COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on the implementation of the Single European Sky

(Presented by the Commission)

1. Introduction

Document COM (2001)123 setting out an Action Programme on the creation of the Single European Sky defines the objectives and the working methods for the reform of air traffic management in Europe. This document puts forward the proposals on the specific areas of the action programme.

These proposals translate, as appropriate, into Community law the conclusions of the High-Level Group on the creation of the Single Sky, thereby allowing a more integrated and efficient approach towards the implementation of the Single Sky in the line with the approach followed for the completion of the single market and for the Euro.

Their aim is to provide a clear role for air traffic management within the social and economic development of the European Community, thereby departing from its existing fragmented and non-transparent functioning. Various actors involved in air traffic management need account to airspace users and air passengers for their actions. The clarifications of their roles and responsibilities will improve safety and efficiency.

The recent tragic events in the United States of America risks to seriously impact on the smooth development of air transport. A slow down or even a decrease in air traffic might initially alleviate the situation of chronic congestion and delay in Europe. But these facts do not diminish but rather reinforce the need for a Single European Sky. The prospects of a crisis in the aviation industry results in additional pressure on other related sectors, such as traffic management, to reduce their cost and improve efficiency.

The creation of the Single Sky also facilitates security management in particular during the operation of flights. The harmonisation and integration process leads to a tighter co-ordination between air navigation service providers and other operators, including military. Changes to orderly and regular traffic flows resulting from unexpected events or security measures can be anticipated and managed in a more effective way.

In the light of previous considerations, the following proposals provide credible means to achieve safety, capacity, efficiency and even security gains that are consistent with the growth expectations of the European Community.

2. Proposal for a regulation of the European Parliament and of the Council on the provision of Air Navigation Services in the Single European Sky

2.1. The Community must set up a regulatory framework meeting users' needs as fully as possible. The Community framework must ensure the same obligations and offer the same opportunities to all air navigation service providers. It must address relations between service providers and the regulator (transparency and supervision), between the various service providers (co-operation), between these service providers and airspace users (consultation) and between service providers and other operators, including the military (co-ordination). It consists of the application of three concepts: a system of authorisation for the provision of air navigation services, which enables the application of the rules laid down under Community law; a compliance review mechanism for supervising and enforcing such rules by the Member States authorities; arrangements and procedures for payment of air navigation services.

2.2. Whilst the development of the regulatory activities will be at Community level, there should be an effective compliance review mechanism, in particular to supervise the activities of service providers. The legislative proposal leaves compliance review primarily to national authorities. To this end, Member States will have to designate supervisory authorities. However, the measures proposed also ensure that the Community has enforcement ability to deal with cases of European significance and to supervise the conduct of compliance review and enforcement at national level. Member States, regulators, ministries of transport or civil aviation authorities should, on their own initiative or upon application by interested parties, review compliance of air navigation service providers with Community rules and take appropriate enforcement action, if necessary. The Community legislation will establish a link between domestic compliance review and enforcement and review processes at European level.

2.3. The exercise of powers by Member States requires that the supervisory function is separated from the operational function, in order to ensure that there are no conflicts of interest. No organisation providing a service must be responsible for such a supervisory function, either of itself or of any other body providing services. This regulation proposes as a minimum requirement the functional separation of supervision and operations, i.e. the bodies responsible for supervision and operations should be at least separated and distinct from each other at functional level. However, when reporting on the impact of the Single Sky initiative five years after its entry into force, the Commission will assess whether this approach to separation is still appropriate.

2.4. Review of compliance requires adequate inspection regimes to ensure that safety will not be compromised, rights and obligations of service providers are satisfactorily met and requirements for service provision are complied with. Primary responsibility for carrying out such inspections lies with Member States and their competent administrations, that is the supervisory authorities. When Member States have no sufficient resources and skills to discharge this role, they may rely upon specialised private and public organisations with extensive experience in the safety, financial and quality sectors. For this purpose, the legislation proposes to create a network of recognised organisations able to inspect and monitor service providers. Appropriate standards will have to be decided upon to qualify these organisations who carry out the inspections and surveys in question on behalf of Member States. It will also be important that the same standards are maintained throughout the Community and that there are no variations between performances of recognised organisations so that supervisory authorities can refer to any of such organisations located in the Community. Service providers will then be assessed on an equal footing therefore ensuring their services are of equally high levels of quality, which is a prerequisite for their acceptance from all Member States.

