintenance, ATM and CNS personnel training.

Electromagnetic Fields Emission Protection

PANSA monitors on an on-going basis the electromagnetic fields emission to the environment generated by utilized, modernized and commissioned radiolocation radio navigation and radio communication equipment. Therefore, the refresher measurements (in respect of electromagnetic fields emission levels into the environment were performed for

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the currently exploited facilities: NDB Bydgoszcz, NDB GDA, NDB S, Radar MSSR Szczecin, ILS/DME Szczecin, NDB/DME Wrocław, NDB OL Mosty, OR Krynice, OR Łódź, OR Sieradz, which proved that the electromagnetic fields emission levels in the environment did not exceed acceptable emission values.

Environmental protection in the investment projects

In 2010 PANSA provided its opinion and agreed the technical programs, projects and contracts as part of its responsibilities resulting from the environment protection law (132 opinions were issued). To deliver an environmental benefit technical guidelines in respect of the commissioned and exploited facilities were continuously prepared.

Furthermore, the Investment Project Information Charts were drafted including the evaluation of the planned PANSA‟s investments‟ environmental impact.

The so-called environmental screening was also carried out to assess the impact of the investment projects on the environment including the areas protected under the Natura 2000 initiative. In respect of seven projects a certificate issued by relevant authority responsible for monitoring of the areas under Natura 2000 in terms of the environmental impact of the undertaking on the environment was obtained.

Reports were drafted on the Wrocław Radar and Poznań Radar environmental impact. Ten projects were granted a decision on environmental conditions (i.e. a decision of

environmental conditions of granting a consent for the implementation of an undertaking). In none of the analyzed undertakings the essential negative environmental impact of the planned investment project on the Natura 2000 area was acknowledged.

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Human resources policy

PANSA‟s activities in the scope of human resources and training contributed to the achievement of specific strategic goals including, primarily, the assurance of fully competent personnel while maintaining air traffic safety and services quality at high-level. The process of recruitment and selection in Polish Air Navigation Services Agency responds to the demand of the organization for the employees to fill the posts in the area of management, support and administration and enables to attract highly qualified technical and operational personnel.

Human resources planning in the Agency is the necessary element in the complete set of available human resources management tools. The employment planning is required to define the optimum employment size and structure and adequate allocation of human resources to the respective organizational cells of the company. Furthermore, to ensure highly qualified ATS personnel customized to PANSA‟s operational needs relevant forecasts regarding the demand for ATC trainees and Air Traffic Controllers are prepared.

Throughout the year 2010 PANSA was taking the brunt of the previous year‟s economic crisis, which affected the entire air navigation services market. In effect, PANSA was forced to apply radical measures and reduce the external recruitment of the candidates for non-operational positions and sustain solely the recruitment of the candidates for air traffic controllers positions conducted in an open formula. The work efficiency improvement and the assurance of provision of PANSA‟s tasks was effected via the implementation of project management solutions enabling more flexible exploitation of resources and the internal staff recruitment.

The year 2010 saw the implementation of new tools used in the process of recruitment of candidates for the ATC positions. The collaboration with EUROCONTROL in the scope of selection of best candidates for the training for prospective ATCs was established. A set of tests named “The First European Air Traffic Controller Selection Test (FEAST)”- a research tool recommended by EUROCONTROL applied in the recruitment and selection of the ATC trainees in 24 European ANSPs was put in place.

The employment as of 31 December 2010 in PANSA stood at 1.723,66 full-time employees and increased by 0,27% compared to the figures of 31 December 2009.

Table. 5 Employment at PANSA as of 31.12.2010 – allocation of employees according to Performance Review Unit specification – EUROCONTROL

PRU Category Employment as

at 31.12.2009 (full time jobs).

Employment as at 31.12.2010

(full time jobs.

Change

2010 – 2009

Air Traffic Controllers 408,25 436,58 28,33

Air traffic controllers on other duties 12,80 12,00 -0,80

Ab-initio trainees 30,00 40,00 10,00

On-the-job trainees 72,00 46,00 -26,00

ATC assistants 80,20 85,70 5,50

OPS-support 259,60 262,40 2,80

Technical support for operational CNS/ATM monitoring and control systems staff

352,50 341,50 -11,00

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PRU Category Employment as

at 31.12.2009 (full time jobs).

Employment as at 31.12.2010

(full time jobs.

