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Paper 94 -- FIVE YEARS EXPERIENCE IN ATM COST BENCHMARKING

Since 2003 the PRC releases annual ATM/CNS cost-effectiveness (ACE) benchmarking reports. These reports are based on mandatory information disclosure provided by the European Air Navigation Services Providers (ANSPs) to the PRC. They comprise factual data and analysis on cost-effectiveness and productivity, including historic and forward-looking trend analysis. The scope of the ACE reports is both en-route and terminal navigation services (i.e. gate-to-gate). The main focus is on the ATM/CNS provision costs as these costs are under the direct control and responsibility of the ANSP. Costs borne by airspace users for less than optimal quality of service are also considered. The report describes a performance framework for the analysis of cost-effectiveness. The framework highlights three key performance drivers contributing to cost-effectiveness (productivity, employment costs and support costs). In 2006, the Performance Review Unit (PRU) commissioned NERA to carry out an econometric analysis of ANSPs costs using ACE data for the period (2001-2004) to examine ANSPs relative cost efficiencies. This more normative analysis sets out a methodological framework based on sound economic theory. Stochastic Frontier Analysis (SFA) is used to attempt to identify cost inefficiencies. However, the model estimation is affected by several problems, including the too small size of the sample, multicollinearity and, the fact that potential exogenous factors are not identified.
Theme: Active ATM Performance Management
Keywords: ATM, Key Performance Indicators, Performance Measurement (or Metrics)
Posted by: Sebastien Portet
Note: Unset Received On Jan 26, 2007

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