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Future Airspace Strategy (FAS): UK Continuous Climb Operations (CCOs) Cost Benefit Analysis - (CBA) CAP 1062 - Civil Aviation ...
Future Airspace Strategy (FAS): UK Continuous
Climb Operations (CCOs) Cost Benefit Analysis
(CBA)
CAP 1062
Future Airspace Strategy (FAS): UK Continuous Climb Operations (CCOs) Cost Benefit Analysis - (CBA) CAP 1062 - Civil Aviation ...
Future Airspace Strategy (FAS): UK Continuous Climb Operations (CCOs) Cost Benefit Analysis - (CBA) CAP 1062 - Civil Aviation ...
CAP 1062

Future Airspace Strategy (FAS): UK
Continuous Climb Operations (CCOs) Cost
Benefit Analysis (CBA)

www.caa.co.uk

July 2013
Future Airspace Strategy (FAS): UK Continuous Climb Operations (CCOs) Cost Benefit Analysis - (CBA) CAP 1062 - Civil Aviation ...
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Future Airspace Strategy (FAS): UK Continuous Climb Operations (CCOs) Cost Benefit Analysis - (CBA) CAP 1062 - Civil Aviation ...
CAP 1062                                                                      Contents

            Contents

            Foreword		                                                   9

            Executive Summary                                            11
                         Background                                      11
                         Benefit to Cost Ratio (BCR)                     11
                         Benefits                                        12
                         Costs                                           13

            Section 1		                                                  14

            Future Airspace Strategy (FAS)                               14

            Section 2		                                                  15

            CCO study scope and limitations                              15

            Section 3		                                                  17

            CBA Design and Methodology                                   17

            Section 4		                                                  18

            Continuous Climb Operations (CCOs)                           18

            Section 5		                                                  20

            CCO Assumptions                                              20
                         Performance Based Navigation (PBN) capability   20
                         Scenarios                                       22
                         Major airspace redesign programmes              23
                         Coverage of costs and benefits                  24
                              Transition Altitude (TA)                   27
                              LAMP                                       28
                              NTCA                                       28

July 2013                                                                       Page 5
CAP 1062                                                                                  Contents

                               Other airspace redesign costs                         28
                          Aircraft categories                                        29
                          Calculating flight efficiency and CO2 savings              30
                          Air Traffic Demand                                         32
                          Airport Capacity                                           33
                          Fuel prices                                                34
                          Passenger time                                             34
                          Delay cost savings                                         34
                          Carbon prices                                              35
                          Price levels                                               35
                          Discount rate                                              36

            Section 6		                                                              37

            CCO Benefits		                                                           37
                          Quantified fuel efficiency, CO2 and time savings           37
                          Noise Benefits                                             39
                          Safety                                                     41
                          Access to controlled airspace                              42
                          ATC workload / sector capacity increase                    43
                          Benefits at airports not included in this study            43

            Section 7		                                                              45

            Direct CCO Costs (operations at airports included in this study)         45
                          Attributing costs                                          45
                          Aircraft equipage – Performance Based Navigation (PBN)     46
                          Airspace Modernisation                                     51
                               Major Airspace Modernisation Programmes (TA, LAMP,
                               NTCA)                                                 51
                               Airport level airspace redesign costs                 53
                          NPV of Total Costs                                         53

            Section 8		                                                              55

            Indirect costs (operations at impacted airports outside of this study)   55
                          Military costs                                             55

July 2013                                                                                   Page 6
CAP 1062                                                                                Contents

                            Cost to operators at airports outside the study        56

            Section 9		                                                            58

            Summary of NPV of Costs and Benefits                                   58

            Section 10		                                                           59

            Benefit to Cost Ratio (BCR)                                            59

            Section 11		                                                           62

            Distributional Analysis                                                62

            Annex A

            Assessing the Overall Benefits of FAS Deployment                       64

            Annex B

            Developing a Cost Benefit Analysis (CBA) framework for the FAS         66

            Annex C

            Total Aircraft Movements 2011                                          68

            Annex D

            CCO baseline performance at Heathrow, Gatwick, Stansted,
            Manchester and Birmingham                                              70

            Annex E

            Carbon prices                                                          73

            Annex F

            Example of derivation of baseline 2011 expected benefits by aircraft
            type at Heathrow                                                       75

July 2013                                                                                 Page 7
CAP 1062	                                                                              Contents

             Annex G

             Baseline year (2011) benefits by airport                              78

             Annex H

             Sensitivity Analysis                                                  81
                           CCO Scenario – 80 per cent and 60 per cent continuous
                           climbs achieved                                         81
                           Discount Rate – UK recommended rate of 3.5 per cent     85
                           Exchange Rate – 2012 average Euro exchange rate         86

             Annex I

             CAA PBN Capability Study results                                      89

             Annex J

             Summary of Assumptions and Uncertainties                              90

             Annex K

             York Aviation Independent Validation Commentary                       96

July 2013                                                                                 Page 8
CAP 1062                                                                                              Foreword

            Foreword

            Aviation relies on the scarce resource that is airspace to ensure that consumers,
            businesses, the military and leisure flyers enjoy the many benefits aviation brings.
            The basic structure of the UK’s airspace was developed over forty years ago. Since
            then there have been huge changes in the pressures on airspace, including a hundred
            fold increase in demand for aviation coupled with intense pressure to mitigate the
            environmental impacts of aviation From the airline perspective, fuel accounts for their
            largest cost and, as a consequence, any operational profile that reduces fuel burn has
            both an environmental and an economic benefit.
            Throughout Europe there is ambition to simplify and harmonise the way airspace
            and air traffic control is used through the Single European Sky project. In the UK and
            Ireland we’re meeting those and other issues through the Future Airspace Strategy
            (FAS) which sets out a plan to modernise airspace by 2020.
            To help quantify the benefits that FAS can deliver, and the costs of implementing
            these changes, we have undertaken a detailed study on one of the main benefits that
            we anticipate – Continuous Climb Operations (CCO), where an aircraft is able to climb
            to its optimal cruising height without having to stop at various levels in-between,
            which is currently the case in many tactical situations.
            We wanted to scope the benefits to consumers and wider society from this FAS
            deliverable and also provide findings from a wider consumer and societal perspective,
            rather than the commercially focused assessments industry stakeholders will
            produce as part of their own investment strategies to realise the benefits of FAS.
            While the study examines only one of the operational improvements that FAS could
            bring, it also aims to set a framework for future FAS analysis that would build a
            comprehensive picture of the full benefits and costs associated with this important
            project.
            We encourage you to review this document and use it and its findings where
            appropriate in your organisation. We are keen to hear any feedback that you have on
            this type of work and the benefits you consider it brings to the industry. If you have
            any comments on it or would like to discuss this work in more detail please email
            Amanda Downing (amanda.downing@caa.co.uk)

            Mark Swan
            Director of Airspace Policy

July 2013                                                                                               Page 9
York                                                                                                       York Aviation LLP
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 Aviation                                                                                                     Spring Gardens
                                                                                                                 Macclesfield
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                                                                                                           Tel: 01625 614051
                                                                                                           Fax: 01625 426159
                                                                                    E-mail: louise.congdon@yorkaviation.co.uk
                                                                                                     www.yorkaviation.co.uk

18th April 2013

Continuous Climb Operations (CCOs) Cost Benefit Analysis: Validation & Assurance

We have now had the opportunity to review the revised draft of Continuous Climb Operations
(CCOs) Cost Benefit Analysis. We note that this version has addressed the great majority of our
comments from the previous draft.