Change

2010 – 2009

Technical support staff for the development and implementation of CNS/ATM systems

61,20 63,20 2,00

Administration staff 327,73 327,03 -0,70

Staff for ancillary services 114,75 109,25 -5,50

Total 1.719,03 1.723,66 4,63

Source: PANSA

Within the period from 01.01.2010 to 31.12. 2010 Polish Air Navigation Services Agency executed the following recruitment activities:

external recruitment – 54,50 full-time employment contracts were awarded, of which 39 were awarded to ab-initio trainees.

in respect of the staff already employed the amount of working time increased by 2,55 full-time employment contracts.

Within the referred period the employment decreased by 52,42 jobs.

In the area of human resources management and personnel development the Agency is committed to the provision of the refresher training for the ATM personnel, aimed at maintaining their knowledge, theoretical and practical skills at the level ensuring the required level of safety in the air traffic.

In 2010 PANSA‟ s staff participated in the following training:

refresher training for the ATM personnel “Emergency situations” – a total of 205 air traffic controllers attended the training in 2010,

language training for air traffic controllers preparing for the ELPAC test (ICAO Level 4 – as per Directive 2006.23/EC) – a total of 54 persons attended the training in 2010,

training for the candidates for OJT instructors – attended by 18 air traffic controllers (training held in Poland provided by representatives of DFS) and training at IANS (Luxemburg) attended by 2 persons,

basic training for ab-initio trainees, in which 20 persons were trained and 19 persons completed the radar course.

training for ab-initio trainees in Europe:

13 ab-initio trainees in the scope of ADI/APP – Prague/Czech Republic,

6 ab-initio trainees in the scope of APS – Prague/Czech Republic,

A series of training initiatives geared towards improving the competences of both PANSA‟s operational and other personnel were undertaken in 2010. For instance, a total of 27 persons participated in the courses of the Institute of Air Navigation Services (IANS) and additionally 61 persons attended the training organized in Poland according to IANS programmes, including:

12 air traffic controllers participated in the training: HUM-OJTIREF, Refresher Training for On the Job Instructor,

46 air traffic controllers participated in the training: 12 air traffic controllers participated in the training: HUM-CCA, Controller Competence Assessment,

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14 PANSA employees participated in NAV-GNSS, Global Navigation Satellite System,

14 PANSA employees participated in DPS-DPC, Understanding the Data Processing Chain in ATM training.

PANSA enhanced a positive image of the company on the market and advertised work opportunities in the Agency with special offer presented to prospective personnel of the air traffic control services. In 2010 the Agency was engaged in a number of initiatives presenting itself as an interesting and reliable employer and attempted to reach the maximum number of potential candidates for the job.

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Consultations with Air Navigation Services Users

PANSA, as every certified air navigation services provider operating in pursuance of the Commission Regulation (EC) No 1794/2006 of 6 December 2006 laying down a common charging scheme for air navigation services and the Directive by the Minister of Transport of 15 May 2007 on the navigation services charges is obliged to ensure openness and transparency in the process of consultation and calculation of charges for air navigation services.

The consultation meetings with the airspace users‟ representatives are held twice a year. They are attended by the representatives of air carriers, FIR Warszawa airspace users organizations (e.g. IATA, AEA), the Civil Aviation Office, the Institute of Meteorology and Water Management and Polish Air Navigation Services Agency.

As a result of consultations held in 2009 and in compliance with air carriers expectations, upon the analysis of proposals of rates submitted by PANSA, the President of the Civil Aviation Office approved the effective from 1 January 2010 terminal charge unit rate in the amount of PLN 867,88 at all airports in Poland. However, starting from 1 January 2011 at all airports in Poland where the air traffic services are provided, the terminal charge unit rate collected for the provision of air navigation services in respect of aircraft take-off and landing operation totalls PLN 1051,03.

The change in en-route charges is approved and comes into force by the decision of the European Organization for the Safety of Air Navigation (EUROCONTROL) and starting from 1 January 2010 amounts to PLN 165,88 (39,93 EURO) plus 0,13 EURO, the so-called administrative charge. The charge approved for the year 2011 amounts respectively to PLN 155,17 (39,31 EURO)+ 0,15 EURO.

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International cooperation

The main area of a widely perceived PANSA‟s international cooperation in 2010 involved issues related to the advancement of works on the realization of initiative concerning the establishment of the Baltic Functional Airspace Block (“Baltic FAB”) in cooperation with Oro Navigacija - Lithuanian air navigation services provider. In the early months of 2010, to comply with the requirements under the European Commission Decision (EC) 7718 of 8 October 2009 on granting financial aid from the TEN-T budget for the Feasibility Study, the main PANSA activities revolved around preparations for the development of the FAB Feasibility Study and focused primarily on the works of the Tender Committee set up to prepare for the selection of a prospective contractor.

