Introduction toIntroduction toHandsHands--on Exercise for the on Exercise for the

Development of Business CaseDevelopment of Business Case(Presented by Chaouki Mustapha(Presented by Chaouki Mustapha

Economist, ICAO)Economist, ICAO)

SIP/2004SIP/2004--WP21 WP21 Business case Business case

Special Implementation ProjectSpecial Implementation Project

Workshop on the development of business case for the Workshop on the development of business case for the implementation of CNS/ATM systemsimplementation of CNS/ATM systems

Cairo, 6Cairo, 6––9 September 20049 September 2004

2

Approach to developing a business case

Step 1: Define homogeneous ATM area (Region, State, Group of States, FIR, Group of FIRs)

Step 2: Input the data related to current infrastructure (as per WP4)

3

Approach to developing a business case(cont’d)

Step 3: Define implementation options for the air navigation service provider:

Input traffic forecastDefine implementation parameters such as start of analysis period, end of analysis period,CNS/ATM operational date, etc.Determine the approach to withdraw the current infrastructureDecide on the introduction of new systemsDefine a cost recovery scheme

4

Approach to developing a business case(cont’d)

Step 4: Perform Integrated AnalysisStep 5: Carry out comparative analysis of different scenariosStep 6: Determine the best scenario for the implementation of CNS/ATM systems

Results in Business Case

5

Scenario evaluation iterative process

PerformAnalysis

Store Results for future comparison

Select a new scenario

Is it the last scenario?

Scenarios comparative

Analysis

Output

7

Main Analysis OutputFor both the service provider and the airlines:

Expenditures cash flowsRevenues cash flows Net Present Value (NPV) of cash flowsBenefit to Cost ratioPay-back periodNet return

8

List of output charts

Traffic growthTotal ANS expenditures

Communications costsNavigation costsSurveillance costsATM costs

Total Airlines’ expendituresCommunications costsNavigation costsSurveillance costsATM costs

9

List of output charts(cont’d)

Total ANS revenuesAirline efficiency benefits

By locationCommunications costsNavigation costsSurveillance costsATM costs

The business case software

11

Business Case Software chart

Regions

States

FIRs

Locations

Locations Database

F&E Types

F&E costs

F&E Database

Facilities and Equipment Database

ANS Providers

Aircraft data Avionics data

Airlines

Database Manager

Air Traffic forecasts

ANS Providers

Airlines

Cost Recovery Policy

Scenario Builder Integrated analysis

Main Menu

Database Management

13

14

15

16

17

18

19

20

21

22

23

24

Scenario Builder

26

27

28

29

30

31

32

33

34

35