We have revised our note (see Annex K) to delete points which have been fully resolved. The
comments that remain have generally been addressed in the revised draft, but they relate to issues
and uncertainties that are not practically solvable and which we believe need to be recorded as
such. Where this is the case, we recognise that appropriate wording has been added to the Report
to clarify the position in relation to these issues and note their existence and their potential impact
on the analysis. They do, however, of course, remain weaknesses and hence they remain in our
accompanying note.

We have also reiterated some previous comments that agreed with the approach taken in relation
to potentially particularly important assumptions.

Overall, we are happy to verify that we believe the Continuous Climb Operations (CCOs) Cost
Benefit Analysis to:

     be methodologically appropriate to undertaking a high level analysis of an
      operation outcome in this context and that it includes all relevant aspects;

     have taken a sensible approach to the limitations and biases of the sources of
      data;

     have been conducted in line with best practice.
Best regards

Louise Congdon

Managing Partner
CAP 1062                                                                             Executive Summary

            Executive Summary

            Background
            1.    The approach of this study was to provide a high level assessment of
                  the benefits and costs of continuous climb implementation across the
                  UK.

            2.    It forms only one part of the overall evaluation of FAS benefits. It
                  captures the impact of implementing fully systemised continuous climb
                  operations only and therefore does not capture all the benefits expected
                  from full FAS deployment.

            3.    The costs and benefits are highly dependent on the deployment plan
                  timescale and therefore represent an illustration of what benefits
                  and costs could be expected under such timescales and will change
                  depending on the final timescale agreed for FAS deployments affecting
                  continuous climb operations.

            4.    At this stage, not all the costs and benefits are known but quantification
                  of the benefits and costs has been done to the maximum possible
                  extent and remain estimates in approximate terms. Qualitative benefits
                  and costs have also been identified and described where possible.

            Benefit to Cost Ratio (BCR)
            5.    The BCR was positive for central scenarios assuming fully systemised
                  CCOs for the airports included in this study. This indicates a net benefit
                  to the UK from supporting the implementation of fully systemised
                  CCOs.

            6.    The BCRs ranges from 2.1 (benefits 110 per cent greater than costs) to
                  4.1 (benefits 310 per cent greater than costs) depending on how quickly
                  fully systemised CCOs could be implemented and the extent of the
                  costs faced.

            7.    If fully systemised CCOs were not able to be achieved, the BCRs
                  decrease significantly. 80 per cent CCO achievement generates a BCR
                  range of 1.3 to 2.6 and a 60 per cent CCO achievement generates a BCR
                  range of 0.6 to 1.3. These situations include scenarios where the net
                  benefits are not greater than the net costs.

July 2013                                                                                      Page 11
CAP 1062                                                                               Executive Summary

            8.    Military costs have not been factored into this analysis. However, as
                  long as military costs directly attributable to fully systemised CCOs are
                  less than approximately £70 million a net benefit to the UK from fully
                  systemised CCOs should remain.

            9.    Passengers and commercial aircraft operators at the airports included
                  in the study would be clear winners of fully systemised CCOs with
                  benefits significantly greater than the costs.

            10.   The position of airports, ANSPs and aircraft operators outside the
                  airports in this study is less clear as many of the benefits to these
                  stakeholders have not been able to be fully quantified, e.g. safety
                  benefits, pilot and controller workload and potential airspace capacity
                  release. However, this is only one operational improvement and it is
                  widely expected that these stakeholders will receive significant benefits
                  in other areas.

            11.   The military position is less favourable, with costs incurred but the
                  benefit limited to the ability to continue to operate as they do currently.

            Benefits
            12.   Quantified benefits include fuel savings, passenger time savings,
                  operator time savings and CO2 emission savings. Other possible
                  qualitative benefits include safety, air traffic controller workload, and the
                  release of controlled airspace.

            13.   The expected benefits from fully systemised continuous climb
                  operations (CCOs) across the UK could be up to £16 million per year.
                  Of this 26 per cent is expected to accrue to aircraft operators through
                  reduced fuel costs, a further 30 per cent to aircraft operators through
                  time and maintenance savings, 43 per cent to passengers through time
                  savings and 2 per cent to reduced carbon emissions.

            14.   Over the timeframe of the FAS (up to 2030) expected benefits from
                  fully systemised CCOs could range from £142 million to £208 million
                  depending on the implementation timescales of the different airports.

            15.   Expected benefits from CCOs depend on the implementation
                  timeframe for the airports with the greatest possible benefits to be
                  achieved. Expected benefits are highest when fully systemised CCOs
                  at Heathrow and London City airports are implemented at the beginning
                  rather than the end of the deployment phase. A late implementation of

July 2013                                                                                         Page 12
CAP 1062                                                                                 Executive Summary

                    Heathrow and London City airports results in approximately 30 per cent
                    loss of total expected benefits.

            16.     Expected benefits from CCOs are also highly dependent on the extent
                    to which full systemisation of CCOs can be achieved. Fully systemised
                    CCOs generated 60 per cent greater benefits compared to 80 per cent
                    CCO achievement, and fully systemised CCOs generated 230 per cent
                    greater benefits compared to a 60% CCO achievement level.

            Costs
            17.     Quantified direct costs include aircraft retrofit, airport airspace redesign,
                    and major airspace redesign and potential indirect costs to other
                    operators. These costs have been assumed to include the necessary
                    training, consultation, certification and publication of procedure costs.

            18.     It is not currently possible to quantify any costs to the UK military
                    related to aircraft retrofit.

            19.     Over the timeframe of the FAS (up to 2030) estimated direct costs
                    attributable to fully systemised CCOs could range from £41.7 million
                    under a low cost scenario to £65.3 million under a high cost scenario
                    depending on the implementation timescales of the different airports.

            20.     If indirect costs are included the estimated costs attributable to fully
                    systemised climbs would increase to £42.1 million under a low cost
                    scenario to £70.7 million under a high cost scenario.