In June 2010 the Tender Committee for the Baltic FAB Feasibility Study selected the most advantageous bid submitted under the tendering procedure, which, in effect, gave PANSA the green light to sign in July 2010 the contract with the selected contractor (i.e. Helios company) for the performance of the Feasibility Study. In November 2010 Helios submitted a report developed jointly with Ernst &Young company regarding the advancement of works on the Baltic FAB Feasibility Study. The document delineated the then status of works and included the evaluation of the potential to develop Baltic FAB initiative including the cost-benefit analysis, activities analysis, legal and institutional aspects and the environmental impact assessment.

In the year 2010 the Baltic FAB Strategic Committee was set up, headed by the Vice-minister for Transport and Communications of the Republic of Lithuania (Rimvydas Vaštakas) and the Secretary of State in the Ministry of Infrastructure (Minister Tadeusz Jarmuziewicz). Two meetings of the Committee were held in 2010.

In July 2010 President of PANSA and CEO of Oro Navigacija signed a Letter of Agreement (Programme) on the coordination of activities in the scope of the “Feasibility Study for the Establishment of the Baltic Functional Airspace Block (“Baltic FAB”) project and the development of the Baltic FAB Initiative at the level of air navigation services providers.

In the year 2010 PANSA actively engaged in the meetings of the Inter-Ministerial Committee for FAB and the works of respective working expert groups dedicated to individual aspects (e.g. working group for strategic and economic issues, working group for operational-technical issues, working group for legal and legislation issues, etc.)

The involvement of PANSA for the benefit of Baltic FAB initiative was accompanied by a concurrent intensive PANSA‟s activity in the works of key ANSP institutions (e.g. EUROCONTROL, CANSO working groups) involving the participation in the formulation of opinions, reports and drafts of legal acts presented further on the international agenda.

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Operational performance in 2010

PANSA‟s operational services continued in 2010 with the provision of air traffic control in FIR Warszawa and maintained high safety levels in the Polish airspace. Below the volume of air traffic based on data derived from the resources of the PRU (PRU operational data) is presented. The data are consequently used as the basis for calculation of PANSA‟s performance indicators by the PRU. The data were presented to maintain cohesion with the operational data published in other European reports, e.g. Performance Review Report 2010. Further parts of this section contain data related to overall air traffic volume, which was recorded in FIR Warszawa in 2010 and take into account part of the airspace, which was delegated and controlled by other ANSPs. In respect of terminal traffic volumes noted in 2010 the data calculated in accordance with European laws establishing a common charging scheme for air navigation services (Commission Regulation (EU) No 1191/2010 amending Regulation (EC) No 1794/2006) were taken into account. The detailed figures were presented in PANSA‟s Report on Business Activity for 2010. During the twelve months in 2010 in the Polish airspace, in which PANSA provided air navigation services, the following operations were performed:

En-route output: 585 thousand IFR flights controlled by PANSA (GAT only) and

Terminal output: 288 thousand IFR airport movements controlled by PANSA1.

Figure. 4 En-route traffic (GAT only) – total IFR flights controlled by PANSA by months in 2010 r.

Source: PANSA, based on PRU Operational Data, May 2011.

1 Data derived from PRU Operational Data, May 2011.

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Figure. 5 Terminal traffic – IFR airport movements controlled by PANSA by months in 2010

Source: PANSA, based on PRU Operational Data, May 2011

The performance of en-route IFR flights controlled by PANSA in 2010 in the volume of total flight movements was higher by more than 6% on the previous year, whereas in respect of the IFR airport movements controlled by PANSA it increased over 2% in the total volume of flight movements.

However, taking into account the overall air traffic in FIR Warsaw, including parts of the airspace delegated to LFV (Mid Sea and Rohne South airspace), the following result was achieved:

Figure. 6 En-route traffic by months in 2010 including parts of the airspace delegated to LFV (Mid Sea and Rohne South airspace)

Source: PANSA

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Below you can find terminal traffic volumes from 2010, which were recorded according to the so-called European “charging” regulations i.e. Regulation 1794/2006 and Regulation 1191/2010 amending Regulation 1794/2006 (Article 11(1) of the European Commission Regulation 1191/2010) whereby for charging purposes approach and departure shall count as a single flight.

