Generating PDF

A4E Assessment of the Draft SES 2+ Regulation

By  Brussels, — Last updated on 11 December 2023

Abstract

The current regulation concerning the Single European Sky (SES) was published in 2009 as Single European Sky II or SES II. In 2013, it was more than obvious that an overhaul was necessary and that a SES 2+ was discussed — but never finalised. On 22nd September 2020, the European Commission finally published its view on an updated SES regulatory framework that could achieve the original SES targets on the reduction of CO2, a reduction of delays and an increase in the cost efficiency of the ATM service provision.

The SES 2+ trilogue started on 13 July 2021, with the European Commission’s amended Single European Sky (SES) implementation proposal (recast), the European Parliament’s amendments to this text and the Council’s agreed general approach serving as the baseline for discussions. The ongoing trilogue discussions need to resolve the existing differences and achieve the original SES goals regarding the efficiency of the aviation environment as well as the envisaged environmental benefits.

With SES 2+ the European Parliament, the Council and the European Commission have the potential to establish a framework benefitting the environment, the European citizens and the aviation industry.

This paper summarizes the general views of Europe’s airlines and is intended to support further technical meetings.

Introduction

The SES 2+ trilogue started on 13 July 2021, with the European Commission’s amended Single European Sky (SES) implementation proposal (recast), the European Parliament’s amendments to this text and the Council’s agreed general approach serving as the baseline for discussions. This paper summarises the general views of Europe’s airlines and is intended to support the technical meetings during the trilogue process.

The SES 2+ Regulation is one of the key elements that will define the operational and business environment of aircraft operators and Air Navigation Service Providers (ANSPs) for possibly decades to come. The draft Regulation addresses, amongst others:

  • Performance regulation of the core topics: capacity, costs and environment through independent regulatory authorities
  • Network management
  • ATM service provision and liberalisation for certain services that can be provided under market conditions
  • Governance
  • Environment

The latest industry data shows a deepening crisis in the sector due to the COVID-19 pandemic, with air traffic in a continuing downward spiral and not predicted to recover to 2019 levels until 2024-2025 EUROCONTROL Forecast Update 2021-2027 (published 15 October 2021) https://www.eurocontrol.int/publication/eurocontrol-forecast-update-2021-2027. As one of the sectors hardest hit and with commercial aviation’s essential role in kick-starting societal and economic recovery – future SES policies must:

  • Guarantee and support the competitiveness of the European aviation sector.
  • Avoid overlap between regulations or double incentivising.
  • Promote new or more efficient business models for service provision and new ways of financing those.
  • Enable passengers, the environment, employees and industry to reap the benefits of digitalisation.

Economic regulation, performance and charging

Over the last decades, some ANSPs have moved away from being government administrations. Today their organisational structure ranges from government entities to shareholding companies (although most are owned by the State, with national laws enshrining this situation of government shareholdership). The COVID-19 crisis has shown that the current SES II framework for economic regulation is not only outdated but also not capable of addressing these changes effectively, including the subsequent conflicts of interest. As a result:

  • National Supervisory Authorities (NSAs) must be skilled, competent and independent from service providers and their owners and appropriately equipped with human and financial resources.
  • Their decision-making must be autonomous free of any influence and completely transparent (see setup of national regulatory authorities for the energy sector).
  • A regulatory framework must ensure a harmonised approach across all different forms of organisational structure or different national interpretations of regulatory texts.
  • For all services that are not already open for competition, the regulatory framework (performance regulation) must simulate market conditions for service providers and their owners and provide effective incentives to become more efficient.
  • A balanced risk-sharing approach is necessary.
  • Industry’s recovery and the ability to react to changing economic conditions or invest in environmentally friendly technologies must be supported by the Regulation.
  • SES 2+ should provide a level playing field for both EU and non-EU airspace users and service providers alike, driven by a set of key economic regulatory requirements and competencies – including the enforcement of corrective measures. Effective performance of the regulatory functions requires a suitable structure of strong economic regulators.
  • Harmonisation of economic regulation on a European level, i.e. facilitating a “new” Performance Review Body (PRB), is absolutely necessary.

A4E dedicated views on the European Parliament positions:

  • A4E supports the clarification of the Parliament regarding the independence of the NSA from any other body or entity falling within the scope of their supervision and in particular from the shareholders of any regulated ANSP. This also includes the amendments suggested to improve the independence of the staff of the NSA.
  • A4E supports a strong economic regulator which needs to be able to make independent decisions and enforce such decisions — and, if necessary, apply fines or penalties as suggested in Articles 42 and 42a of the Parliament amendments. Neither these costs nor the cost of corrective measures according to Article 14 shall be part of the determined costs.
  • A4E welcomes the amendments made by the Parliament to reinforce the role of a “new” PRB as they are supporting the statements made previously in the A4E position paper on economic regulation.
  • A4E supports the amendments made regarding the definition of EU-wide performance targets. This includes deleting the area of safety from the performance targets as safety is inherent to aviation. A4E also supports the possibility of the EC to add additional performance targets.