July 2013                                                                                           Page 13
CAP 1062                                                                        Section 1: Future Airspace Strategy (FAS)

            SECTION 1
            1

            Future Airspace Strategy (FAS)

            1.1        The UK’s FAS was developed by the CAA, with contributions from
                       the Department for Transport (DfT), Ministry of Defence (MoD) and
                       NATS (the UK’s main Air Navigation Service Provider), and considers
                       the development of the UK’s airspace system from 2011 to 2030.
                       The Strategy sets the direction for how planning, management and
                       regulation of UK airspace should develop to maintain and improve
                       the UK’s high levels of safety while addressing the many different
                       requirements on the airspace system, and delivering balanced or
                       ‘optimal’ outcomes, taking into account all those involved in, or affected
                       by, the use of airspace.1

            1.2        The FAS itself did not provide a detailed roadmap or plan for the
                       implementation of changes to the UK’s airspace system. Similarly,
                       it did not provide a blueprint, or future design for the UK’s airspace
                       structure, but it did set the direction for future detailed pieces of work
                       to be progressed in these areas. A FAS industry implementation group
                       (FASIIG) was set up in 2011 in order to drive forward the development of
                       a network-wide FAS deployment plan by end of 2012. The deployment
                       plan includes detailed actions required across the industry as well as
                       a network-wide assessment of the benefits and costs associated with
                       FAS deployment.

            1 CAA (2011) Future Airspace Strategy for the United Kingdom 2011 to 2030; http://www.caa.co.uk/
              default.aspx?catid=64&pageid=12068

July 2013                                                                                                        Page 14
CAP 1062                                                                        Section 2: CCO study scope and limitations

            SECTION 2
            2

            CCO study scope and limitations

            2.1        The CAA is particularly interested in the benefits to consumers and
                       wider society from the FAS and is therefore leading this work to assess
                       the costs and benefits from a wider consumer and societal perspective
                       separately from the commercially focused assessments industry
                       stakeholders will produce as part of their own investment strategies.

            2.2        This study examines only one of the operational improvements,
                       CCOs, expected as part of FAS deployment and does not capture all
                       the benefits expected from full FAS deployment. It also aims to set
                       a framework for future strategic FAS deployment analysis working
                       towards a more comprehensive picture of the full benefits and costs
                       associated with FAS deployment.

            2.3        This work is purposely structured from a strategic network-wide
                       level and does not attempt to capture the level of detail that one
                       would expect to see from industry stakeholders regarding their own
                       individual business cases for FAS deployment. It is intended to provide
                       the industry, and the CAA, with an assessment of the strategic
                       benefits available to consumers and society from the FAS and leaves
                       industry stakeholders to develop a commercially viable deployment
                       plan to realise these benefits. It is recognised that the realisation of
                       CCO benefits in this study is dependent on this commercially viable
                       deployment plan, which may be more difficult for some stakeholders.
                       However, the CAA hope that the results of this study and evidence
                       of wider network benefits could be used by stakeholders in the
                       development of their individual commercial investment plans.

            2.4        It is not expected that the figures in this report will align exactly to other
                       cost benefit studies in the industry2. The scope and focus of this study
                       is likely to be different as this report solely captures CCO benefits and
                       other reports are likely to cover other operational changes or different

            2 Other cost benefits studies in the industry include SESAR Macroeconomic CBA (http://www.
              sesarju.eu/news-press/documents/assessing-macroeconomic-impact-sesar-874), and other
              potential organisation specific business cases, e.g. future LAMP, TA, or NTCA business cases
              produced by NATS, airport business cases for airspace changes, or aircraft operator business cases
              for aircraft retrofit.

July 2013                                                                                                          Page 15
CAP 1062                                                          Section 2: CCO study scope and limitations

                  timescales; however, this reports uses transparent industry and UK
                  recommended standard assumptions where possible.

            2.5   Sections 4 and 5 describe continuous climb operations (CCOs) and
                  the assumptions used in the study to assess the benefits and costs
                  of CCOs. Sections 6 and 7, respectively, set out how the estimated
                  benefits and costs of implementing full continuous climb operations
                  have been calculated. Section 8 describes the impact at airports and to
                  airspace users not included in this study and finally section 9 illustrates
                  the impact across different groups of users in the UK.

July 2013                                                                                           Page 16
CAP 1062                                                           Section 3: CBA Design and Methodology

            SECTION 3
            3

            CBA Design and Methodology

            3.1    Quantification of the benefits and costs has been done to the extent
                   required to provide a robust strategic assessment of the costs and
                   benefits. Qualitative benefits and costs have also been identified and
                   described where possible.

            3.2    As an initial step towards developing a methodology to be applied
                   rigorously in the future, this study covers the costs and benefits for
                   continuous climb operations only, which is only one of many operational
                   improvement areas in the FAS. Annex A in this report covers the wider
                   context of the overall assessment of the benefits of the FAS and Annex
                   B describes the development of a cost benefit analysis framework for
                   operational improvements in the FAS that was used in order to conduct
                   this study.

July 2013                                                                                        Page 17
CAP 1062                                                                Section 4: Continuous Climb Operations (CCOs)

            SECTION 4
            4

            Continuous Climb Operations (CCOs)

            4.1        One of the characteristics of the UK’s future airspace system as
                       described in the FAS document is routeing based on ‘user preferred
                       trajectories’. User preferred trajectories include a 2D element to allow
                       users’ preferences to fly as direct a route as possible across the ground
                       (horizontal performance); a 3D element to allow users’ preference
                       to fly an optimal vertical profile that minimises fuel burn (vertical
                       performance); and a 4D element that introduces the dimension of
                       time, allowing users to combine horizontal and vertical performance
                       while ensuring synchronisation of flight profiles to minimise, and where
                       possible, remove delays and optimise the overall flow of air traffic.

            4.2        In June 2012 a voluntary industry Departures Code of Practice was
                       published by Sustainable Aviation compiled by a group representing
                       aerospace manufacturers, airlines, airports, air traffic control, and the
                       CAA’s Environmental Research and Consultancy Department (ERCD).3
                       It gives advice on operational techniques, including CCOs, aimed
                       at improving the environmental impacts of aircraft operations. The
                       Sustainable Aviation work has been used in this study to define the
                       concept of a CCO, but not in the actual calculation of expected benefits.

            4.3        In this study, CCOs refer to the removal of the airspace constraints
                       that result in a stepped climb to cruise, thereby providing an optimised
                       continuous climb, dependent on the aircraft’s own configuration and
                       performance capability, which varies across the fleet of aircraft operating
                       in UK airspace. Figure 1 below illustrates the components of a perfect
                       flight based on vertical performance, which includes a continuous climb
                       component. A continuous climb from departure to cruising altitude
                       significantly increases the fuel efficiency of the aircraft delivering fuel
                       savings to aircraft operators as well as delivering emission savings.