Figure. 7 Terminal traffic by months in 2010 (calculation based on Regulation (EU) 1191/2010)

Source: PANSA

If the overall air traffic structure is taken into account the overflights (OF) prevail and are continuously on the rise while the Arrival and Departure traffic and domestic traffic (D) figures are taking up marginal positions. In the year 2010 the percentage share of OF in the overall traffic figures in FIR Warszawa exceeded 55%. The structure of air traffic in FIR Warszawa is shown below:

Figure. 8 Flight operations structure in FIR Warszawa in the years: 2005-2010

Source: PANSA

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Pursuant to Article 130 of the Aviation Law Act the Agency in 2010 ensured free of charge air navigation services to flights, which were performed:

in compliance with rules for flights performed under Visual Flight Rules (VFR) – 5 674 MVS;

flights performed partly under Visual Flight Rules (VFR) and partly under Instrument Flight Rules (IFR) for this part of the flight, which is performed under Visual Flight Rules (VFR) – 2 512 MVS;

flights performed by aircraft of which the maximum take-off weight is less than two (2) metric tonnes;– 4 517 MVS;

flights performed exclusively for the transport, on official mission, of the reigning Monarch and his/her immediate family, Heads of State, Heads of Government, and Government Ministers.– 174 MVS;

flights performed by Polish military flights and the military flights of the states in which the flights of Polish military aircraft are not subject to navigation charges - 6 608 MVS.

Among the flights exempt from air navigation charges in 2010 the majority, like in the year before, consisted of the military flights (34% exempted flights), the VFR flights (29% exempted flights) and the flights with MTOW up to 2 tons ( 23% exempted flights). In 2010 the Agency did not record any search and rescue flights (“SAR”).

According to calculation based on the “charging” regulations, in the year 2010 the highest volume of terminal flight movements was recorded at Warsaw F. Chopin Airport totalling 69 257 MVS, to be followed by the following airports:

Kraków John Paul II Airport: 17 328 MVS,

Gdańsk Lech Wałęsa Airport: 14 604 MVS,

Katowice – Pyrzowice Airport: 12 924 MVS,

Wrocław – Strachowice M. Kopernik Airport: 11 194 MVS,

Poznań – Ławica H. Wieniawski Airport: 10 326 MVS,

Rzeszów – Jasionka Airport: 3 871 MVS,

Szczecin – Goleniów NSZZ Solidarność Airport: 2 855 MVS,

Łódź W. Reymont Airport: 2 612 MVS,

Bydgoszcz – Szwederowo J. Paderewski Airport: 2 003 MVS,

Zielona Góra – Babimost Airport: 521 MVS.

The percentage share of individual airports by volume of terminal navigation operations and

terminal navigation service units (SU-L) in 2010 is shown below:

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Figure. 9 The percentage share of individual airports by volume of terminal navigation operations in 2010

Source: PANSA

Figure. 10 The percentage share of individual airports by volume of terminal navigation service units (SU-L) in 2010

Source: PANSA

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Financial results in 2010

Polish Air Navigation Services Agency in the third, full year of its business activity generated a financial profit of PLN 24 260 thousand. The achieved profit is attributable to the increase in revenues from the sale of aviation services occurring, in turn, as the result of more intensified air traffic in the year 2010 and the reduction of the operating costs.

Figure. 11 PANSA‟s revenues and costs in 2010 (in PLN)

Source: PANSA

Revenue from the sale of services

The major source of the total revenue generated by PANSA was the revenue from the sale of services of:

en-route navigation,

terminal navigation.

The revenue from the sale of services amounted to PLN 600 091 thousand in 2010.

The value of revenue from the sale of navigation services in 2010 compared to the previous year was impacted by the change in the rates of navigation services charge - the en-route navigation service unit rate increased, while the terminal navigation service unit rate was determined by the President of the Civil Aviation Office in the amount of PLN 867,88 at all airports in Poland. Starting from the year 2010 a single terminal navigation rate was established for all airports. The notable revenue increase was attributable to the fact that starting from May 2010 a gradual increase in the volume of air navigation services provided was recorded. However both gains and any possible losses would be balanced in accordance with the adjustment mechanism principles.

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Table. 6 Air navigation services unit rates in the years 2009-2010 (in PLN)

Specification 2009 2010 change

2010/2009

EN-ROUTE NAVIGATION

Unit rate (exclusive of

Eurocontrol administration charge)

140,69 165,88 25,19

TERMINAL NAVIGATION

Warszawa Airport 610,23

867,88

257,65

Kraków Airport

888,71 -20,83

Gdańsk Airport

Bydgoszcz Airport

Katowice Airport

Łódź Airport

Poznań Airport

Rzeszów Airport

Szczecin Airport

Wrocław Airport

Zielona Góra Airport

Source: PANSA

The Agency closed the year 2010 with the net profit of PLN 24 260 thousand. Such level of profit could be achieved due to revenue from sales totaling PLN 600 091 thousand and the level of operating costs incurred in the total amount of PLN 574 261 thousand.

