www.askhelios.com

Management and technology consultants

World ATM Congress, 9th MarchJames Hanson

Business Model for Remote Towers

2

Who is really benefiting from remote towers?

3

Most airports don’t chose their ATC provider

Airport ATSGovernment

selected provider

Airport selected provider

National (en-route)

provider

Most other states

Competitively selectedprovider

Approach and aerodrome control services are provided in 80% of

States by the en route ANSP(ICAO Survey, 2007)

70-80% of airports are fully or

partially state-owned(ICAO, ACI)

Global ANSP ownership

Government or CAA entityAutonomous State OwnedPrivately OwnedOther

3 % privately owned ANSPs

4

In the absence of choice, airports (or airlines) must pay the price set by the monopoly ATC provider

50% of States exercise

economic oversight of

ANSPs

Statistics from ICAO Survey, 2007

50%More than

50%

20%

Cost-based ATC charge setting is used in over half of States

Only 20% of states enact price-setting

regulations or competition laws for

ANS

Subsidy is required, where cost

can’t be recovered

€€€€€• High cost ANS• Limited innovation• Airport has no say

50%

5

Subsidy is required for many airports, particularly smaller ones with insufficient traffic to cover costs

67% of airports

operate at a loss

Statistics from ACI Economics report 2013

6

Privatisation will create pressure on costs, but pressure increases with disruptive technologies

• British Telecom (BT) a monopoly until 1984

• Network infrastructure now ‘open’

• BT maintains 37% market share but market has been eroded

Source: Ofcom

62% of 16-45 year olds admit to never using their

home phone (source cable.co.uk)

7

For example, the proliferation of mobile phones has driven down cost of telecoms

Source: ThisIsMoney.co.uk

25p/min

0.8p/min

8

Could remote towers be the equivalent of the mobile phone for aerodrome ATC?

Remote Tower Module

Video images of airport

The ATC service is decoupled from the

airport location

Controller location is an independent

decision

9

Remote towers could lower the cost of ATC by… removing the capital costs of towers

Tower projectsMovements (2014) Country

Price ($m) year

Atlanta 868,359USA 44.2 2006Tivat 5294Montenegro 11.1 2015London Southend 30514UK 4.58 2011Recife 83638Brazil 6.01 2011Birmingham 97346UK 15.3 2013Mangalore 11501India 3.1 2015Taoyuan 208874China 26.2 2013La Palma 19455Spain 2 2012Gold Coast Airport 90000Australia 2.3 2012Lokichogia Airport 14000Kenya 1.18 2008Bogota El Dorado 304330Colombia 30 2013Manchester, New Hampshire 93000USA 50Heathrow 470695UK 76.81 2007Sofia 42120Bulgaria 7.5M 2012

10Remote Tower Centre

Airport 1Airport 2Airport 1

Remote towers could lower the cost of ATC by… lowering operating costs

Airport 2 Airport 3

0.000.501.001.502.002.503.003.504.004.505.00

0 5 10 15 20 25

Scale effects on airport air traffic controller productivity

Average ATCOs per unit

IFR

flig

hts

per

cont

rolle

r ho

ur

Saab

11

Remote towers could lower the cost of ATC by… providing more flexible pricing options

ATCcost

Movements

12

But would these cost savings be passed on to the airport or airlines?

13

Conclusions

Privatisation and deregulation will create pressure on costs as will a disruptive technology like remote towers, but for the airport ATC market to develop

both are needed

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Management and technology consultants

James Hansonjames.hanson@askhelios.com