            4.4        As highlighted in the Departures Code, the principle of a CCO is
                       to provide a continuous climb from lift-off to optimum cruise level.
                       However, fuel savings can also be realised by minimising the duration
                       of level flight and/or increasing the altitude at which any necessary

            3 Sustainable Aviation (June 2012) Reducing the Environmental Impacts of Ground Operations
              and Departing Aircraft. http://www.sustainableaviation.co.uk/wp-content/uploads/
              DCOPractice2012approvedhi-res.pdf (last accessed 17/8/2012)

July 2013                                                                                                    Page 18
CAP 1062                                                          Section 4: Continuous Climb Operations (CCOs)

                     level offs are given. Fuel penalties increase with the number of level off
                     segments incurred by the aircraft. The Departures Code illustrates that
                     the fuel penalty for an aircraft with one level off segment at 6,000ft at
                     ten nautical miles is between three and seven per cent, which is lower
                     than the fuel penalty of between five and eight per cent for two level
                     offs with one at 6,000ft for ten nautical miles and a second at flight level
                     195 for five nautical miles. As mentioned in 4.2 this data has not been
                     used in the actual calculation of expected benefits in this study, but
                     does support that fuel savings can be expected from removing level off
                     segments.

            4.5      Currently within the UK, aircraft can be offered a continuous climb if it is
                     cleared to do so by an air traffic controller (ATC) on a tactical basis and
                     the airspace design permits it to occur; however these procedures are
                     not included in the standard instrument departures (SIDs) and cannot be
                     offered on a routine basis. This is due to the complexity of the current
                     airspace design from a number of factors, such as the close proximity
                     of other airports, the need to level off aircraft to de-conflict with another
                     aircraft trajectory and the use of, and need to avoid, airborne holding
                     stacks. Full user preferred trajectories would not be possible in densely
                     trafficked terminal manouvering areas (TMAs), due to the complexity
                     cause by a wide range of different arrival and departure routes.
                     Consequently the optimum design within a TMA is likely to be a highly
                     systemised structure of 2 and 3-D routes that incorporate continuous
                     climb and continuous descent operations.

            Figure 1 - NATS depiction of the perfect flight based on vertical performance

July 2013                                                                                              Page 19
CAP 1062                                                                                    Section 5: CCO Assumptions

            SECTION 5
            5

            CCO Assumptions

            5.1        This section describes the assumptions that have been used in this
                       study.

            Performance Based Navigation (PBN) capability
            5.2        PBN sets the level of accuracy, integrity and continuity that an
                       aircraft’s navigation systems will have to meet as well as the required
                       functionality. PBN will allow the implementation of airspace structures
                       that take advantage of aircraft able to fly more flexible, accurate,
                       repeatable and therefore deterministic three dimensional flight paths
                       using onboard equipment capabilities. It has been described as
                       reengineering the way we fly.

            5.3        PBN requirements are expressed in navigation specifications in terms of
                       accuracy, integrity, continuity and functionality required for the operation
                       on a particular route or procedure. PBN is described through RNAV and
                       RNP Applications with respective RNAV and RNP Operations.

            5.4        RNAV (RNAV1 , RNAV 5 etc.)– navigation specification based on
                       area navigation that does not include the requirement for on-board
                       performance monitoring and alerting

            5.5        RNP (RNP 4 etc.) – navigation specification based on area navigation
                       that includes the requirement for on-board performance monitoring and
                       alerting.

            5.6        In October 2011, the CAA and IAA jointly published the Policy for the
                       Application of Performance-based Navigation in UK/Ireland Airspace4.
                       It set out the framework around which PBN can be applied as well
                       as providing the regulatory mechanism for the scale of change that
                       will have to be undertaken by the respective Air Navigation Service
                       Providers (ANSPs) in order to realise the projected benefits. The PBN
                       policy stated that RNAV1 capable aircraft should operate on strategic
                       ATS routes, all new terminal airspace procedures shall be designed
                       using PBN terminal airspace procedure criteria and that all new terminal
                       airspace designs should facilitate the use of CCO and CDOs. A “soft

            4 CAA (October 2011) Policy for the Application of Performance-based Navigation in UK/Ireland
              Airspace; http://www.caa.co.uk/default.aspx?catid=7&pagetype=90&pageid=13334

July 2013                                                                                                      Page 20
CAP 1062                                                                       Section 5: CCO Assumptions

                   mandate” for PBN in terminal airspace is also provided, which could
                   mean that the CAA would provide a mandate for a specific route or
                   volume of airspace only rather than a requirement for all UK aircraft
                   operators. This study has assumed PBN capability for only aircraft
                   operating at the airports included in this study in line with the “soft
                   mandate” approach.

            5.7    PBN will lead to flight efficiency improvement and allow optimisation
                   of the airspace. Without the constraints of navigating via fixed, ground-
                   based aids, it provides the airspace designer with a powerful tool in
                   terms of positioning routes and instrument flight procedures in relation
                   to areas of congestion or population density. PBN can offer predictable
                   and repeatable path trajectories moving to a systemised environment
                   with designed interactions, and closer spaced routes, amongst other
                   benefits.

            5.8    From an airspace and airports perspective the envisaged benefits of
                   PBN include an increase in capacity in existing controlled airspace,
                   greater access to airports (especially for general aviation (GA) aircraft
                   which have traditionally been limited due to their basic equipment),
                   improvements in safety, and a reduction in the effects that flights have
                   on the environment from more efficient routes and more accurate path
                   keeping for noise abatement.

            5.9    From an ANSP perspective the envisaged benefits of PBN include
                   reduced service cost through reduced navigational infrastructure,
                   increased systemisation and increased controller productivity;
                   improvement in safety and improvement in the quality of the service to
                   meet new airspace user requirements. The navigation infrastructure is
                   a key element of PBN and is linked to a move towards a space-based
                   navigation environment. This in turn will allow rationalisation of ground
                   infrastructure (e.g. VOR) leading to savings from capital investment,
                   maintenance and spectrum utilisation.

            5.10   Given the strong regulatory policy direction this study assumes that
                   all future SID and airspace redesigns included in an airspace change
                   proposal under CAP725 will be based on PBN procedures and therefore
                   require PBN compliance from aircraft operating in that area. Specifically,
                   this study has assumed that airspace changes to implement fully
                   systemised CCOs will require a RNAV1 level of PBN capability.

July 2013                                                                                        Page 21
CAP 1062                                                                             Section 5: CCO Assumptions

            Scenarios
            5.11       The benefits and costs in this study have been assessed against a
                       baseline, or “do nothing”, scenario. The baseline scenario is based on the
                       actual radar data and current CCO performance up to at least 18,000ft
                       and assumes a continuation of this level of CCO performance in the
                       future. It is recognised that this does not take into account departures
                       where a level off was first incurred at/or above 18,000ft; however,
                       the vast majority of level off segments will occur below 18,000ft and
                       therefore this is deemed to be a satisfactory approximation for baseline
                       performance.

            5.12       Currently CCOs in the UK are generally offered on a tactical basis by air
                       traffic controllers based on available capacity. In the baseline scenario, if
                       increased traffic levels were to decrease the frequency at which tactical
                       CCOs could be offered the baseline CCO performance level would
                       decrease. If this were the case benefits would be expected to be higher
                       than those included in this study as there would be a greater potential
                       benefit from fully systemised CCOs.