A4E dedicated views on the Council positions:

  • A4E recognises the intention to improve the independence of the NSAs in the Council amendments. Nevertheless, the amendments do not sufficiently strengthen the independence in decision-making of an NSA. An NSA must be independent not only from the ANSP or other regulated service providers but also from shareholder’s interests.A4E does not support the downgrading of the “new” PRB to a pure consultative body.
  • A4E supports the amendment allowing EC to suspend the performance system in case of a network crisis.
  • A4E supports the possibility for NSAs or the “new” PRB to impose penalties. Hence, A4E welcomes the clarification of the Parliament not to include these costs in the determined cost of ANSPs.

Network management

The capacity crisis in 2018/2019 as well as the COVID-19 pandemic has shown that network-centric processes work. These ensure the buy-in of all parties and improve network efficiency. Consequently, strengthening the network-centric approach of capacity planning is the logical next step – including the clear allocation of roles and responsibilities and the involvement of the user of the network at an early stage. Therefore:

  • A network-centric approach and airline need-based capacity planning increase network efficiency and resilience.
  • A clear allocation of roles, responsibilities and accountability at all levels (EU, national and between stakeholders) is mandatory – including the final decision-making power to ensure that the network continues to work at optimal efficiency.
  • Network management needs a cooperative decision-making process including all concerned stakeholders.
  • Environmental efficiency is at the heart of airlines, but airlines cannot be held responsible in any form when being prevented from implementing their efficient flight plans. This must be covered in the Network Collaborative Decision Making (CDM) process – including decisions on environmentally optimal trajectories.
  • Airlines, as users of the network with the most accurate information on flight planning and environmental impact must be at the centre of decision-making and decision-taking.
  • The CDM processes need to result in agreed and binding targets. Nevertheless, responsibilities, liability and appeal as well as a change process must be unambiguously defined in such a way that airlines’ ability to operate and ensure optimum routings is not impeded.

A4E dedicated views on the European Parliament positions:

  • A4E supports the proposed network functions but strongly suggests including a network capacity planning function that is based on airlines’ needs. A4E supports the empowerment of the Network Manager (NM).
  • A4E could support a binding Network Operations Pan (NOP) provided unambiguous definitions are established regarding the binding nature of it and how the decision-making process will be applied – not impeding airlines’ ability to operate efficiently.
  • A4E supports the implementation of a cooperative decision-making process.
  • A4E does not support the addition made in Article 27-6 allowing the NM to mandate flight plan corrections without a CDM process. Such mandated changes — without having the full knowledge of why these trajectories were submitted in their original form –, could have negative safety and environmental implications.

A4E dedicated views on the Council positions:

  • A4E supports the implementation of a CDM process. Member States will be part of the decision-making, but regional or local circumstances should not be driving strategic decisions at the network level.
  • A4E supports the idea of a “seamless provision of safe and efficient air traffic services within a Single European sky”. A4E has always promoted a uniform and harmonised implementation of procedures and technology on a European and global scale https://a4e.eu/publications/a4e-urges-the-eu-to-remove-airspace-inefficiencies/.

ATM service provision and liberalisation

The Single Aviation Market must be completed – as it has already been done for airlines. The unbundling of services, preparing for new players and service providers to enter the market and introducing competition among different services (e.g., the air traffic data services provider (ADSP) is a sensible approach. In addition:

  • Cost-efficient use of subcontracting as well as the efficient use of available resources, including air traffic controller (ATCO) capacity, must be ensured.
  • Unambiguous indicators will ensure that procurement takes place and decision-makers at all levels (from airports, ANSPs, or even States) can act transparently and without distorting the market.
  • The economic regulatory framework must support different business models, their supervision and regulation — as well as new financing models.

A4E dedicated views on the European Parliament positions:

  • A4E supports the possibility of Member States to individually or collectively designate service providers based on a competitive tendering process. Nevertheless, the timeframe of three years may not be sufficient for a sustainable business model.
  • A4E supports the procurement of services by ANSPs. In addition, unambiguous criteria need to be defined and subsequently met by ANSPs or airports if they do not want to procure services.
  • A4E supports a transparent arrangement of service provision by functional and organisational separation of the route and other services, such as terminal and approach services or air traffic data services (ADS), aeronautical information services (AIS), and communication, navigation and surveillance (CNS) services.

A4E dedicated views on the Council positions:

  • A4E supports the possibility of the procurement of services such as air navigation or terminal air traffic but it must not be subject to Member State approval.
  • A4E supports the limitation made on mandating the use of national facilities by service providers if this will ensure the efficient use of resources and does not limit competition.
  • A4E supports the waiver of establishing separate business entities for services offered by ANSPs to third parties under market conditions, under the strict condition that transparency of accounting is guaranteed.