The profit was also impacted by the continuation of PANSA‟s performance enhancement and cost reduction policy as well as a very noticeable increase, compared to 2009, in air traffic intensity starting from the second Q 2010. However, it must be remembered that both generated gains as well as any possible losses are subject to the effective adjustment mechanism.

The air navigation services are the major item in PANSA‟s revenues. The revenue from the sale of PANSA‟s air navigation services in 2010 increased by PLN 67 409 thousand, i.e. by 12,9% compared to the analogous period of 2009, reaching the value of PLN 590 446 thousand.

In the analysed 2010 year the revenues generated from en-route navigation services (over-flights, arrivals to domestic airports) accounted for 81,3% of the total revenue from the sale (the adjustment mechanism was not taken into consideration).

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Figure. 12 PANSA Services Sale Structure in 2010

Source: PANSA

Costs

The total value of costs incurred by PANSA within the period of 12 months of 2010 amounted to PLN 580 648 thousand. The main cost items include:

operating costs: PLN 574 261 thousand ;

other operating costs: PLN 1 181 thousand;

financial costs: PLN 5 207 thousand

The operating costs were undoubtedly the biggest item on the list, i.e. 98,9% of the total PANSA‟s costs. The employment costs (personnel) of PLN 383 882 thousand were the major item on the operating costs list and accounted for 67% of the operating costs in 2010 with the remuneration costs of PLN 324 494 thousand taking the lead.

Figure. 13 PANSA’s operating costs structure in 2010

Source: PANSA

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PANSA’s performance versus other European ANSPs’results

PANSA is actively involved in the benchmarking process measuring its performance results against other air navigation services providers‟ records, both at the European and global level.

The benchmarking process is based on the active participation of the Agency‟s representatives in the following working groups: ACE Benchmarking Working Group under the aegis of EUROCONTROL and Global Benchmarking Working Group as part of CANSO activities.

The meetings attended by PANSA‟s representatives give them the opportunity to consult, make arrangements and interpret human resources, financial and operational data submitted by PANSA. Based on the validated information the key ANSPs‟ performance indicators are elaborated and presented, which ultimately act as the benchmarking tool to measure the institution‟s performance in the respective areas.

A certain drawback to the above benchmarking process is the fact that the publication of reports on the ANSPs‟ performance is delayed by at least 18 months. For instance, the EURORONTROL/PRU report entitled “ATM Cost-Effectiveness (ACE) – 2009 Benchmarking Report” was published as late as the end of June 2011. For this reason PANSA refers to data from the year 2009 in the benchmarking analysis against other European ANSPs.

One of the key indicators describing the ANSPs‟ performance is the so-called general cost-efficiency indicator according to EUROCONTROL/PRU methodology (costs of ATM/CNS services provision per composite flight hours). In 2009 the indicator for PANSA amounted to circa EUR 295, whereas the European average amounted to EUR 435. The chart below compares the ANSPs in Europe in terms of cost effectiveness factor:

Figure. 14 Financial cost effectiveness in Europe in 2009

Source: ACE Benchmarking Report 2009, Eurocontrol/PRU, June 2011.

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In terms of the economic cost-effectiveness, which takes into account both financial cost effectiveness increased by the cost of generated delays, in 2009 the indicator for PANSA amounted to EUR 439, whereas the European system average for ANSPs amounted to EUR 494.

Figure. 15 Economic cost effectiveness in Europe in 2009

Source: ACE Benchmarking Report 2009, Eurocontrol/PRU, June 2011.

The analysis of PANSA‟s performance results clearly indicate that the indicators achieved in 2009 by the Agency against other ANSPs improved, which is revealed in the report “ATM Cost-effectiveness (ACE) 2009 Benchmarking Report“. The productivity of ATCO for ACC WARSZAWA proved highest against other ACCs controlling over seven sectors. Figure 14 illustrates the difference in productivity of ATCOs at individual European ACCs.

Figure. 16 ATCO-hour productivity at ACC level (ACCs with seven or more ACC sectors)

Source: ACE Benchmarking Report 2009, Eurocontrol/PRU, June 2011.

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At the moment, a detailed analysis of PANSA‟s performance in 2010 compared to other European ANSPs cannot be carried out due to the lack of adequate data (as indicated above, publication of reports on the ANSPs‟ performance in Europe (PRR, ACE) is delayed by several months). However, taking into account that the biggest items on PANSA‟s operational costs in 2010 were nearly maintained at the level observed in the years 2008 and 2009, measures taken by PANSA in 2010 with a view to abating negative effects of the economic slowdown and improving cost-efficiency, and bearing in mind that air traffic last year nearly reached traffic volume observed in 2008, which was record high in terms of air traffic volume before the crisis, it needs to be emphasized that PANSA remained in 2010 one of the most cost-effective ANSPs across Europe. At the same time PANSA in 2010 succeeded in reducing delays in air traffic by nearly half compared to 2008, which positively impacted the operational and economic cost effectiveness.