            5.13       The three CCO scenarios, or “do something” scenarios, in this study
                       assume a full continuous climb (based on aircraft performance)
                       from departure to cruise level and attempt to reflect the difference
                       in expected benefits related to the timing and coordination of
                       implementation:

                       ƒƒCCO Scenario 1 – early full implementation

                          ƒƒAll airports implement CCOs by 2016

                       ƒƒCCO Scenario 2 – staged implementation leading with Heathrow

                          ƒƒLTMA5 – Heathrow / London city from 2016; Gatwick from 2018;
                            Stansted/Luton from 2020

                          ƒƒNTCA6 – all from 2016

                          ƒƒElsewhere7 from 2016

                       ƒƒCCO Scenario 3 – staged implementation finishing with Heathrow

                          ƒƒLTMA – Stansted/Luton from 2016; Gatwick from 2018; Heathrow /
                            London city from 2020

            5 Includes Heathrow, Gatwick, Stansted, Luton and London City airports
            6 Includes Manchester, Liverpool John Lennon, and Newcastle airports
            7 Includes Birmingham, Edinburgh and Glasgow, Bristol

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                     ƒƒNTCA – all from 2016

                     ƒƒElsewhere from 2016

            5.14   These scenarios are affected by three key factors. Firstly, benefits and
                   costs are highly dependent on implementation timescales that are
                   currently being determined and agreed as part of FAS Deployment.
                   Actual implementation timescales will likely change from those
                   assumed in this study, but the scenarios still give an indication of
                   how the net benefits would change with different implementation
                   timescales.

            5.15   Secondly, although the vision in the FAS is to enable fully systemised
                   CCOs, in reality the complexity of UK airspace, particularly in the London
                   Terminal Manoeuvring Area (LTMA), may mean this is not feasible for
                   all SIDs or for all times in the day. Therefore, it is acknowledged that
                   the figures in the CCO scenarios represent maximum benefits which
                   could be achieved. Sensitivity analysis has been conducted on the CCO
                   scenarios assumption of full continuous climbs, with analysis of the
                   benefits realised with an 80 per cent and 60 per cent achievement of
                   fully systemised CCOs where current performance levels are below
                   those levels. The results of this sensitivity analysis can be found in
                   Annex H.

            5.16   Finally, the CCO scenarios do not cover any changes to the length or
                   horizontal profiles of the SIDs which is very important to bear in mind.
                   It is envisaged that PBN capabilities will enable changes to SIDs other
                   than just vertical performance and therefore these scenarios are on
                   the conservative side from airspace redesigns with departure profile
                   changes. It is not possible to currently quantify potential benefits of
                   horizontal changes to departure profiles.

            5.17   Costs in the study have been assumed to arise from the baseline year in
                   2011 for both aircraft equipage and airspace redesigns and are assumed
                   to be evenly spread across during the implementation phases. It is
                   recognised that this may overestimate the net present value of the
                   costs through lower discounting of costs if in practice costs are not
                   incurred until a later date.

            Major airspace redesign programmes
            5.18   Major airspace redesign programmes are a cornerstone of the FAS
                   deployment and form one of NATS’ main contribution to the FAS.
                   The current airspace design does not effectively separate arrival and

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                   departure flows to individual airports onto dedicated routes. Interactions
                   between traffic flows create the need for tactical interventions that
                   interrupt CCOs as well as interrupting CDOs, increasing controller and
                   pilot workload and reducing airspace capacity.

            5.19   Currently many departures, mainly in the London terminal environment,
                   level off at between four and seven thousand feet in order avoid
                   incoming traffic not allowing for fully systemised CCOs. The London
                   Airspace Management Programme (LAMP) and the Northern Terminal
                   Control Area (NTCA) airspace redesigns, in conjunction with a change to
                   the Transition Altitude (TA) across the UK to 18,000 ft, aim to maximise
                   the achievement of CCOs.

            5.20   This study assumes that the TA, LAMP and NTCA major airspace
                   redesigns are implemented as required for each of the benefit
                   scenarios, and that other airspace redesigns are undertaken where
                   necessary to facilitate fully systemised CCOs at the airports included
                   in this study. The full costs of all initiatives included in this section have
                   been included.

            Coverage of costs and benefits
            5.21   The starting point for identifying airports to include in the study was UK
                   airports with annual commercial movements around or above 40,000 air
                   traffic movements (ATM) per year in order to capture the airports that
                   could be expected to derive the greatest benefits from CCOs.

            5.22    Airports from this group were then chosen based on the information
                   that was available to the CAA in order to appropriately compare baseline
                   and future scenarios and estimate the benefits from the change in
                   operation. Radar data was available for several airports and other
                   airports were judged to have relatively similar mixes of traffic and/or
                   movements. Table 1 lists the UK airports that have been included in this
                   report to generate the expected benefits.

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            Table 1 – Airports used in the study to calculate expected benefits and
            source of data

             Radar data                                   Estimated from radar data at proxy
                                                          airport
             Heathrow
             Gatwick
             Stansted                                     Luton
             Manchester
             London City
             Birmingham                                   Edinburgh

                                                          Glasgow

                                                          Liverpool

                                                          Newcastle

                                                          Bristol

            5.23        Stansted was chosen as a proxy for Luton airport as it was the most
                        similar London airport8. Birmingham airport was chosen as the proxy
                        airport for Edinburgh, Glasgow, Liverpool, Newcastle and Bristol airports
                        due to the relatively similar expected baseline CCO performance of the
                        airports9.

            5.24        Five airports were omitted from the study as they were deemed to have
                        traffic mixes that were unique and therefore did not fit close enough
                        with the radar data that was available10.

            5.25        Radar data covering a 92 day period over the summer 2011 was
                        used to estimate baseline data for Heathrow, Gatwick, Stansted and
                        Manchester airports. Data for London City airport was from the same

            8 It is acknowledged that Luton airport has a slightly different mix of commercial and business traffic;
               however it was deemed to be an appropriate approximation at the aggregate level of this study.
               Additionally Luton has lower movements per year and therefore the benefits have been adjusted to
               the proportionate level (67 per cent) of traffic compared to Stansted.
            9 It is recognised that Liverpool, Newcastle and Bristol airports annual ATM movements are almost
               half those at Birmingham and therefore overestimate the benefits at these airports. Therefore
               benefits figures at these airports have been computed at 50 per cent of Birmingham figures for
               2011.
            10 These airports included Aberdeen, East Midlands International, Belfast International, Belfast City
               and Southampton.

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                        92 day summer period, but from 2006 rather than 2011 due to data
                        accessibility. Birmingham airport radar data covered the full year in 2011.

            5.26        It was not deemed necessary to include all regional airports in the
                        study due to relatively high levels of current CCO performance at many
                        of these airports and therefore low expected benefits. The airports
                        included in this study represent 56 per cent of all UK aircraft movements
                        and 66 per cent of all UK commercial aircraft movement for 2011. Annex
                        C includes information on 2011 aircraft movements for the airports
                        included in this study.