2.5. All legislative proposals have a strong link to safety issues. Safety is one imperative which must be maintained and reinforced in the regulatory approach put into place. All the measures proposed hereinafter take account of this absolute constraint to sustaining and fortifying safety standards. The safety issue is addressed at three distinct levels: the definition of safety requirements; the assessment of the proper implementation of such requirements and the exercise of the necessary preventive and corrective function on the basis of the safety performance of service providers, including the implementation of safety nets.

2.6. With regard to the definition of safety requirements, ultimately the Commission will have to consider how to involve the European Aviation Safety Agency (EASA) in the safety aspects of air traffic management. For the time being the Commission proposes to implement safety measures based on the EUROCONTROL Safety Regulatory Requirements (ESARRs) drawn up by the SRC [1], where they are suitable to support binding regulations.

[1] At the moment these regulatory requirements can, in theory, be incorporated into Community law under Council Directive 93/65/EEC of 19 July 1993 on the definition and use of compatible technical specifications for the procurement of air-traffic-management equipment and systems; however, since the objective of this Directive is to lay down the conditions for calls for tender for equipment procurement, the actual possibility of incorporating ESARRs into Community law is limited to safety requirements regarding equipment and systems.

2.7. In air traffic management, there is no such system of inspection, certification and surveillance of operations, as in aviation. The continued process of corporatisation of service providers and their increasing autonomy calls for a revised approach for Member States to discharge their responsibility for the safe and efficient conduct of air navigation services. The Commission proposes to establish a system for both initial authorisation and the continued surveillance of the service providers to ensure that the required standards of operation are maintained. Like in the case of issuance of Aircraft Operator Certificates (AOC), the granting of authorisations gives the Community and Member States the capability of ensuring the protection of public interest. It will also allow for the exercising of indirect influence and control upon the provision of services without encroaching upon the direct responsibility of service providers for their safety. This approach will support implementation of the safety regulations by the Community and Member States and establish a framework guaranteeing that the scenarios for releasing extra capacity meet the safety requirements.

2.8. To allow preventive and corrective actions, it is necessary to dispose of suitable information on safety. The Commission will propose to establish a mandatory, harmonised occurrence-reporting system for service providers [2]. It will be based on a non-punitive system for reporting by air traffic controllers. This system will be part of the system of authorisation described in the following paragraph 2.12. It will be subject to the relevant Community provisions on confidentiality and the protection of personal data.

[2] Requirements for such a system will be based on the provisions of Council Directive 94/56/EC of 21 November 1994 establishing the fundamental principles governing the investigation of civil aviation accidents and incidents and the EUROCONTROL Safety Regulatory Requirements on reporting and assessment of safety occurrences in air traffic management (ESARR 2).

2.9. Finally, the Commission proposes that the strengthening of the standardisation framework concerning equipment and systems used in air traffic management gives priority to the harmonisation and, where appropriate, mandatory introduction of airborne and ground safety tools [3]. These alerting devices permit to detect occurrences or potential occurrences thereby contributing to avoid collision, controlled flight into terrain (CFIT) and other unsafe situations.

[3] These tools include Minimum Safe Altitude Warning, Short Term Conflict Alert, Medium Term Conflict Detection, Area Proximity Warning, Surface Movement Guidance and Control Systems, Airborne Collision Avoidance Systems)

2.10. Air traffic controllers have irreplaceable expertise on how the systems and techniques work. At the moment this expertise is not fully harnessed. Air traffic controllers and air navigation staff in general should be more closely involved at two levels:

- in the evaluation of new systems and techniques, for example in the diagnosis mechanism;

- in the discussions on the general framework governing air navigation, by extending to the air navigation sector the Europe-wide social dialogue already existing in other sectors of air transport.