Figure. 17 Air traffic volume and delays in FIR Warsaw in the years 2005-2010

Source: PANSA

Compared to 2009 the share of Poland (FIR Warszawa) in the delays generated in Europe in 2010 decreased three times and reached the level of approx. 2% (average delay 1,1 min/flight) while the air traffic was constantly on the rise. It needs to be emphasized that delays in 2010 were far below values recorded in 2008, while the air traffic in 2010 nearly reached record high traffic volume observed before the economic crisis.

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Figure. 18 ATFM Delay share per ANSP in 2009

Source: EUROCONTROL, CFMU, Digest – Annual 2009, 2010.

Figure. 19 ATFM Delay share per ANSP in 2010

Source: EUROCONTROL, CFMU, Digest – Annual 2009, 2010.

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The graph below shows Poland‟s cost-efficiency KPI profile based on the data provided at the November 2010 session of the EUROCONTROL Enlarged Committee for Routes Charges and calculated by the PRU according to KPI definition from the SES Regulations.

Figure. 20 Poland’s profile for the cost-efficiency KPI for RP1 based on the November 2010 forecast data

Source: LSSIP 2011-2015 Poland

As a result of the application of the recovery mechanism in the charging rate in 2010 PANSA paid (refunded) the balance from the previous years meant to be included in the settlements for 2010 amounting to 2,96 million PLN. The positive balance in the amount of 82,821 million PLN generated in 2010, as per the regulation laying down a common charging scheme for air navigation services is subject to settlement with air carriers by way of inclusion thereof in the air navigation rate starting from 2012 during four consecutive years. The unit rate in 2012 will be calculated taking into account not only part of the 2010 balance but additionally the unsettled balance from the previous years subject to financial settlement in 2012.

The information regarding costs determined/established/set and the established en-route rate is presented below.

Table. 7 Determined costs in real terms and real en-route determined unit rate

Currency 2009 A 2010 A 2011 F 2012 D 2013 D

2014 D

Determined costs in real terms (in national currency at 2009 prices)

'000 PLN 459 837 458 773 525 522 565 328 581 137 568 862

Total en-route SUs

3 092 3 313 3 587 3 899 4 021 4 161

Real en-route determined unit rate in national currency (at 2009 prices)

PLN 148,71 138,48 146,50 145,00 144,53 136,71

Source: Polish Performance Plan 2012-2014

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Independent Auditor’s opinion

To the Minister of Infrastructure

We have audited the accompanying financial statements of Polish Air Navigation Services

Agency, seated in Warsaw, Wieżowa 8 street, (“PANSA” or “the Agency”), which comprise

the statement of financial position as at 31 December 2010, the statement of comprehensive

income, the statement of changes in equity and the statement of cash flows for the year then

ended and notes to the financial statements, comprising of a summary of significant

accounting policies and other explanatory information.

President‟s of the Agency Responsibility for the Financial Statements

President of the Agency is responsible for the correctness of the accounting records and the

preparation and fair presentation of these financial statements in accordance with

International Financial Reporting Standards, as adopted by European Union and with other

applicable regulations and preparation of the Report on the Agency‟s activities. President of

the Agency is also responsible for such internal control as management determines is

necessary to enable the preparation of the financial statements that are free from material

misstatement, whether due to fraud or error.

According to the Accounting Act dated 29 September 1994 (Official Journal from 2009, No.

152, item 1223 with amendments) (“the Accounting Act”), Management of the Company and

members of the other body supervising the entity are required to ensure that the financial

statements and the Report on the Company‟s activities are in compliance with the

requirements set forth in the Accounting Act.

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Auditor‟s Responsibility

Our responsibility, based on our audit, is to express an opinion on these financial statements

and whether the financial statements are derived from properly maintained accounting

records. We conducted our audit in accordance with section 7 of the Accounting Act, national

standards on auditing issued by Polish National Council of Certified Auditors and

International Standards on Auditing. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance about whether

the financial statements and the accounting records from which they are derived are free of

material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on our judgment,

including the assessment of the risks of material misstatement of the financial statements,

whether due to fraud or error. In making those risk assessments, we consider internal control

relevant to the entity‟s preparation and fair presentation of the financial statements in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity‟s internal control. An audit also

includes evaluating the appropriateness of accounting policies used and the reasonableness

of accounting estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion.

