Waiver granted; further information requested; drawn to the attention of the Transport Committee
Court of Auditors: Special report No 18/2017: Single European Sky: a changed culture but not a single sky
5.1The European Court of Auditors has issued a report following a review of whether the EU Single European Sky (SES) air traffic management initiative is meeting its objectives. Given the UK’s impending departure from the EU, the Committee has chosen to use this chapter as an opportunity to consider the implications of EU exit for air traffic management.
5.2Single European Sky (SES) is an EU programme to improve the efficiency of European air traffic management (ATM) and air navigation services to cope with traffic growth in a safe and cost efficient manner. SES comprises a set of regulations which establish a number of tools and cooperative arrangements to drive improvements in this area, as well as a project to develop and deploy new operating concepts and technology called SESAR (the Single European Sky Air Traffic Management Research project).
5.3Published on 30 November 2017, the Court of Auditors’ Report, “Single European Sky: a changed culture but not a single sky”, found that the SES initiative was justified because European ATM was hindered by national monopolies and fragmentation. Although it found that the SES had fostered a culture of efficiency and transparency, it concluded that the results had not met original expectations, and provides a number of recommendations to enable it to do so in future.
5.4On 18 December 2017 the Parliamentary Under Secretary of State at the Department for Transport (Baroness Sugg) submitted an Explanatory Memorandum to Parliament in which she outlined the Government’s position in relation to the report. The Minister states that the Government welcomes the report, that the actions identified in it do not include any proposals for new EU legislation, and that there are no immediate actions required of the UK. She responds to a number of individual points raised by the report and briefly addresses the implications of EU exit for UK air traffic management.
5.5We thank the Minister for her Explanatory Memorandum concerning the Court of Auditors’ report on the Single European Sky. Regarding EU exit, we note the Government’s comments that:
5.6We conclude that the Single European Sky (SES) regime will cease upon withdrawal to apply to the UK, and that subsequent UK-EU arrangements will be subject to negotiation. Although the UK could unilaterally retain some aspects of SES rules in UK law through the EU (Withdrawal) Bill, many SES provisions are cross-border and reciprocal in character, and will therefore no longer function outside the Union.
5.7We note that European third countries that conclude agreements with the EU can participate in the SES airspace and regulatory regime, and that participation has been extended to signatories of the European Common Aviation Area Agreement (ECAA); however, these countries apply the EU aviation acquis as well as a wide range of associated environmental, social and consumer protection rules. Participation also entails accepting the indirect jurisdiction of the Court of Justice of the European Union (CJEU).
5.8Implications for UK air traffic management of an exit from the SES include: the need to renegotiate on a bilateral basis ATM arrangements with the EU (including charging arrangements); the effects of a likely reduction over time in the interoperability between UK and EU ATMS, as the UK becomes less involved in the development of the EU system; the loss of EU funding relating to ATM initiatives; and the cost to the UK of developing its own ATM technological research programme. While these issues pose policy challenges, we consider them less critical than other challenges facing the sector, such as traffic rights, participation in the European Aviation Safety Agency (EASA), and other arrangements affecting trade in goods. In the context of the Article 50 negotiations, we note that it is unclear to what extent these issues can be disaggregated, and that the European Commission’s slides on aviation suggest that it may treat them as a package.
5.9To enable us to conclude our scrutiny of the implications of EU exit for air traffic management, we ask the Government to respond to the following questions:
5.10We grant the Government a waiver to agree Council conclusions which might recommend legislative action, provided that they are in line with the recommendations of the CoA report and the Government’s reflections thereon as provided in its Explanatory Memorandum. We ask the Government to respond to the above questions by March 28 2018. In the meantime, we retain the proposal under scrutiny, and draw it to the attention of the House of Commons Transport Select Committee.
Court of Auditors: Special report No 18/2017: Single European Sky: a changed culture but not a single sky: (39300), Unnumbered.
5.11Air traffic management is needed to ensure safe and efficient air transport in a context of growing air traffic using a limited volume of airspace. It consists of three primary activities:
5.12Air carriers are charged for the air traffic management services they receive on the basis of the type of aircraft and the distance flown within the area of responsibility of each air navigation service provider (ANSP), according to the planned trajectory, paying a European average of around 900 euro per flight.
