EUROCONTROL EMOSIA. Make the right decisions on ATM investments

Transcription

1 EUROCONTROL EMOSIA Make the right decisions on ATM investments

2 About to make an investment? You are at a cross-roads in your ATM project, and are wondering which way to go? The European Model for Strategic ATM Investment Analysis (EMOSIA) is the right service to help you make the best decision and yield the best return on your investment. What is EMOSIA? EMOSIA is the first Cost and Benefit Analysis service designed for the European ATM/CNS community and an instrument for informed decision-making on ATM investments. It provides one generic model and five models adapted to the different stakeholder groups: Air Navigation Service Providers Airlines General Aviation Military Airports The overall aim is to guarantee that the best possible decisions are made, taking into account all stakeholders perspectives. How can EMOSIA help? To make decisions The objective of EMOSIA is to facilitate the decision-making process by setting pan-european standards for cost benefit analysis in a very dynamic and complex sector. The EMOSIA platform ensures that all involved parties speak the same language when deciding on ATM/CNS investments. In ATM, as well as other industries, having the right elements of a great concept doesn t guarantee commercial success. Similarly, in an optimisation initiative, delivering an elegant process solution or infrastructure doesn t guarantee widespread adoption. EMOSIA supports widespread adoption first by bringing Single European Sky ATM Research (SESAR) stakeholder groups together.

3 Its multi-stakeholder approach guarantees best decisions respecting all stakeholders perspectives. EMOSIA is a diagnostic service for decision-making and will accompany you throughout the process. Consider the last three meaningful decisions you were involved in and ask yourself the following questions? Were the decisions right? Were the decisions made with appropriate speed? Were the decisions executed well? Were the right people involved, in the right way, at the right time? The answer is not always straight-forward. EMOSIA uses processes and services designed for the European ATM/CNS community that increase the awareness for timely and sound decisions. When there s uncertainty Making investment decisions early on in a project means basing your decisions on limited information and, in a way, on uncertainty. EMOSIA is designed to take uncertainty into account. This means in practice that users can enter ranges of values rather than point estimates. With EMOSIA, the decision-maker identifies which uncertainties are critical. This also means that EMOSIA is a navigation service to bring structure to your project, and that you can already use EMOSIA at the beginning of your project when information is scarce. When cost and benefit analyses are needed EMOSIA is a process to develop cost and benefit analyses of European ATM projects. It is within the European Operation Concept Validation Methodology (E-OVCM) to guide the planning and decision-making on any improvement within SESAR, at every phase of the validation life-cycle. To share results EMOSIA is also an interactive service available 24 hours a day to make your own simulations.

4 How does EMOSIA work? EMOSIA has a step-by-step approach that follows the project development. An EMOSIA user never operates alone as financier, engineer, controller, pilot or manager. Instead, the EMOSIA user calls quick two-day workshops together with a multidisciplinary team of experts to map cost and benefit mechanisms with finesse and judgment. All possible aspects are considered, with a view to time and cost efficiency, in order to answer key questions: What is the benefit mechanism? A benefit mechanism describes the rationale for the causality connection between two indicators. It documents the changes that an action introduces into the ATM environment and how these changes lead to benefits. This often includes assumptions and/or options. KPI G2G Time Efficiency - % flight with add. Duration > 3 - average deviation Note Only primary delay (cause ATM) Only in nominal situations Costs to Passengers Gate-to-Gate Costs to Airlines Pax Opportunity Cost Only 1st y. Maintenance Cost Operational Improvement Gate to Gate Time efficiency 1 y. after Crew Cost Pax Compensation Strategic Maintenance Cost Gate to Gate Fuel efficiency KPI G2G Fuel Efficiency - % flight deviating more than 2.5% fuel cons. - average deviation Note Only primary delay (cause ATM) Only in nominal situations Only 1st y. 1 y. after Fuel Cost Strategic Fuel Cost G2G Fuel Efficiency Increase Gate-to-Gate Costs to Airlines Strategic Crew Cost Strategic A/C Ownership G2G Time Efficiency Increase