            5.27        The data in this study is based on a baseline CCO performance level at
                        each of the airports, ranging from a high of 90 per cent at Birmingham
                        and Manchester airports to a low of 4 per cent at London City. This
                        means that whilst 90 per cent of flights in the sample period received
                        a CCO up to at least 18,000ft out of Birmingham and Manchester,
                        only 4 per cent of flights out of London City received a CCO up to at
                        least 18,000ft11. Annex D provides the full distributions of baseline
                        CCO performance across the sample periods at Heathrow, Gatwick,
                        Stansted, Manchester and Birmingham in 2011.

            5.28        In the development of the methodology and scope for this study the
                        issue of what baseline should be used for measuring current CCO
                        performance was questioned and particularly the use of baseline
                        data from 2011 where traffic levels were not as high as those seen
                        previously in UK airspace. The level of expected benefits is directly
                        correlated with and highly sensitive to baseline CCO performance levels;
                        higher air traffic levels could be associated with a lower base CCO
                        performance level and therefore the expected benefits from moving to
                        fully systemised CCOs could be greater than those estimated here. A
                        fully systemised CCO environment designed to cope with traffic growth
                        should remove or minimise the risk of not achieving the 100 per cent
                        achievement levels included in this report.

            5.29        Distributions of CCO performance over the same period in 2008, 2009,
                        2010 and 2011 at London Heathrow were examined and showed that
                        baseline CCO performance was indeed lower in 2008 at 33 per cent
                        (compared to 40 per cent in 2009, 2010, and 2011) with the higher

            11 Baseline performance data is based on 2011 data except for London City airport which is based on
               a sample from 2006. It is possible that part of the low performance for London City airport is due to
               the fact that the sample was taken from a year with higher traffic levels; however London City SIDs
               are constrained by arrivals into and out of London Heathrow and therefore it is not unreasonable to
               assume that this level of performance is a regular occurrence.

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                    traffic levels. However, CCO performance has been stable over the last
                    three years and UK traffic levels are predicted to recover slowly from
                    the recent economic downturn, therefore 2011 has been deemed an
                    appropriate year for baseline CCO performance in this study.

            5.30    It should be noted that there was no objection to the use of 2011 for
                    baseline CCO performance in the interim report; however it is still
                    recognised that if CCO baseline performance levels were to decrease
                    from the 2011 levels the benefits of implementing CCOs in the UK
                    would be greater than those included in this report.

            5.31    Major airspace change programmes, such as LAMP or NTCA, will
                    cover multiple airports including those within and outside of this
                    study. Therefore the costs of the major airspace change programmes
                    are spread across a wider set of stakeholders than those generating
                    the expected benefits included in this report. The full cost of these
                    programmes has been included as it is not possible to ascertain the
                    specific cost of these programmes to each of the airport locations
                    included in this study.

            5.32     Additionally, stakeholders transiting through a designated PBN airspace
                    volume may also require PBN capability. This extends the number of
                    airspace users required to equip with the necessary PBN capability in
                    order to achieve the expected benefits at the airports included in this
                    study. The costs in this study attempt capture these users as best as
                    possible based on current information in section 8.

            5.33    Therefore the coverage of benefits and costs across stakeholders is not
                    perfectly aligned with the expected benefits capturing a smaller subset
                    of stakeholders compared to the expected costs. However, it was
                    deemed more important to capture the costs imposed on other airspace
                    users even if the benefits they would achieve were too small or not
                    able to be measured in a comparable way to the airports included in this
                    study.

            Transition Altitude (TA)
            5.34    In order to achieve the aims of both the LAMP and NTCA programmes
                    a change to the TA level across the UK is needed. TA is the altitude at or
                    below which the vertical position of an aircraft is normally controlled by
                    reference to altitude. The TA at most major airports in the UK is 6,000
                    ft and in the Manchester Terminal Manoeuvring Area (TMA) area it is
                    5,000ft. At most minor aerodromes and for most uncontrolled airspace
                    the TA is 3,000 ft. In Ireland the TA for major airports is 5,000 ft. The

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                   current situation is therefore confusing and has the potential to result in
                   altimeter setting errors. For those aircraft that climb quickly the problem
                   is exacerbated by creating a high workload for a relatively low TA and
                   has the potential for continuing safety implications if not resolved.

            5.35   The CAA published a consultation document in January 2012 related
                   to the policy to raise and harmonise the TA both inside and outside
                   controlled airspace (CAS) in the London and Scottish Flight Information
                   Regions (FIRs) at 18,000 ft. With due regard to feedback from the first
                   consultation and further discussions and work on the issues around the
                   TA, a second CAA consultation will likely be conducted in Spring 2014 at
                   the earliest.

            LAMP
            5.36   The LAMP programme considers a fundamental redesign of the
                   terminal airspace at a network level, above circa 4,000 ft and will
                   improve the route network and remove stack holding in normal
                   operations freeing up valuable airspace capacity. More precise,
                   systemised, departure and arrival procedures will be implemented to
                   capitalise on the available airspace thereby enabling the systemised
                   CCOs required to realise the expected benefits in this study.

            5.37   The LAMP programme includes Heathrow, Gatwick, Stansted, Luton,
                   London City and Birmingham airports.

            NTCA
            5.38   In the NTCA environment traffic levels are lower and there is more
                   spare capacity, which enables a higher tactical CCO performance level
                   currently. Nevertheless the redesign of NTCA route network presents
                   similar opportunities to systemise CCOs and achieve the expected
                   benefits estimated as part of this study. A NTCA redesign would include
                   Manchester and Liverpool airports.

            Other airspace redesign costs
            5.39   Airspace redesigns at Edinburgh, Glasgow, Bristol and Newcastle
                   airports would not be included in the LAMP or NTCA redesign
                   programmes, and therefore this study assumes that the necessary
                   airspace changes would be implemented at these airports to facilitate
                   fully systemised CCOs.

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            Aircraft categories
            5.40        Given the variation in fuel consumption between types of aircraft,
                        the analysis was broken down into aircraft categories. The benefits
                        assessment included in this final report is based on the following aircraft
                        categories:

                        ƒƒRegional jet (CRJ900)

                        ƒƒSingle aisle (A319, A320, A321, B72212, B738, B752, MD83)

                        ƒƒTwin aisle 2-engine (A333, B762, B763, B772, B773, DC10)

                        ƒƒTwin aisle 4-engine (A343, A346, A380, B744)

            5.41        It is accepted that significant advances have been made recently in
                        aircraft fuel and emission performance and therefore future fuel and
                        emission savings may be lower than those calculated in this report;
                        however, there is also a counter effect from increased fuel burn and
                        emission associated with up scaling fleets to larger planes.13

            5.42        Overall DfT forecasts indicate that there is likely to be an increase
                        in fuel burn and CO2 emissions even with the changes to fleet mix
                        and efficiency improvements. However, given the complexity of the
                        interaction of these two factors and uncertainty in the trends for both
                        replacement and up scaling of aircraft fleets at each of the individual
                        airports, is has been decided that the mix of aircraft has been assumed
                        to remain constant for the purpose of this report.