5.13Air traffic management has traditionally been developed and provided at a national level by air navigation service providers (ANSPs). NATS is the UK’s air navigation service provider (ANSP) providing air traffic control services handling 2.4 million flights and 250 million passengers in UK airspace each year. NATS is a public private partnership between the Airline Group, NATS staff, UK airport operator LHR Airports Limited, and the Government. It is regulated by the CAA under a licence covering en-route services and services provided in a portion of the North Atlantic. Many elements of its economic and safety regulation are governed currently by EU regulations set under the Single European Sky legislative framework.
5.14Because European airspace was organised along national lines and managed by national ANSPs, this meant that each ANSP operated used its own procedures and support equipment, which limited interoperability and economies of scale. This led to delays, uneconomical flight trajectories and unreasonable air-traffic control costs.
5.15In response, the EU adopted in 2004 the first SES legislative package, which was revised and extended in 2009 in the “SES II” package. SES consists of a regulatory framework coupled with a technological modernization programme, as well as financial support to SESAR. The SES area includes all 28 Member States of the European Union and extends also to Switzerland and Norway.
5.16The key objectives of the SES legislative framework are:
5.17Key strands of the SES regime include:
5.18EASA and the European Commission develop SES rules.
5.19The Single European Sky Regulations contain a number of third country provisions. Article 7 (Relations with European third countries) of Regulation 549/2004, states that:
“The Community and its Member States shall aim at and support the extension of the single European sky to countries which are not members of the European Union. To that end, they shall endeavour, either in the framework of agreements concluded with neighbouring third countries or in the context of agreements on functional airspace blocks, to extend the application of this Regulation, and of the measures referred to in Article 3, to those countries.”
5.20Article 9a (Functional Airspace Blocks) states that, “Where relevant, cooperation may also include third countries taking part in functional airspace blocks.”
5.21In December 2005, the EU concluded an agreement on the European Common Aviation Area (ECAA), which extended the aviation acquis, including the SES, to Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, Kosovo under UNSCR 1244, Norway and Iceland.
5.22Article 13 of the ECAA Agreement provides that the contracting parties shall cooperate in the field of air traffic management with a view to extending the Single European Sky to the ECAA. To facilitate the application of the SES acquis in their territories, the Associated Parties must adjust their ATM institutional structures to the SES. The Union undertakes to associate the Associated Parties with any operational initiative in the fields of air navigation services, airspace and interoperability that stem from the SES, in particular through an early involvement of the relevant Contracting Parties’ efforts to establish FABs.
5.23One of the principles of the ECAA Agreement is that full compliance with the ECAA rules—which are based on the EU aviation acquis, set out in Annexes to the Agreement–is required for the Contracting Parties to enjoy the benefits of the ECAA, including market access. Annex 1 requires conformity not only with the EU aviation rules, but also a wide range of associated EU legislation, including environmental, social, consumer protection and other rules.
5.24Eurocontrol, the European organisation for the safety of air navigation, is an inter-governmental organisation set up by its Member States to facilitate collaboration and ensure safe and seamless ATM across Europe. It currently has 41 member states, including non-EU States such as Turkey and the Ukraine. Eurocontrol provides the operational co-ordination of the European air traffic system, technical expertise and legislative assistance to the Commission, industry and Eurocontrol member states. Operationally, Eurocontrol ensures that air traffic is planned daily against available airspace capacity. It works to minimise delays in the event of crisis situations or strikes. The UK is a signatory to the Eurocontrol convention in its own right, independent of its membership of the EU.
5.25Although it is not an EU agency, the EU has designated Eurocontrol to carry out certain functions under the SES legislative framework, for example: administering regulations; assisting the Commission’s work in the Performance Review Body. In 2011 the Commission designated Eurocontrol the Network Manager for all European airspace. This involves tasks including airspace design and flow management.
5.26Eurocontrol also runs the Central Route Charges Office (CRCO), through which airspace users pay for the air traffic services they use. The CRCO calculates the route charges due to the Member States for the services provided, bills the airspace users and distributes the route charges to the States concerned.