5 What really matters? EMOSIA focuses on what really matters by identifying the most critical variables, to the success of the project. Net Present Value (millions of euros) EMOSIA Variable 2010 Daily Movements Increase Girona Flight Time Savings Value of an Additional Flight Pre-Implementation Duration Implementation Duration Cost per Flight Minute Long Term Traffic Growth Rate Benefits Lag Commercial Aircraft to be Equipped Percentage of GPS Equipped Aircraft Wiring and ADS-B Certification Costs Transponder Costs GPS plus Installation Costs Non-Commercial Aircraft to be equipped Downtime Costs Base Case Variance > 50% 2 1 Variance < 20% Net Present Value = M What is the risk? Cumulative Probability NPV (Net Present Value) e.g. 50% chance NPV > 1480 EMOSIA weights the risk associated to a decision because it is not the same to get 1 billion with 9 chances out of ten or 5 chances out of ten. In the diagramme, there is one chance out of two that the value of the project is less than 1480 M Euros Millions of euros EMOSIA is well suited to support decisions ranging from the implementation of new ATM systems to the development of Functional Airspace Blocks or to decisions on new Single European Sky Regulations.

6 EMOSIA A success story EMOSIA was developed over the last decade with direct stakeholder involvement. It is the cost and benefit process used for SESAR, the Single European Sky Air Traffic Management Modernisation Programme. It has also been used in other European ATM programs such as Collaborative Decision-Making and CASCADE. In the last ten years there have been significant improvements in the understanding of the importance of uncertainties conducting research and development activities in the ATM environment. EMOSIA has helped executives to avoid traps such as: biases toward maintaining the current situation despite better alternatives; seeking out information supporting an existing option and discounting opposing information; misstating a problem, undermining the entire decision-making process; being overcautious when making estimates about uncertain events. These biases usually lead to inferior results over time. The best way to avoid all the traps and to protect the decision-makers is awareness. EMOSIA has excelled when aiming to enlighten the grey areas in the EATM CBA field to show executives what they can do to ensure that their important business decisions are sound and reliable. EMOSIA promotes awareness of and provides guidance on the economic benefits of civil aviation for European economies and CNS/ATM systems for civil aviation. It assists you in CNS/ATM systems implementation through the application of guidance on cost-benefit analysis. EMOSIA has strong support and buy-in from the stakeholders because it was developed, and will be maintained, in full cooperation with the ATM/CNS community. For more information, please contact: Paula LEAL DE MATOS paula.leal-de-matos@eurocontrol.int Tel: Fax:

7 What they think of EMOSIA Patrick Couliou, (SESAR Project Directorate) The return on investment when using the EMOSIA methodology for the assessment of ECAC-wide improvements lies not only in the NPV figures it delivers for making decisions, but in the boost it gives to the ATM stakeholders to move progressively towards a true business culture :partnership between customer and strategic supplier, buy-in of assumptions and shared belief in the results, identification of the true costs and benefits area.... Alex Wandels (CASCADE Programme Manager) The power of the EMOSIA approach is that it forces operational, technical and financial experts to sit together and talk through the subject application in a way and at a level of detail they would normally avoid. For CASCADE this has meant a great deal. In a couple of cases polite interest was turned into a genuine desire for implementation overnight. Access Economics (Australian Consulting Company) The EMOSIA and DFACS models illustrate how rigorous, systematic and comprehensive cost-benefit analyses of ATM investments can be undertaken. They serve as a best-practice guide for undertaking such analyses.

8 EUROCONTROL June 2014 European Organisation for the Safety of Air Navigation (EUROCONTROL) This document is published by EUROCONTROL for information purposes. It may be copied in whole or in part, provided that EUROCONTROL is mentioned as the source and it is not used for commercial purposes (i.e. for financial gain). The information in this document may not be modified without prior written permission from EUROCONTROL.