            5.43        Sensitivity analysis has not been conducted on the impact of changes
                        in aircraft fleet mix due to the complexity in forecasting which aircraft
                        types will increase and decrease and by how much.

            12 A comment was received following the interim report on the use of the B722 as an aircraft
               category in the modelling due to its scarcity in UK aircraft fleet. The modelling reflects the number
               of the different aircraft types in operation and therefore only a very small level of benefit are
               associated with this aircraft in this study, but it was included to represent this type of aircraft for
               completeness.
            13 Sustainable Aviation have produced a discussion paper which includes the role of aircraft
               design in reducing environmental impact from aviation and the interaction between designs
               for fuel efficiency and other environment factors. Sustainable Aviation (September 2010)
               Interdependencies between emission of CO2,NOX & Noise; Policy Discussion Paper http://www.
               sustainableaviation.co.uk/wp-content/uploads/sa-inter-dependencies-sep-2010.pdf

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            Calculating flight efficiency and CO2 savings
            5.44       The primary quantifiable benefits from CCOs have been identified as
                       flight efficiency benefits (fuel and time savings) and the associated
                       environmental benefits from more efficient flight plans (CO2and noise).

            5.45       The calculation of the difference in fuel burn was evaluated based on
                       ICAO guidance on ensuring a common measurement point14. Fuel burn
                       comparisons can only be evaluated once the aircraft on a stepped climb
                       and the aircraft on a continuous climb have reached a common point,
                       and beyond that everything else is the same. After departure the first
                       common point (in terms of speed, height and distance) is an adjusted
                       top of climb, which ICAO refer to as ‘Point X’ and is depicted in figure 2
                       below.

            Figure 2 – ICAO recommended adjusted top of climb (Point X) comparison
            measurement15

            14 ICAO (2008) ICAO Circular 317: Effects of PAN-OPS Noise Abatement Departure Procedures on
               Nose and Gaseous Emissions.
            15 ICAO (2008) ICAO Circular 317: Effects of PAN-OPS Noise Abatement Departure Procedures on
               Nose and Gaseous Emissions; Figure 4.1.

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            5.46       The fuel, CO2 and time savings benefits were then calculated by the
                       CAA’s ERCD from baseline radar data using the BADA 3.9 model16.
                       BADA 3.9 is a theoretical model to estimate fuel burn and therefore may
                       not be as accurate as the manufacturers’ models, but it was chosen for
                       this study as the most consistent method for estimating the benefits
                       across the many different types of aircraft operating at UK airports.

            5.47       The benefits from CCOs have been calculated for each aircraft type
                       by taking the difference in flight efficiency between the baseline
                       performance level and that which has been estimated using the BADA
                       3.9 model under a fully systemised CCO for each aircraft type. This
                       saving has then been extrapolated across the increase in the number
                       of CCOs that would be expected again for each aircraft type based on
                       the existing aircraft fleet mix. The fuel, time and CO2 savings for each
                       aircraft type have then been aggregated according to the total number
                       of departures to generate a 2011 baseline saving. This saving is the
                       extrapolated into future years using the assumptions detailed in the rest
                       of this section. Annex F includes a breakdown of these calculations for
                       Heathrow to illustrate how the expected benefits have been derived.

            5.48       It is important to note that the fuel savings calculations do not include
                       additional fuel efficiency savings that aircraft operators would make
                       from uploading less fuel than they would have previously. Aircraft
                       operators are required to carry fuel to cover the entire flight plan, plus
                       contingency, and if they are able to plan for systemised CCOs they
                       may be able to lower the amount of fuel they uplift to the aircraft. This
                       reduces the weight of the aircraft, which in turn reduces fuel burn.

            5.49       Data from industry workshops held in May 2012 was used to compare
                       industry estimates to the modelling used in this study. Any differences
                       were generally found to be down to differences in the approach taken
                       to calculate the benefit or due to data being estimated directly from the
                       manufacturer’s modelling rather than the theoretical model used in this
                       report. It was found that the manufacturer’s models tended to produce
                       higher expected benefits than those estimated using the BADA 3.9
                       model in this study and therefore this study potentially reflects a more
                       conservative picture of potential fuel burn and time savings.

            16 http://www.eurocontrol.int/eec/public/standard_page/proj_BADA_documents_39.html (last
               accessed 29 August 2012)

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            Air Traffic Demand
            5.50       The expected benefits are based on 2011 traffic levels with assumptions
                       made about growth in air traffic demand. The demand predictions are
                       based on the central forecast from the Department for Transport ‘s
                       (DfT) UK Aviation Forecasts 201117 and include the predictions in table
                       2 relevant to the period and airports under examination in this report.
                       Sensitivity of traffic levels has been undertaken and the results are
                       included in Annex H.

            5.51       Since the work was undertaken to calculate the benefits in this study,
                       the DfT has published an update to its UK Aviation Forecasts18 in
                       January 2013. The central forecasts of passenger numbers in the 2013
                       report have been reduced by around seven percent from the levels
                       assumed in this report, which were forecast by the DfT in 2011. The
                       major South East airports are still forecast to be fully by 2030 (could be
                       as early as 2025 or as late as 2040) and Heathrow airport in particular
                       is forecast to remain full across all the demand cases as in the 2011
                       forecasts.

            5.52       The expected benefits in this report have not been updated to reflect
                       the 2013 forecasts. This is due to the fact that sensitivity analysis
                       based on 2011 forecasts indicated the expected benefits were not very
                       sensitive to changes in traffic forecasts; however it is recognised that
                       where 2013 forecasts are lower at airports included in this study, there
                       could be a small overestimation in the expected benefits included in this
                       report.

            17 Department for Transport (August 2011) UK Aviation Forecasts 2011; http://assets.dft.gov.uk/
               publications/uk-aviation-forecasts-2011/uk-aviation-forecasts.pdf (last accessed 20 August 2012)
            18 Department for Transport (January 2013) UK Aviation Forecasts 2013; https://www.gov.uk/
               government/uploads/system/uploads/attachment_data/file/183931/aviation-forecasts.pdf (last
               accessed 11 April 2013)

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            Table 2 –DfT ATM Forecasts (000s) at UK airports (central forecast) 19

             Airport                               2010              2030        Average annual growth
                                                                                             2011-2020
             Heathrow                                450              480                                0.3%
             Gatwick                                 230              260                                0.7%
             Manchester                              150              280                                4.3%
             Stansted                                140              260                                4.3%
             Birmingham                               85               210                                7.4%
             Glasgow                                  70                75                               0.4%
             Luton                                    75              130                                3.7%
             Edinburgh                               100              190                                4.5%
             Newcastle                                50                55                               0.5%
             Liverpool John                           45                55                                1.1%
             Lennon
             London City                              65              120                                4.2%
             Bristol                                  55                85                               2.7%

            Airport Capacity
            5.53       This study assumes that no new runway capacity is available in the UK
                       in the period covered to 2030, but that airports continue to develop
                       to maximum use of their current potential runway capacities. This
                       is consistent with the modelling assumptions used by the DfT in
                       developing their UK Aviation Forecasts described above.

