Airspace Q4 2017: Cleared for take off

1 December 2017

David McMillan, Chair of the ATM Policy institute, argues that the liberalisation of terminal air navigation services would benefit all partners in the aviation value chain.

The ATM Policy Institute, an industry think-tank established to consider the reform and modernisation of ATM services through market-based measures, recently published its second white paper, on the liberalisation of terminal air navigation services (TANS).

TANS keep aircraft apart at airports and, depending on the traffic and airspace complexity, on approach to the airport.

In the classic ATM service model, these services are provided by air navigation service providers, which, in line with te structure of much of the ATM industry, usually enjoy a long-term, if not statutory, monopoly. This often results in ANSPs adopting a 'onett

But the white paper notes that there is scope for considerably more market-friendly ways to deliver TANS services.

Competition Theory

There has been some liberalisation in the TANS area already, particularly in the US and in Europe. Nevertheless, there is scope the travelling public make looking at further market openings of interest.

TANS is, without question, a standalone market and as such should be subject to market disciplines. It can be considered separately from the provision of ATM and can often be subject to market forces and competition apart from the consideration of sovereignty and the provision of ATM services by ANSPs.

In any market, a lack of competition tends to lead to services that can be high priced, lack a keen customer focus, and be slow to adapt to customer needs. currently the TANS market shows all the behaviour the theory suggests.

Following competition theory, liberalising markets and opening them to competition should address the issues outline above.

In reviewing experiences where there has been liberalisation of TANS, the ATM Policy Institute has found considerable benefits. In examples in both Europe and the US, the white paper outlines how the cost of supplying TANS has reduced between 30% and 74%, achieved through the minimisation of administration and optimisation of productivity.

In one such example, London Gatwick issued a tender with the initial aim of increasing airport capacity and resiliency in peak traffic periods, both customer-driver requirements. The eventual outcome saw the airport find a provider not only able to fulfill its initial operational requirements but also able to do so at a lower cost.

Overall cost is not the sole pricing benefit to be gained from the liberalisation of the TANS market, however. Transparency of costings and thus price is also likely to occur. The unbundling of the TANS component of existing ANSP businesses improves pricing transparency, in turn reducing the opportunities for cross-subsidisation of services. It is only when there is a clear and transparent understanding of costs that a frank conversation with ANSP customers, and regulators, is possible.

Incumbent Innovation

The ATM Policy Institute argues that liberalising TANS services would not just have a positive impact on pricing. The speed of technological development would also improve.

In the field of innovation, the white paper cites evidence that th new TANS suppliers are increasingly responding to customer need in a race to find and delvier their unique selling proposition. In addition to the Gatwick example given above, a case study from London Heathrow outlines how incumbent providers have responded to the threat of competition and the need to retain market share by increasing customer engagement.

As airports are equally subject to the laws of competition theory, tt technological advances improve, in line with cooperation with TANS providers.

Additionally, current technologies are now under severe strain. Given the rapid development and expansion in the field of unmanned aircraft systems traffic management and autonomy, it is interesting to contemplate what the future form of competition will look like.

Market view

Given current technology and procedures, it is most likely that liberalisation would take the form of competition for the market, in which a TANS provider obtains an exclusive right to supply ttU competitive tendering focusing on operational requirements and price could be used to select a supplier, it is also possible that the mere threat of competition may galvanise an existing supplier to deliver improved value or quality.

The market for TANS is large and diverse. There appears little reason to exclude an airport from competition for TANS on the basis of its scale of operation, with current examples of competitive supply including both the busiest and relatively quiet locations.

At high intensity locations, an airport may look for experienced suppliers with the resources to ensure business resilience to supply tailored, high-performance services. At lower intensity locations, customers are likely to be more cost sensitive. competition theory would suggest that liberalising TANS would encourage providers to tailor-make their services for individual airports, allowing greater efficiency.

Safety first

There is no reason to suppose that liberalisation would compromise safety. In fact, the ATM Policy Institute argues that it would have quite the opposite effect.

Increased safety is a major point of distinction for a TANS provider, boosting its position in the market. case studies at the UK's Birmingham Airport and London Gatwick showed that absolutely no safety concerns were raised during the transition to new TANS providers.

Just as they do now, incumbent TANS suppliers would have to comply with State safety regulations on procedures and staff competency, and show that they have the capability and ttt4t may well require increased resources for the regulator too, to monitor a number of different suppliers.

Finally, the Institute emphasises that there is no need to wait for further innovation to liberalise TANS; the existing control tower technology is more than capable.

Although, of course, innovative suppliers may introduce new technology to support the higher quality service, this evolution is far from a prerequisite. At a recent ATM Policy Institute workshop in Dublin, it was noted that new technologies, such as remote ttt for TANS services.

And as the ability to utilise and optimise the available data matures, the balance in the relationship between the airport and the TANS supplier will also change. Airports are likely to become increasingly aware and demanding of better, more focused services from their TANS suppliers.

The white paper concludes that competition for TANS, when appropriately structured, leads to more cost effective, more customer-focussed, and more innovative ATM services for airports and their airline customers. Also, given the local nature of airports, liberalisation can take place piecemeal, commencing in regions and countries interested in taking advantage of these widespread liberalisation and reform.

Launched this year at World ATM congress in Madrid, the ATM Policy Institute was created to inform the debate on tttt that can be achieved through market liberalisation. The primary objective of the Institute is to illustrate the benefits of liberalising ATM to the aviation industry, governments and regulators. Its members include a number of ANSPs, as well as CANSO.

The paper can be found on the ATM Policy Institute website at



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