Opinion

In our opinion, the accompanying financial statements of Polish Air Navigation Services

Agency have been prepared and present fairly, in all material respects, the financial position

of the Agency as at 31 December 2010 and its financial performance and its cash flows for

the year then ended, in accordance with International Financial Reporting Standards as

adopted by the European Union, are in compliance with the respective regulations and the

provisions of the Agency‟s articles of association that apply to the Agency‟s financial

statements and have been prepared from accounting records, that, in all material respects,

have been properly maintained.

Emphasis of Matter

Without qualifying our opinion, we draw attention to the following matter. As described in

a note 21.1 of the notes to the financial statements, in calculation of a provision for excessive

Agency‟s cost coverage in the financial year 2010, there was a specific methodology applied

resulting from the European Commission Regulation (EC) No. 1794/2006. For the purposes

of the calculation of the provision, the Agency has made numerous assumptions, which does

not directly result from legal regulations which may be verified. As a result, the actual amount

which shall be settled with carriers by lower unit rates for navigation charges in the future,

may differ from the value estimated by the Agency as at 31 December 2010.

Other Matters

We have reviewed the report on the Agency‟s activities for the period from 1 January 2010 to

31 December 2010 (“the Report”) and concluded that the information derived from the

accompanying financial statements is consistent with it. The information contained in

the report corresponds with the provisions of Article 49 of the Polish Accounting Act.

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Financial statements and accounts

BALANCE SHEET as of 31 December 2010 (PLN)

ASSETS 31.12. 2009 31.12.2010

A. Fixed assests 588 506 106,48 635 297 687,90

Intangible fixed assets 14 794 846,32 26 992 844,40

Tangible fixed assets 537 773 744,87 559 241 644,56

Deferred tax assets 23 573 013,11 37 471 621,71

Long-term receivables 982 714,97 998 916,13

Advances for tangible fixed assets under construction 8 769 475,67

7 703 598,81

Other prepayments 2 612 311,54 2 889 062,29

B. Current Assets 150 147 991,15 205 256 066,71

Inventory 788 831,21 824 852,07

Trade receivables and other receivables 91 076 444,16 118 161 283,92

Receivables from income tax on legal entities 867 136,59 4 615 170,00

Short-term prepayments 2 378 672,07 2 517 903,25

Cash and other pecuniary assets 55 036 907,12 79 136 857,47

Total assets 738 654 097,63 840 553 754,61

EQUITY AND LIABILITIES 31.12.2009 31.12.2010

A. Equity 553 842 940,34 578 103 254,619

Statutory Fund 475 021 841,32 475 021 841,32

Reserve Fund 129 152 438,96 78 821 099,02

Profits / Results retained -16 664 255,69 -

B. Long-term liabilities 87 049 447,35 88 056 091,72

Long-term provisions 79 848 492,00 79 814 791,56

Deferred income tax provision 6 058 538,03 7 412 235,96

Other long-term liabilities 1 142 417,32 829 064,20

C. Short-term liabilities 97 761 709,94 174 394 408,28

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Short-term provisions 10 382 208,25 9 624 973,08

Trade liabilities and other 63 287 350,49 66 362 725,67

Accruals 24 092 151,20 98 406 709,53

TOTAL LIABILITIES 738 654 097,63 840 553 754,61

PROFIT AND LOSS ACCOUNT as of 31 December 2010 (PLN)

2009 2010

Revenues from sales 531 479 346,58 600 091 379,96

Operating expenses/costs 563 456 938,77 574 260 672,11

Profit (loss) on sales -31 977 592,19 25 830 707,85

Other operating revenues 1 046 138,29 5 238 897,49

Other operating expenses/costs 6 819 768,64 1 180 565,30

Profit (loss) on operating activities -37 751 222,54 29 889 040,04

Financial revenues 5 454 890,98 4 104 869,35

Financial expenses 545 792,57 5 206 541,79

Gross Profit (loss) -32 842 124,13 28 787 367,60

Income tax -824 960,12 17 071 964,00

Net profit (loss) -33 667 084,25 24 260 314,27

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CASH FLOW STATEMENT (PLN)