2.11. The shortage of air traffic controllers is expected to become more acute in the years ahead, due to the age pyramid in this profession. The solution to this problem is a matter for the service providers and depends on the performance requirements established by Community regulation. However, the Community can contribute, liasing with EUROCONTROL, towards identifying the reasons which militate against recruitment of new controllers. Besides the number of controllers, the High Level Group's report highlights another worrying phenomenon: the disparities in procedures and training as well as in licensing which, in practice, rule out any real mobility of staff within Europe and prevent any flexibility. The Commission will propose solutions to overcome this lack of harmonisation at Community level.

2.12. In this context, the Commission proposes the establishment of an authorisation system for air navigation service providers, setting the minimum conditions for exercising this function at European level. However it will be left to the Member States to implement the system. This should make it possible to enforce the overriding Community principles and to harmonise the essential conditions which must be imposed on service providers. Member States' right to decide the statutes and structure for providers best suited to their specific national conditions will also be simultaneously respected. This should also facilitate co-operation between service providers. In order to enable transnational service provision, the system of authorisation is based on the delivery of a harmonised authorisation and on the mutual acceptance of authorisations granted by Member States. Further provisions are included to allow a reasonable period of time for existing service providers to comply with the terms of the system of authorisation. The transparency of the provision of services is finally strengthened by the development of adequate accounting systems to report costs for each separate service and enable comprehensive audits.

2.13. With regard to air traffic services [4], Member States retain their power to designate the service providers which have to operate under monopoly conditions within a specific airspace over their territory. However, the system of authorisation enables Member States to designate providers established in other Member States. Further co-operation and integration between service providers, especially in the upper airspace, is promoted by the creation of control areas across national boundaries [5] and the subsequent designation by Member States of service providers entitled to operate in such areas. In this light, existing regional service providers, such as the EUROCONTROL Maastricht Area Control Centre would have to be adequately addressed [6]. Because of the close link of this activity with military interests, and the lack of third country markets, an ownership provision will prevent non-EU interests from controlling these services except where reciprocity is guaranteed. A Community framework applicable to ancillary services [7] is also defined, based on the principles laid down in the EC Treaty.

[4] Provision of air traffic control during all phases of flight.

[5] Functional blocks of airspace in the proposal for a regulation on the organisation and use of the airspace (see Annex 2).

[6] Pursuant to Article 1(2) of the "Agreement relating to the provision and operation of air traffic services and facilities by EUROCONTROL at the Maastricht Area Control Centre", Contracting States to this agreement retain their competence and obligations in respect of regulations, rule-making and airspace organisation.

[7] Provision of communication, navigation and surveillance infrastructure, and meteorological services for airspace users, search and rescue services and aeronautical information services.

2.14. In parallel, the Commission proposes amendments, within the context of the common route charges system of EUROCONTROL, to the structure of charges for use of airspace. This will add efficiency incentives for service providers and incentives to optimise the capacity of the system as a whole for providers and users.

2.15. Developments in air traffic have enabled a number of air navigation service providers to become more autonomous in the managerial and financial domains. The majority of the Member States have transferred the responsibility for provision of services to agencies under exclusive rights. Such bodies, which are largely autonomous, and in principle self-financing, remain under the overall jurisdiction of national administrations in terms of their level of performance and charges. In these cases regulation is usually requested because of monopolistic conditions to align behaviours of service providers with public objectives to maximise general economic welfare through the setting of the appropriate price level in respect of the quality and quantity of services to be delivered.

