Airspace Q4 2017: Masters of our destiny

1 December 2017

Jason Harfield, Ceo of Airservices Australia, says these are exciting times for ANSPs and opportunities exist if the mindset is right.

Why did Airservices Australia need to undergo a major organisational change?

Our business model had served us very well. Air traffic was being moved safely and efficiently.

But the value it represented was diminishing. Although revenue was increasing 4-5% per annum, cost was increasing 6-7%.

When I began as CEO, Airservices was forecasting a loss of A$13 million on revenues of over A$1 billion, and had also already announced a potential 8% rise in prices, which obviously was not being well received.

But that was only going to get worse. Having to constantly cut costs or forego investment in the latest technology puts pressure on an organisation. Ultimately, that has an impact on safety.

It was clear we needed to reposition the organisation. And it is also true that there had not been a refresh in over a decade. It was time for change.

What did the Accelerate programme actually do?

Accelerate came from an organisational Business Diagnostic and Efficiency Review. There were no sacred cows in that review, everything was examined.

A lot of changes were recommended. We came up with a new information management strategy, rationalised our asset base and introduced new capability to support these changes. Most importantly, as there were things the organisation was doing that did not need to be done any more, we downsized significantly.

The repositioning of the organisation, through Accelerate, gave us A$177.5 million in savings annually, which represents 17% of
our cost base. The organisation went from five support staff for every four operational staff to four support staff for every five operational staff. The entire business was refocused around our core air traffic and firefighting services.

We did all this in 18 months and our frontline services were not affected at all. Our safety performance has been maintained and we now have a much better platform for future performance.

How will your pricing change? And is it more important to reduce prices rather than invest in the future?

Accelerate has meant that not only did we not implement a potential 8% rise in prices but also that we will continue to hold prices through next year. And then, with continued growth, we will be in a position to lower our prices.

Of course, the world can change and that plan is always under review, but this is a signal to the industry that we are as lean and as efficient as we can be and will continue to be so.

It is not so much about funding – we make sure that there is enough revenue to fund the investment we need – as it is about fostering aviation. That is part of our remit. Airservices has a role to play in promoting the industry within Australia and globally. It cannot be an economic impediment and it must be recognised that airlines have been struggling too.

Really, it is about ensuring our service always represents value.

Looking ahead, what will the OneSKY programme achieve?

Our current ATM automation system was commissioned in the late 1990s. If you bought a Pc back then and are still trying to use it today, you would understand the need for something new.

OneSKY will harmonise civil and military airspace. The transition will start in 2018 with the voice communication system and it will deliver over A$1 billion in benefits once complete.

The aim is to be a single flight information region. It would mean that 11% of world airspace is under one system.

Are space-based surveillance and long-range air traffic flow management the way forward for Airservices?

There is no doubt that moving away from ground-based line of sight technology to space-based surveillance is the future. And it is critical to long-range air traffic flow management because in theory every ANSP will have the ability to access information from anywhere on the globe.

Australia is a long flight for most people. Our national airline, Qantas, is starting a Perth-London Heathrow direct service in 2018. Imagine how we could improve that flight. When it gets to India on its way to Australia there is still 11 hours to go. From that point on, with long range air traffic flow management, we can optimise its journey home.

Also, we have some of the busiest city pairs in world traffic along our east coast, such as Sydney-Melbourne. With a lot of long-haul international flights arriving in this region too, it can get extremely busy. If we can smooth those international flights from a long way out, everybody will benefit.

Do you think governments understand the importance of air traffic management?

They do when it goes wrong! That very rarely happens though because ANSPs generally do a good job. You cannot feel or touch airspace, so it does not get noticed often.

But the problem is, when it does get noticed because of delays, it is already too late. The only way to remedy the situation is to start years before by implementing systems and processes that can cope with the increase in traffic. Government electoral cycles are such that this long-term planning needs to be driven by ANSPs.

The industry, including cANSO, must continue to ensure the value of air traffic management is understood. Aviation is a significant contributor to economic growth and ATM underpins aviation. We are the ones who unlock that value.

How important is it to cooperate with airports and airlines?

We are interdependent and if the aviation ecosystem is to be healthy then we must work in unison.

In Australia, there will be a new airport in Sydney and new runways in Perth, Brisbane and Melbourne. Some A$19 billion is being spent on aviation infrastructure improvements in the next five years and if we are to maximise the benefits of that investment it is vital that our strategies are aligned and that we cooperate as fully as possible. There needs to be a partnership and not a customer-supplier relationship.

What about regional cooperation? How do you ensure systems, strategies and ideas are aligned?

Our obligations, our flights, do not end at the boundary of our flight information region.

We work closely with Airways New Zealand to facilitate traffic across the Tasman Sea and we are also working closely with Papua New Guinea, Indonesia and our other neighbours in supporting them build their capability.

It is done for the betterment of the region. Traffic growth is huge, especially out of china. Working together is the best way of handling that.

In your view, what is the biggest challenge facing air traffic management in general?

ATM brings everything together. We facilitate the movement of people and cargo around the world. It could not happen without us, it is a great value proposition.

But it must be understood that it cannot be business as usual. ANSPs have to remain relevant. If airspace becomes the bottleneck in the aviation ecosystem, then that problem will get solved – but not by us.

Think of Apple, Uber, Google and many others. They will disrupt through business models and technology. Aircraft will not be the only airspace users to manage in the future. Think of Airbus and Boeing. They want to sell more aircraft. If congested skies mean they cannot sell, they will work to decongest the skies.

ANSPs provide a service. If that service falls short or does not represent value, then our customers will look elsewhere.

But that also makes it a very exciting time. There are so many opportunities ahead. The mindset must change, however, if we are to be masters of our own destiny.

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