Single European Sky Conference, LimassolLufthansa German AirlinesOctober 11, 2012Page 1

Single European Sky and Performance Schemefrom an European airline's point of view

Performance Scheme – are we on the right track?

Kay Kratky Member of the Lufthansa German Airlines Board Frankfurt & Flight Operations Lufthansa German Airlines

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What started 50 years ago …

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… and is still going strong?

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Single European Sky –

The idea also dates back to the 60s!

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(EC) No 219/2007establishing

SESAR Joint Undertaking

for private publicpartnership

(EC) No 1070/2009 amending (EC) 549/2004

SES IISource : Eurocontrol webpage

2020+

20142010 2012200419991960

Are we on the right track?Decades of initiatives for an integrated sky in Europe

13 December 1960

EUROCONTROL International Convention relating to

Cooperation for the Safety of Air Navigation is signed by the 6 founding States.

„The original aim of EUROCONTROL was to achieve the complete

integration of air traffic services in Europe.”

13 December 1960

EUROCONTROL International Convention relating to

Cooperation for the Safety of Air Navigation is signed by the 6 founding States.

„The original aim of EUROCONTROL was to achieve the complete

integration of air traffic services in Europe.”

1999start of SES

process COM (1999) 614

(EC) No 549/2004 Framework Regulation

for the creation of the single European Sky

2009SES II

regulatory package

2013: SES II+

?

(EC) No 691/2010Performance scheme

Regulation

SESAR Deployment

Phase (2013/14 - 2020+)

SESAR Development

Phase (2008 – 2016+)

SESAR Definition

Phase (2005-2008)

Examples; not all applicable SES regulation shown. Complete list “Report on the SES Legislation Implementation, Ch. 1.3, EUROCONTROL June 2012 Examples; not all applicable SES regulation shown. Complete list “Report on the SES Legislation Implementation, Ch. 1.3, EUROCONTROL June 2012

(EC)No 1794/2009 Charging scheme Regulation

(EC) No 550/2004 Service provision

Regulation

(EC) No 176/2011FAB information Regulation

2004SES I

regulatory package

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Consumers and airlines

pay the bill:

Delayed flights

Longer flight time

Higher fares

In 2011, in the EU ATM inefficiencies resulted in:

17.9 million minutesof ATFM delays

CO2 8.1 million tons

of wasted CO2

Approx. € 4 billion costs p.a. borne by airlines due to suboptimal cost-efficiency and fragmentation

SES Performance State of play

Source: IATA, Eurocontrol data

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AsiaPacific

Net profits of European airlines are under pressure

Source: ICAO revised data 2009-11. IATA estimates for regions in 2011. IATA forecasts for 2012 and 2013. September 2012

Europe North America

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ATM inefficiency in Europe

primarily affects European carriers

Benchmarking of the European ATM performance. US versus Europe: Significant room for improvement in Europe

Source: EUROCONTROL & FAA Study March 2012, figures 2010

Airspace (millions of km2) 10.4 11.5Flights

(IFR, in millions) 15.9 9.5Air Navigation Service Providers

(en route) 1 38Area control centers 20 63Air traffic controllers 14.6 16.7Flights per controller 1089 569

Share of departure delays > 15 min. due to en route constraints 0.1% 5.7%

Lack of efficiency of the European ATM system

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ATM performance has major impact on the airline cost structure. Example Lufthansa

Share of external costs - European traffic Share of external costs - European traffic

Impact estimation. Source costs:: Externally driven total costs Lufthansa Passage Kont traffic, Sep 2011 – Aug 2012.About 50% of total costs externally driven, about 50 % internally driven (staff, aircraft finance, maintenance, catering, sales & distribution etc).

Impact estimation. Source costs:: Externally driven total costs Lufthansa Passage Kont traffic, Sep 2011 – Aug 2012.About 50% of total costs externally driven, about 50 % internally driven (staff, aircraft finance, maintenance, catering, sales & distribution etc).

40 %40 %

ATC charges

ATC charges

Airport chargesAirport charges

otherother12 %12 %

FuelFuel

43 %43 %Airport throughputAirport throughput

Departure delaysDeparture delays

Free RoutingFree Routing

Civil / Military cooperationFlexible use of airspace

Civil / Military cooperationFlexible use of airspace

Arrival / Departure Management

Arrival / Departure Management

Optimised use of infrastructure

Optimised use of infrastructure

5%5%Significant influence

in case of SES implementation

Significant influence

in case of SES implementation

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FABs will by no means optimise airspace, technical and human resources by end 2012.

Member States must reinvent FAB governance. EU Commission must take the necessary action and enforce

compliance with legal FAB requirements.

Mandate assigned to EUROCONTROL. Significant contributions of Network Manager to SES target achievements

expected. Efficiency impact to be proven.

Significant differences between the individual efforts made by Member States in RP1 - poor performance in RP1 to be considered for RP2.

ATC charges in Europe remain very high despite Performance Scheme. Ambitious targets for RP2 required. High level goals of SES must be maintained by all means. Few quick wins so far – encouraging singular projects but massive

delay. SJU dominated by manufacturers and ANSPs. Governance and funding for SESAR Deployment not clarified yet.

Are we on the right track? Interim assessment of performance achievements from airline perspective

Performance Scheme

Network Manager

Functional Airspace Blocks (FABs)

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SES has not delivered yet

SES is most important for improving competitiveness of European carriers and economy.

Airlines cannot transmit benefit of SES to European consumers and environment so far.

European airlines are willing to contribute to the success of SES.

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SES II+regulatory framework

“Single European Sky: the time for action” ConferenceWe need:

Streamline and consolidate ATM operations Europe wide. More competition and liberalisation of the market.

1

Rethinking SES governance.Strong political guidance and more top-down approach.

2

Enforceable goals for the Performance Scheme (RP1 + RP2) and FABs, Network Manager, SESAR Deployment. Appropriate sanction mechanism.

Greater influence for the airspace users.4

5

Accelarate SESAR Deployment.Timely synchronised deployment air and ground.

3

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SES II + and Performance Scheme

Thank you for your attention

Get on the right track.NOW! FAST!Get on the right track.NOW! FAST!