A new industry think tank has been launched to consider how the efficiency and performance of air traffic management (ATM) could be improved through greater market liberalization.

The ATM Policy Institute has been founded by the air navigation service providers (ANSPs) of New Zealand (Airways), the UK (NATS), Ireland (IAA) and the Czech Republic (ANS CR) and is chaired by former Eurocontrol DG  David McMillan. It will also work in close partnership with the Civil Air Navigation Services Organization (CANSO) in a bid to demonstrate the benefits of enabling ANSPs to compete with each other for the provision of ATM services.

“Liberalization revolutionized the airline industry and has been a global success story, driving growth across the world,” McMillan said. “Unfortunately, air traffic management remains largely a national monopoly, without the incentives necessary to drive up performance. We believe that by opening up parts of the ATM industry to greater liberalization significant benefits could be achieved, including reducing costs and minimizing the environmental impact of aviation, all while maintaining or improving on today’s safety levels.”

Speaking at the World ATM Congress in Madrid this week, McMillan pointed out that the case for reform had been made many times by many different stakeholders and particularly by the industry’s customers, principally the airlines. “The fact remains that the monopoly status of ATM persists in most places throughout the world, little tempered by effective economic regulation. The dead hand of government ownership and control means the incentives for many ANSPs to improve performance are weak. Add to that resistance to change in the industry, which has led to a failure to optimize performance.” 

But, he insisted: “It need not be that way and we hope to demonstrate that through our work. It is our belief that liberalization of the ATM industry would help address many of these performance issues, allowing ANSPs to act more independently of governments, freer to innovate, freer to respond more swiftly to market changes, and free to respond to customer airline requirements.”

McMillan acknowledged there were some tentative signs of progress. “Times are now changing, albeit very slowly and there is a real move in the ATM world.  We in the institute hope to give things a gentle push forward to provide economic research on policy matters, to lead the debate on how to improve the efficiency and the performance of ATM, and to communicate the benefits of enabling the ANSP community to compete with each other for the provision of ATM services.”

He stressed that the main business of ATM was the maintenance of safety, without which ANSPs didn’t have a business. “That must not and cannot change,” he said. “But there is room to generate incentives to improve cost efficiency, for those improvements to generate competition, and for that competition to give the benefits that always flow for service provision and a commercial focus.”

The institute believes that, where competition has been introduced, benefits are already evident. In Spain, changes in the provider of Terminal Air Navigation Services as a result of a competitive tender are estimated to have resulted in cost savings of around 50%, while in Sweden savings of 30%-40% have been reported.

The Institute has published a paper on ‘The case for liberalizing Air Traffic Control’ setting out the benefits of liberalizing the ATM industry as well as outlining a vision of what competition in ATM would look like. It plans to publish more detailed work in the autumn when it will host a workshop to share ideas and research on how greater competition can be introduced for the different activities undertaken by ANSPs, including Oceanic services and support services.