2.16. To a significant extent, legislation providing for regulation of economic aspects of service providers does not yet exist in the Member States. However they have adopted the ICAO principles in relation to the establishment of charges for the provision of air traffic services [8]. Those principles are in turn embodied within the EUROCONTROL principles [9] and with which EUROCONTROL Member States consider themselves bound. But neither ICAO nor EUROCONTROL have compliance mechanisms or an enforcement power. They have not been subject to regulation through the introduction of rewarding/or penalising incentives to encourage an efficient and effective provision of air navigation services. In addition, ICAO and EUROCONTROL regulations cannot directly affect service providers, when autonomous, or airspace users.

[8] Article 15 of the 1944 Chicago Convention on International Civil Aviation and Document 9092/6.

[9] "Principles for Establishing the Cost-base for Route Facility Charges and the Calculation of the Unit Rates" - Doc. N° 99.60.01/1).

2.17. Therefore it is of the utmost importance to introduce incentives on investment and management. The incentives are defined in respect of helping supply meet demand through financial rewards and penalties. They shall be devised so as to be equitable between airspace users and service providers, in order to reach better co-operation amongst them. That is why a charging regime is needed to ensure an efficient, transparent and cost-related air traffic management system. Furthermore, incentives will also have to ensure that air traffic management policy is consistent with environmental and general transport policies.

2.18. The increase in the capacity of Europe's air traffic control system will require funding exceeding the resources currently available from Community programmes. Solidarity between users should make it possible to raise the funding needed by allocating some of the en route charges paid by airlines under the EUROCONTROL common route charges system to these projects, inter alia with the aid of measures to reshape this route charges system to include criteria reflecting attainment of common policy objectives. This allocation would not exceed the costs saved as a result of the improvements in the efficiency of the system. The Commission will examine the feasibility of allocating some of the en route charge (therefore with no impact on the Community budget) for measures to increase the capacity of Europe's air traffic control system, with a view to carrying out projects of common interest between 2002 and 2005.

3. Proposal for a regulation of the European Parliament and of the Council on the organisation and management of airspace

3.1. The Single European Sky must also be conceived as a single airspace without frontiers. The first thing which this harmonisation implies is the adoption of a basis for organising the upper airspace for all Member States and ensuring consistency between the national organisations responsible for the lower airspace. This requires that a unique flight information region [10] is created by merging the 15 regions into a single portion of airspace. Therein air traffic services will be provided according to the same rules and procedures. As a first step the Commission proposes to take this important move with regard to the upper airspace where the majority of international flights are operated. To achieve this, a common airspace design and strategic management at European level with the support of EUROCONTROL is needed.

[10] A Flight Information Region (FIR) refers to a portion of the airspace where air traffic services are provided. Traditionally lateral limits coincide with the borders of states; each FIR is subject to specific rules by the state responsible.

3.2. The creation of a single fight information region in the upper airspace allows the reconfiguration of such airspace into control areas. Where appropriate, these will be designed across national boundaries. The design of these areas gives an opportunity to establish functional blocks of airspace where control responsibility is assigned optimally and in line with operational requirements to one, or a group, of service providers. This provides for a more efficient use of airspace, systems and manpower. Thus reducing the costs for airspace users. At the same time, uniform and coherent upper airspace planning has to be harmonised with the developments in the lower airspace. The Commission expectsproposals, technically co-ordinated to ensure operational cohesion, on the appropriate size and location of functional blocks of airspace by service providers in conjunction with Member States. These proposals will be taken into account by the Commission, involving EUROCONTROL, with a view to a final decision on the suitable configuration of airspace, that is the minimum number of airspace blocks consistent with overall system efficiency.

3.3. In conjunction with the proposal to create a single upper flight information region; the Commission proposes:

- the harmonisation of airspace categories, inter alia for developing the architecture of this airspace and route and sector design and for ensuring a supply of reliable and complete information for regulators and airspace users alike;

- organisation and management of airspace with a view to allowing allocation of sectors to service providers and organisation of transfers of airspace between providers; the delimitation of the sectors of airspace allocated to service providers will have to be consistent with the definition of the airspace adopted at European level;

- rules for organising flow management, including better planning, rules on priority-setting in the event of congestion, relief routes and a crisis mechanism; EUROCONTROL's existing Central Flow Management Unit is a useful tool which will have to be developed by supporting its tasks and mandate with the adoption of such rules in Community legislation;

- mechanisms for more disciplined use of airspace, to integrate airports into airspace management and improve co-ordination between airport and airspace slots.