2009 2010

Cash flow from operating activities

Gross profit (loss) -32 842 124,13 28 787 367,60

Total adjustments 89 889 657,95 48 916 573,16

Amortization and depreciation 44 594 149,34 45 082 624,91

Exchange losses -553 639,06 1 626 408,16

Interest and profit sparing (dividends) -2 905 620,04 -3 055 392,08

Profit on investment activities 838 388,50 177 893,68

Change in receivables 33 755 051,80 -30 832 873,17

Change in inventory -421 382,79 -36 020,86

Change in provisions 6 218 951,22 562 762,32

Change in liabilities 10 763 285,53 3 075 375,18

Change In prepayments and accruals 3 820 469,31 61 072 078,33

Tax paid -549 550,78 -21 687 134,00

Other adjustments -5 670 445,08 -7 069 149,31

Net cash flows from operating activities 57 047 533,82 77 703 940,76

Inflows from disposal of intangible and tangible fixed assets

99 746,86 42 429,42

Outflows for the purchase of intangible assets and tangible fixed assets

95 885 419,30 61 933 099,26

Net cash from investment activities -95 785 672,44 -61 890 669,84

Cash flows from financial activities

Interest recieved 3 451 412,61 4 104 868,39

Interest paid 545 792,57 1 049 476,31

Other financial inflows (subsidies) 6 283 198,97 7 069 149,31

Payment of liabilities arising from financial leases 299 882,25 211 453,80

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Net cash from financial activities 8 888 936,76 9 913 087,59

Increase / decrease of net Cash and its equivalents -29 849 201,86 25 726 358,51

Change In Cash due to Exchange differences 171 798,35 -1 626 408,16

Balance sweet change In cash -29 677 403,51 24 099 950,35

Cash and its equivalent opening balance 84 714 310,63 55 036 907,12

Cash and its equivalent closing balance, including 55 036 907,12 79 136 857,47

Of limited disposability 952 135,19 1 316 376,37

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ADDRESS : Polish Air Navigation Services Agency ul. Wieżowa 8 02-147 Warsaw POLAND Information and Communication Management Unit e-mail: info@pansa.pl

Spokesperson Phone no: (+ 48 22) 574 67 74 (+ 48) 609 501 241 Fax no: (+ 48 22) 574 67 79 E-mail address: rzecznik@pansa.pl

PHONE/FAX NUMBERS:

Krzysztof Banaszek The President of Polish Air Navigation Services Agency Phone no: (+ 48 22) 574 50 00 Phone no: (+ 48 22) 574 50 01 Fax no: (+ 48 22) 574 50 09

Maciej Rodak The Vice-President - Air Navigation Department Phone no: (+ 48 22) 574 65 01 Fax no: (+ 48 22) 574 65 09

Maciej Piotrowski The Vice-President - Finance and Administration Department Phone no: (+ 48 22) 574 63 01 Fax no: (+ 48 22) 574 63 09

Safety and Quality Management Office Phone no: (+ 48 22) 574 66 01 Fax no: (+ 48 22) 574 66 09

ATM/CNS Personnel Training and Development Office Phone no: (+ 48 22) 574 68 01 Fax no: (+ 48 22) 574 68 09

Research and Development Office Phone no: (+ 48 22) 574 61 01 Fax no: (+ 48 22) 574 61 09

Airspace Management and Operational Processing Office Phone no: (+ 48 22) 574 56 01 Fax no: (+ 48 22) 574 56 09

Air Traffic Services Office Phone no: (+ 48 22) 574 55 01 Fax no: (+ 48 22) 574 55 09

Technical Services Office Phone no: (+ 48 22) 574 53 01 Fax no: (+ 48 22) 574 53 09

Administrative Office Phone no: (+ 48 22) 574 67 01 Fax no: (+ 48 22) 574 63 09

Finance Office Phone no: (+ 48 22) 574 62 81 Fax no: (+ 48 22) 574 62 89

Head Accountant Phone no: (+ 48 22) 574 62 51 Fax no: (+ 48 22) 574 62 59

AEROSALES: All information concerning prepayments and complaints, and all suggestions and questions related to assessment and charging for navigation services should be addressed to our Aerosales Unit. E-mail address: aerosales@pansa.pl Phone no: (+ 48 22) 574 62 24 Phone no: (+ 48 22) 574 62 28

STRATEGIC PLANNING UNIT: E-mail address: ops@pansa.pl Phone no: (+ 48 22) 574 57 20 Fax no: (+ 48 22) 574 57 29

PUBLIC ORDERS DEPARTMENT: All questions and suggestions concerning the announcements published on the website should be sent directly to the Public Orders Department. Phone no: (+ 48 22) 574 63 65 Fax no: (+ 48 22) 574 63 59 --------------------------------------------------------- Edited by: Polish Air Navigation Services Agency Graphic design: Andrzej Karwowski Photos: Polish Air Navigation Services Agency Archives - Andrzej Karwowski

--------------------------------------------------------- Polish Air Navigation Services Agency ul. Wieżowa 8 02-147 Warsaw Phone no: (+ 48 22) 574 50 00 Fax no: (+ 48 22) 574 50 09 e-mail: info@pansa.pl www.pansa.pl