            5.54       The complexity of UK airspace, particularly in the South East of England,
                       means that changes to airport capacity or throughput may have an
                       impact on the ability to offer CCOs in some parts of the airspace.
                       Therefore, if there were to be significant change in airport capacity in
                       the South East of England, the benefits included in this report may need
                       to be reassessed.

            19 Department for Transport (August 2011) UK Aviation Forecasts 2011; table H.3, page 160, central
               forecast.

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CAP 1062                                                                                     Section 5: CCO Assumptions

            Fuel prices
            5.55       Fuel prices have been based on the 2011 average jet fuel prices
                       handled by IATA €710 per tonne or £618 per tonne as recommended by
                       Eurocontrol20. Fuel price inflation is covered in section 5.13.

            Passenger time
            5.56       As described by Eurocontrol the passenger value of time is an
                       opportunity cost, which corresponds to the monetary value associated
                       with a traveller (passenger) during a journey. It is essentially, how much
                       a traveller would be willing to pay in order to save time during a journey
                       (e.g. by travelling on a quicker service or a faster mode), or how much
                       ‘compensation’ they would accept, directly or indirectly, for ‘lost time’.

            5.57       The value of passenger time savings from fully systemised CCOs
                       has been estimated using the Eurocontrol recommended value for
                       passenger opportunity cost of €43.8 per minute or £38.01 per minute21.

            5.58       It is recognised that there has been significant discussion about the use
                       of passenger time savings for small increments of time, and whether
                       or not they should be valued at lower rates than larger increments. It is
                       argued that there is greater difficulty in making effective use of smaller
                       increments of time savings, particularly when unanticipated. However,
                       as supported by the FAA the theoretical and empirical knowledge does
                       not appear to support valuing small increments of time less than larger
                       ones. Therefore, even though the average times savings per flight from
                       fully systemised CCOs are smaller increments it is felt to be appropriate
                       to capture this value to passengers.

            Delay cost savings
            5.59       The value of time to aircraft operators resulting from fully systemised
                       CCOs has been estimated based on the Eurocontrol recommended
                       value for delay costs22. The savings has been approximated based on

            20 EUROCONTROL (Feb 2012) Standard Inputs for EUROCONTROL Cost Benefit Analyses.
            21 EUROCONTROL (Feb 2012) Standard Inputs for EUROCONTROL Cost Benefit Analyses. http://
               www.eurocontrol.int/documents/standard-inputs-eurocontrol-cost-benefit-analyses
               Based on base scenario value for passenger opportunity cost of €43.8 per minute and converted to
               £ based on EUROCONTROL exchange rate conversion for 2011 of £1.152475.
            22 EUROCONTROL (Feb 2012) Standard Inputs for EUROCONTROL Cost Benefit Analyses. http://
               www.eurocontrol.int/documents/standard-inputs-eurocontrol-cost-benefit-analyses

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                       the strategic delay figure for the airborne stage of flight figure minus
                       the fuel costs estimate savings as this has been calculated separately.
                       Although the airborne delay cost is technically considered to exclude the
                       climb phase the values have been considered as an appropriate proxy
                       for the savings.

            5.60       The figure used for 2011 was €31.1 per minute or £26.99 per minute23.

            Carbon prices
            5.61       Carbon prices has been estimated based on the Department for
                       Environment and Climate Change (DECC)’s central carbon value for the
                       traded sector24.

            5.62       DECC has updated the carbon prices for traded sectors following the
                       modelling undertaken to calculate the estimated benefits included in
                       this report, which has reduced the value of the short term traded carbon
                       prices most significantly in the early years of this study with the values
                       in the later years returning to the level of the estimates included in this
                       study.

            5.63       It is acknowledged that this results in an overestimation of the benefits
                       from carbon savings in this study; however as carbon savings make up
                       approximately two per cent of the total estimated benefits it was not
                       deemed necessary to update the figures included in this report at this
                       time.

            Price levels
            5.64       The figures in the final report are based on constant 2011 prices,
                       and therefore no assumptions have been made about general price
                       increases in the future.

            5.65       However, fuel prices have been relatively volatile in recent years and
                       jet fuel prices are forecast to increase on average by a real 2.4 per cent
                       per year from 2010 to 2035 according to the Annual Energy Outlook

            23 Based on the EUROCONTROL recommend value for delay costs for the Base Scenario for a
               Strategic Airborne delay, minus the fuel costs, of €31.1 per minute and converted to £ based on
               EUROCONTROL exchange rate conversion for 2011 of £1.152475 (£26.99).
            24 Based on £13 for central carbon value for traded sector for 2011 in 2011 prices. DECC (October
               2011) A brief guide to the carbon valuation methodology for UK policy appraisal. http://www.decc.
               gov.uk/en/content/cms/emissions/valuation/valuation.aspx#

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CAP 1062                                                                                 Section 5: CCO Assumptions

                       2012 published by the U.S Energy Information Administration25. Real
                       fuel prices increases of 2.4 per cent per year have been included in this
                       study.

            5.66       Sensitivity analysis for real fuel price inflation has been undertaken in
                       Annex H.

            Discount rate
            5.67       The annual rate used to discount the stream of future costs and benefits
                       in this study was four per cent as recommended by Eurocontrol for
                       ATM investments26. This discount rate includes adjustments for a basic
                       risk free time value of money and a risk premium, and is inflation free.
                       This is also the rate recommended by the European Commission in
                       its impact assessment guidance and is used by the European Aviation
                       Safety Agency (EASA) for impact assessments.

            5.68       The UK Green Book guidance for appraisal and evaluation in Central
                       Government recommends using the Social Time Preference Rate
                       (STPR) of 3.5 per cent as the standard real discount rate27. The STPR is
                       defined as the value society attaches to present, as opposed to future,
                       consumption. Sensitivity analysis on the use of the UK recommended
                       rate of 3.5 percent compared to the Eurocontrol recommended rate of 4
                       per cent has been conducted and is included in Annex H.

            5.69       The benefits in this report are calculated out to 2030, which aligns to
                       the period of the FAS. It is recognised that this broadly in line with the
                       expected lifecycles of the major investments required to enable CCOs in
                       the wider context of a desire to move to user defined trajectory based
                       flight operations in the future.

            25 U.S Energy Information Administration (June 2012) Annual Energy Outlook 2012 http://
               www.eia.gov/oiaf/aeo/tablebrowser/#release=AEO2012&subject=3-AEO2012&table=12-
               AEO2012&region=0-0&cases=ref2012-d020112c (last accessed 17 August 2012)
            26 EUROCONTROL (Feb 2012) Standard Inputs for EUROCONTROL Cost Benefit Analyses.
            27 HM Treasury (2003) The Green Book: Appraisal and Evaluation in Central Government

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