3.4. Use of airspace must be organised in a manner recognising the specificity of military uses. Without impinging on defence imperatives, efficient use of airspace warrants closer co-ordination between the two categories of user: civil and military. A first step to achieve this is the full and coherent implementation of the Flexible Use of Airspace [11] concept by all Member States in the upper airspace and, at a second stage, in the lower airspace. In order to facilitate a uniform and optimal application of such a concept, the Commission proposes to establish the criteria for its application based on principles of uniformity, completeness, confidence, priority, sharing, simplicity and transparency. The Commission also promotes a tighter co-operation between civil and military. This will contribute to reinforce the security in the use and management of airspace against any potential intruder.

[11] The Flexible Use of Airspace concept developed by EUROCONTROL is an airspace management concept currently applied in the European Civil Aviation Conference area and based on the fundamental principle that airspace should no longer be designated as either pure civil or military airspace, but rather be considered as one continuum in which all airspace users have to be accommodated to the extent possible

3.5. Efficient use of airspace can only be realised if seamless and efficient air traffic management is provided within national airspace and beyond. Airspace management is one of the main functions of air traffic management. Civil and military service providers are complementary partners in the air traffic management system. The Flexible Use of Airspace and European airspace management, therefore, will not be as efficient as required without operational and technical interoperability between civil and military service providers. Across the Community, civil-military air traffic service provision is not organised uniformly. To improve such interoperability, the Commission encourages Member States and EUROCONTROL to take appropriate measures.

4. Proposal for a regulation of the European Parliament and of the Council on the interoperability of the European Air Traffic Management network

4.1. The Community has decision-making mechanisms allowing for harmonisation and standardisation at European level. To achieve this, the Commission proposes a text enshrining the principle of standardisation in the field of air traffic management, on its own initiative (subject to compliance with the international commitments already given). The objective is to put in place an instrument which will be effective and comprehensive. But it must also be rapid and flexible to allow harmonised Europe-wide definition and implementation of the technical regulations necessary. The "Single Sky Committee", which should replace, inter alia, the existing committee set up by Directive 93/65 [12], will be indispensable for the success of this action [13].

[12] Council Directive 93/65/EEC of 19 July 1993 on the definition and use of compatible technical specifications for the procurement of air traffic management equipment and systems.

[13] See also Report of the Commission on application of Council Directive 93/65/EEC (COM(1999)454 final of 1.10.1999)

4.2. The proposed regulatory approach foresees three different levels:

- The adoption of essential requirements as a mandatory reference for all stakeholders engaged in the development, production and operation of systems. In particular it should ensure interoperability and the seamless provision of air navigation services; these requirements give enough information to allow stakeholders and national authorities to interpret them in the same way;

- The establishment of implementation rules to enforce the above requirements, where appropriate, in the form of specific requirements by which stakeholders are to be bound. The objective of this level is to secure compliance with operational and technical developments when this is required by their cross-border nature and therefore the need for integrated operations. To ensure commonality of action, the implementation rules may also prescribe a uniform target date of entry into force of new concepts of operation or technical advances to be imposed on all operators concerned. ICAO and EUROCONTROL Standards can be associated with this level.

- The drafting of European standards and/or EUROCONTTROL technical specifications representing the lower level of the regulatory process and implying the consensual agreement of stakeholders on standards of voluntary application.