Governance

Appropriate governance which ensures that the needs of the users of the system are fulfilled is part and parcel of all other areas addressed by the Regulation. Cooperation at all levels and between all actors is necessary to make the seamless, digital European sky a reality. To achieve this:

  • Airlines and all other stakeholders must be involved in the decision-making process concerning their vital interests and needs.
  • Decisions taken in a CDM must be reliable and allocate accountability so that airlines can base business decisions on the CDM results.
  • At a network level, the governance and decisions must maintain the efficiency of the network to ensure its environmental benefits.
  • Where development, deployment and de-activation of technology are concerned, decisions should be reliable and led by user requirements – not by the latest ideas.
  • Consultations regarding the performance and charging schemes must be meaningful, with reliable results and clear accountabilities.

A4E dedicated views on the European Parliament positions:

  • A4E supports the mandating of CDM as a standard decision-making process as well as mandating all Institutions to consult with the aviation stakeholders. Nevertheless, consultation must be meaningful.
  • A4E supports the importance given to interoperability and standardisation to ensure a synchronised implementation of the Single European Sky. Nevertheless, the needs of operational stakeholders must be considered.
  • A4E does not support the addition made in Article 27-6 allowing the NM to mandate flight plan corrections without a CDM process. Such mandated changes — without having the full knowledge of why these trajectories were submitted in their original form –, could have negative environmental implications.

A4E dedicated views on the Council positions:

  • A4E supports mandating CDM decision-making as the standard decision-making process as well as mandating all institutions to consult with the aviation stakeholders. Nevertheless, consultation results must not be overruled by biased decisions of Member States.
  • A4E supports the coordination between the institutions which are involved in the different SESAR (XXX) phases with a focus on industrialisation and coordination.

Environment

It is clear that environmental concerns are shaping the latest regulatory texts. Decarbonisation of all areas related to aviation is addressed in the various texts. As identified in our recent Destination 2050 (D2050) sectoral initiative, SES 2+ is linked to the ATM technology and ATM system efficiency decarbonisation pillar. As such:

  • European airlines are fully committed to decarbonising air transport and accelerating their efforts to make Europe the world’s first carbon-neutral continent by 2050 through the reduction of CO2 emissions in absolute terms and through CO2 mitigation. Acknowledging its responsibilities despite the current crisis, the EU aviation sector recently published its “Destination 2050 – A Route to Net Zero European Aviation” roadmap showing a pathway to reaching net zero CO2 emissions by 2050 Destination 2050 – A Route to Net Zero European aviation, A4E, ACI Europe, ASD, ERA, CANSO, February 2021. www.destination2050.eu/.
  • SES 2+ must focus on increasing ATM system efficiency, which, as outlined in D2050, has a direct, short-term, long-lasting and cost-effective impact on emissions.
  • Airspace users will focus on what they can control, i.e. efficient aircraft and operations as well as on-board technology supporting fuel-efficient flying. SES 2+ must ensure that these environmentally optimal trajectories can be flown without (undue) limitations.
  • The key performance indicators used to judge the efficiency of the ATM system must be adapted to reflect the network-centric approach and to avoid perverse incentives – unlike road traffic, the physically shortest route (based on great circle distance) is not always the most fuel-efficient one.

A4E dedicated views on the European Parliament positions:

  • A4E cannot support modulation of charges or a common unit rate due to a lack of currently available data. We therefore request a study be completed to clarify the potential mechanisms and how these would impact airlines.

A4E dedicated views on the Council positions:

  • A4E supports the deletion of the article introducing a common unit rate “For charging purposes, and when congestion causes significant network …”.
  • A4E cannot support modulation of charges due to a lack of data. It therefore requests a study be completed to clarify the potential mechanisms and how these would impact airlines. This is in line with “… the contribution of that modulation to the achievement of the Single European Sky objectives referred to in Article 1(1) and in the Commission’s communication on the European Green Deal, taking into consideration the competitiveness aspects, existing incentive schemes and other known alternatives.”. The study should also include the relation to other regulatory requirements (e.g., from the “Fit for 55” package).

Conclusion

A fully implemented Single and Digital European Sky is instrumental in:

  • Reducing the environmental impact and CO2 footprint of aviation
  • Delivering a cost-efficient ATM service provision
  • Supporting a smooth recovery and ensuring a healthy aviation industry

The trilogue meetings on technical or political levels need to focus on constructive compromises having the benefit of the industry at heart, whilst ensuring that all the efforts of the aviation industry to decarbonise are supported.

We urge the trilogue participants to consider the principles and views as outlined in this paper and stand ready to answer any further questions.