For the companies and agencies that create solutions to today’s congestion and delay problems, according to industry analysts at Frost & Sullivan, the economic future should look bright.
Two words probably could best describe the air transportation environment today: "congestion" and "delays." These are growing problems facing both the commercial air carriers and the air traffic control (ATC) authorities throughout the world.
The U.S. Federal Aviation Administration (FAA) predicts departures from U.S. airports will rise 13% over the next decade, to more than 9.9 million. The airlines expect to board twice as many passengers by 2015. This is on top of equally dramatic growth in general aviation activity.
The bad news is the airways and airport congestion and flight delays that likely will result from such growth. The good news will be delivered to those ATC providers and manufacturers who contribute to abating these problems. Their collective initiative will represent a major, global modernization effort, and of course, an accompanying major price tag.
Somewhat overwhelmed by the urgent need to modernize, many government authorities involved with ATC have chosen to privatize. The current, most prominent example is the UK’s National Air Traffic Services (NATS), which seeks to divest 51% to the private sector.
Revenue from Fees
Airport privatization, too, is taking place throughout the world, according to a Boeing Commercial Airplane report, the aircraft manufacturer expects to see that trend continue.
Why would the private sector be interested in providing air traffic services? Boeing projects airport and route infrastructure services will generate revenues from airlines of more than $622 billion between 2000 and 2019, with annual revenues reaching $43 billion by 2019.
In Western and Central Europe, the privatization of air traffic service providers and the trend demonstrated by government to merge national activities will continue to demonstrate the needs to reduce costs and stimulate market demand. However, despite privatization efforts, political, bureaucratic and national interests, plus indirect trade barriers, will continue restraining the growth of ATC markets in various regions of the world.
Funding, too, presents a problem. For example, a demand for modern ATC equipment exists in eastern and southeastern Europe. But, according to Frost & Sullivan, purchasing dollars in countries that are still attempting to develop their overall economies are lacking, and are not likely to become available soon. Meanwhile, in the United States, the trend is to modernize existing FAA systems and develop enabling technologies for communication, navigation, surveillance/air traffic management (CNS/ATM).
The air transportation dilemma is quite apparent. Airways are still limited and airspace congestion is increasing, particularly in terminal areas. Airports are becoming more and more difficult to upgrade. One way to meet the requirements of ever-increasing air traffic is to optimize and create a higher level of automation for ATC systems. In large part, this calls for the establishment of a Free Flight environment in which the controller serves as a safety guard (rather than a traffic cop) in the most complicated and safety-related cases.
What the Market Requires
To accommodate the growth in air transportation, the ATC markets will require the following:
ATC authorities will increasingly outsource services to private corporations such as Lockheed Martin, Raytheon and Airsys ATM, to concentrate only on core business activities, says Frost & Sullivan. The next five years will bring increased involvement in the delivery of complete ATC systems accompanied by long-term service agreements between countries (service providers) and corporations in order to create and maintain effective systems. The ATC equipment manufacturers, therefore, will be tasked to initiate trends and demonstrate solutions for the next generation of ATC. All the while, they must work in close cooperation with the service providers on both technologies and services issues, the analyst company concludes.
Commercial-off-the-shelf (COTS) systems offer many advantages to ATC authorities. These systems use technologies and components with a wide industry base and provide an adequate number of suppliers. COTS products offer economies of scale, and with budgets tightening globally, lower costs become an important factor. Many ATC systems offer a long operational life, which implies the need for an adequate service and support structure, says Frost & Sullivan. Using commercially available products ensures a trained service and support structure. It also enables a company to adequately train users and correct many problems efficiently and cost-effectively.
The COTS structure will most likely remain in place, especially in the presence of a wide customer base. However, in high technology markets, product life cycles can be very short. So, the possibility exists that as new, more sophisticated products are developed, older products will lose the benefit of a large support structure over time.
COTS equipment also offers lower risk. Both the manufacturer and end-users have tested these commercially available products, hence, most significant problems have been unearthed and corrected, Frost & Sullivan notes.
Perhaps equal to COTS in benefits is open architecture, which allows for relatively easy systems expansion and upgrading. This is especially important in high technology markets such as air traffic control, where constant innovation creates new products in an ever-decreasing cycle.
In many cases, the definitions and standards of CNS/ATM have been created for only Phase I of the concept. Decisions regarding Phase II must still be made. However, an open architecture system allows for incorporation of the technology that the new standards will define. As the CNS/ATM concept evolves, the systems can evolve with it, Frost & Sullivan asserts.
Thus, end users can modernize their systems on a part-by-part basis (and as funding permits). Ease in expansion also allows smaller airports and centers to add systems and functionality as they grow.
Two Steps Toward Free Flight
There are several factors that drive growth in the air traffic control (ATC) marketplace. A major factor is the U.S. Federal Aviation Administration’s (FAA’s) two-phase Free Flight program. Similar modernization efforts are taking place in Europe.
Why two phases? The FAA has learned its lesson: Don’t try to do too much all at once without careful analysis of all critical factors. For industry, this may appear to slow progress toward modernization, but the agency would likely argue that progress by closely monitored phases will assure that modernization will take place. Essentially, the FAA is prioritizing its modernization efforts, then implementing these efforts, with plans to expand its application geographically as this proves viable.
Launched in 1998 and scheduled to end on Dec. 31, 2002, Phase 1 will achieve limited deployment of five sets of tools developed for Free Flight. They are:
Free Flight Phase 2, under the direction of the FAA’s John F. Thornton, is to run from 2003 to 2005. Its duty is to expand on the accomplishments of Phase 1, applying its best practices and lessons learned, so that components for a modernized National Airspace System can be coalesced.