5.27The Court of Auditors’ report, “Single European Sky: a changed culture but not a single sky”, finds that:
5.28The report recommends that the Commission should:
5.29In its response, provided at the end of the report, the Commission accepts all of the recommendations and explains how it intends to act on them.
5.30The Parliamentary Under Secretary of State at the Department for Transport (Baroness Sugg) states that the Government welcomes the report and notes that the actions identified in it do not include any proposals for new EU legislation and that there are no immediate actions required of the UK. She also notes that many of the recommendations in the report would be addressed by the proposal to amend the basic SES legislation (SES II+), which has been stalled since 2014 following the dispute between Spain and UK over Gibraltar.
5.31Regarding the implications of EU exit for UK air traffic management, the Minister states that the UK’s future relationship with the EU SES programme is a matter for exit negotiations with the EU. She also notes that:
5.32In conclusion, the Minister states that the Government is supportive of the Report and that the Commission response is both proportionate and appropriate. However, she does state that the Report will put pressure on unblocking the EU’s proposed SES II+ legislation. The Minister states that the Government will take this into account as part of the UK’s forthcoming negotiations with the EU on its future relationship, whilst protecting the interests of the UK and Gibraltar.
40 European Court of Auditors, Special report No 18/2017: Single European Sky: a changed culture but not a single sky ().
41 European Court of Auditors, Special report No 18/2017: Single European Sky: a changed culture but not a single sky ().
42 Explanatory Memorandum from the Minister, DFT ().
43 Official Journal L 285 () p. 3–46, Multilateral Agreement between the European Community and its Member States, the Republic of Albania, Bosnia and Herzegovina, the Republic of Bulgaria, the Republic of Croatia, the former Yugoslav Republic of Macedonia, the Republic of Iceland, the Republic of Montenegro, the Kingdom of Norway, Romania, the Republic of Serbia and the United Nations Interim Administration Mission in Kosovo on the establishment of a European Common Aviation Area.
44 Taskforce 50, Internal EU27 preparatory discussions on the framework for the future relationship: “Aviation” ().
45 NATS Limited, . The company’s for the year ended 31 March 2017 state that, according to an evaluation at 31 December 2015, the company’s defined benefit pension scheme reported a funding deficit of £458.7m, an increase of £76.1m from a 2012 valuation.
46 We note that NATS receives funding for its national SESAR programme through the Connecting Europe Facility, and has applied for EU funding to develop Borealis FreeRoute Airspace, as reported in AirTrafficManagement.net, Brexit fallout for Single Sky remains unclear ().
47 The applies, inter alia, to any “agreement to a programme, plan or recommendation for European Community legislation”. While Council conclusions regarding Court of Auditors’ reports do not always meet this threshold, some of the recommendations in the Court of Auditors’ report could be addressed by legislative means, in which case the scrutiny reserve would apply; hence our decision to waive the scrutiny reserve.
48 See NATS website:
49 The SES legislative framework consists of four Basic Regulations (549/2004, 550/2004, 551/2004 and 552/2004) covering the provision of air navigation services (ANS), the organisation and use of airspace and the interoperability of the European Air traffic management Network (EATMN). These were amended by Regulation 1070/2009 (SES II). The consolidated text of the four Regulations, as subsequently amended, is available .
50 European Commission, Performance and Charging Schemes (accessed ).
51 Commission Implementing Decision 2014/132 setting the Union-wide performance targets for the air traffic management network and alert thresholds for the second reference period 2015–19 ().
52 European Commission, SES I and II consolidated text: The 4 Regulations creating the Single European Sky, Article 7 of Regulation 549/2004 ().
53 Official Journal L 285 () pp. 3–46, Multilateral Agreement between the European Community and its Member States, the Republic of Albania, Bosnia and Herzegovina, the Republic of Bulgaria, the Republic of Croatia, the former Yugoslav Republic of Macedonia, the Republic of Iceland, the Republic of Montenegro, the Kingdom of Norway, Romania, the Republic of Serbia and the United Nations Interim Administration Mission in Kosovo on the establishment of a European Common Aviation Area.
54 European Court of Auditors, Special report No 18/2017: Single European Sky: a changed culture but not a single sky ().
55 Explanatory Memorandum from the Minister, DFT ().
5 March 2018