4.3. Procedures to elaborate the above requirements and standards must reflect their mandatory or voluntary nature. Therefore, the Commission proposes that implementation rules are established on the basis of the work carried out by EUROCONTROL, notably relying on the future regulatory process of EUROCONTROL Notice of Proposed Rule-Making (ENPRM). With regard to European standards, in consistency with the Community approach [14] to standardisation, they are established by consensus, subject to public inquiry and approved by recognised European Standardisation Organisation, in collaboration with Eurocae [15]. This also carries with it the obligation to be implemented unchanged at national level with the status of a national standard and withdrawal of any conflicting national standards [16]. In certain specialised fields, EUROCONTROL may develop technical specifications, particularly on operational matters where co-ordination between service providers is needed.

[14] Council Resolution of 7 May 1985 on a new approach to technical harmonisation and standards.

[15] The European Organisation for Civil Aviation Equipment (EUROCAE) is a non-profit making European Association, established in 1963, with members from national aviation authorities, equipment manufacturers and airlines.

[16] This proposal represents a significant move from the present situation where EUROCONTROL still draw up functional and technical specifications of a voluntary nature. However, these specifications are rarely used consistently in Member States as they are published and the effectiveness of this process is undermined by the lack of transparency and balance between stakeholders in the definition of technical texts. Furthermore, they often mix elements of mandatory and voluntary application.

4.4. At product level, manufacturers are required to make a declaration of conformity with essential requirements. The conformity with European standards creates a presumption of conformity to essential requirements. The conformity assessment relies on a modular approach, as specified in Council Decision 93/465/EEC [17]. Different modules for conformity assessment are available for utilisation according to the risks associated with the products concerned. These vary from a module which leaves the responsibility for conformity assessment to the supplier (self-certification) up to modules which require strict quality controls in order to assure compliance. The proposed approach will allow, once a product has achieved its declaration of conformity in its own Member State, the free circulation of such a product in the internal market. Thus creating the conditions for a competitive environment among manufacturers.

[17] 93/465/EEC: Council Decision of 22 July 1993 concerning the modules for the various phases of the conformity assessment procedures and the rules for the affixing and use of the CE conformity marking, which are intended to be used in the technical harmonisation directives.

4.5. With regard to the acceptance of systems before operation, air navigation service providers must state their conformity with essential requirements by submitting a declaration to national supervisory authorities. To this end, air navigation service providers may avail themselves of the services of notified bodies and recognised organisations when so required by implementation rules. The proposed approach will enable monitoring of the development of equipment and systems to verify its compliance with essential requirements and associated implementation rules. The approach considers transitional aspects linked to the lack of implementation rules and European standards for many systems.

4.6. The creation of a common, integrated airspace means being able to develop, at European level, the solutions which are best both technically and commercially and which are best suited to the needs of airspace users and passengers in general. The Community can provide decisive support in this field, by optimising its own financial aid procedures through the trans-European network (TEN) programme and the EU's fifth Framework Programme (FP) on research and development (1998-2002). In its proposal for the next FP on research (2003-2006), the Commission has included aeronautical research as a priority particularly with a view to increasing capacity and safety in the air transport system to support the implementation of the Single European Sky. This confirms the recommendations made recently by a Group of Personalities on Aeronautics, who identified air traffic management as one of the main factors preventing growth in aeronautics [18], as well as the targets of the eEurope 2002 Action Plan, agreed by Heads of State and Government in Feira. In this way the Commission plans to provide a framework for projects of European interest, for example on satellite navigation (Galileo), data processing and communication and the supply of aviation data and planning tools.

[18] See on the Report of the Group of Personalities: "European Aeronautics: a vision for 2020 Meeting society's needs and winning global leadership", January 2001

5. Conclusion

5.1. The Community framework offers instruments for implementing the lines of approach advocated by the High Level Group on the Single European Sky. The creation of the Single Sky calls for measures of the same type incorporated in the creation of the single market. However, development of these measures requires technical expertise not available within the Commission departments but which will be provided, within the framework of arrangements with EUROCONTROL. It also requires consideration by the European Council for the possible setting up of a framework on military co-operation.

5.2. The Commission therefore proposes to the European Parliament and the Council to adopt the enclosed proposals for regulations. The Commission will also take all appropriate initiatives for setting up the institutional framework necessary to organise military co-operation.