COMMISSION STAFF WORKING DOCUMENT Revision of Council Regulation (EC) N°219/2007 of 27 February 2007 on the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR) Accompanying the document Proposal for a Council Regulation amending Regulation (EC) N°219/2007 on the the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR) as regards the extension of the Joint Undertaking until 2024
Date: 2013-07-10
Institutions: European Commission
Subjects: European Joint Undertaking, air safety, air space, air traffic, air traffic control, cost-benefit analysis, environmental risk prevention, new technology, operation of the Institutions, research and development













EUR-Lex - 52013SC0262 - EN











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52013SC0262

COMMISSION STAFF WORKING DOCUMENT Revision of Council Regulation (EC) N°219/2007 of 27 February 2007 on the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR) Accompanying the document Proposal for a Council Regulation amending Regulation (EC) N°219/2007 on the the establishment of a Joint Undertaking to develop the new generation European air traffic management system (SESAR) as regards the extension of the Joint Undertaking until 2024 /* SWD/2013/0262 final */










1.                      
Introduction 

The SESAR Joint Undertaking (hereinafter 'the
Joint Undertaking' or 'the SJU') has been established in 2007 by the Council[1] as
a public-private partnership (PPP) under Article 171 of the Treaty establishing
the European Community (now Article 187 of the TFEU). The SJU has been assigned
the task of ensuring the modernisation of the European Air Traffic Management
(ATM)[2] system by coordinating and
concentrating all relevant Research & Development efforts in the Union.
The SJU Regulation also defines the financing
mechanism of the Joint Undertaking as well as the maximum contributions of its
different members, including private undertakings. The SJU Regulation specifies
that the maximum EU contribution is €700 million of which €350 million is paid
from the budget of the Specific Programme Cooperation of the seventh programme
for research and technological development (FP7) and €350 million from the
budget of the Framework programme on the TEN-T.[3] 
In accordance with its founding Regulation, the
SJU shall cease to exist on 31 December 2016. However, the Regulation foresees
that the duration of the SJU can be reviewed by the Council based on a proposal
from the Commission.
The SJU has been subject to a number of
evaluations/workshops/public consultations during the period 2007-2012. An
overview of the results of the various evaluations is provided in appendix 1 of
this report. The evaluation work has demonstrated the SJU's capacity to be more
effective and efficient to execute EU research and development activities and
demonstration programmes than if driven within FP7 R&D programme for which
activities would be performed through calls for proposals. The consultations of
stakeholders performed both by the SJU and the Commission confirmed this
positive conclusion. The focus of these consultations was to obtain feedback on
the way the SJU has implemented its tasks since its establishment, as well as
to receive comments regarding the possible future evolution of the SJU's work
in this field beyond 2013.

2.                      
Policy background
2.1.                
The Single European Sky, SESAR project and the
SJU
2.1.1.          
The Single European Sky (SES) and its
technological pillar – the SESAR project

Since 2004, the European Union (EU) gained
competences in ATM leading to the EU framework. The Single European Sky
(hereinafter 'the SES'), which consists of two major packages of legislation
(SES I and SES II) as well as numerous supplementary Implementing Rules, was
established in 2004[4] with a threefold goal: to enhance air traffic safety standards, to
contribute to the sustainable development of the air transport system, and to
improve the overall performance of the European ATM and air navigation
services.[5] To achieve its objectives, the SES
relies on 5 essential and interrelated pillars.
Figure :
Source:

Source:
European Commission
The project to modernise ATM in Europe to cope with sustained air traffic growth and air traffic operations under the
safest, more cost- and flight-efficient and environmentally friendly conditions
– the SESAR project – is the technological pillar of the SES.[6]
Because it is based on national sovereign
airspace, ATM in Europe is still fragmented and dominated by national monopoly
service provision and ageing local ATM systems.[7] ATM is of crucial importance to
efficient air transport operations. As air traffic volumes have increased
considerably and traffic for passengers and freight is expected to grow 5% per
annum over the next 20 years (Figure 2), the fragmentation of ATM systems
causes serious capacity problems and major delays for passengers and freight
transport, needless fuel consumption and emissions, safety concerns and high
operating costs.
Figure 1: European air traffic growth trend
Source:
ATM Master Plan Edition 2[8]
The SESAR project aims at implementing a new
concept of operations and ATM system, which represents a paradigm shift in
today’s ATM and will enable the achievement of the SES performance objectives.
The SESAR concept is based on the principle
that the users of the airspace and controllers define together, through a
collaborative process and exchange of information, the optimal, predictable and
timely flight path. Underlying this concept are innovative technologies and new
operational procedures resulting from research, development and validation
activities that are focussed on performance and deployment.
The SESAR project comprises three interrelated,
continuous and evolving collaborative processes (Figure 3):
1.      The first process is the definition of the content, the
priorities and the development and deployment plans of the next generation of
ATM systems contributing to the achievement of the SES performance targets. 
2.      The second process is the development and validation of the
required technological systems, components and operational procedures of the
SESAR concept of operations in accordance with the ATM Master Plan (see below).
The development phase of the SESAR project is managed by the SESAR Joint
Undertaking (SJU).
3.      The final process is the deployment of the SESAR concept of
operations resulting in a modernised ATM infrastructure composed of fully
harmonised and interoperable components that guarantee high performing ATM in Europe. Deployment comprises the activities and processes related to the industrialisation
and implementation of technologies and procedures developed and validated by
the SJU.[9] 
Figure 2: Interrelationships between the three SESAR
processes, from definition to deployment.
Source: European Commission
However, only a timely, coordinated and
synchronised deployment process will allow achieving the benefits expected from
the SESAR concept. 
The deployment process will close the loop of
the SESAR lifecycle while, as shown above, feeding into the definition and development
processes as adaptations to the operational reality may become necessary. The
deployment process will allow SESAR to fully deliver its benefits from concept
to implementation. It is about to be activated and for this purpose, the
Commission will soon adopt an implementing Regulation that develops the concept
of common projects[10] as deployment instruments and
establishes governance and incentives mechanisms that will allow operational
stakeholders to organise and accelerate deployment. 
Common projects aim to deploy ATM
functionalities that are identified in the ATM Master Plan as essential
contributors to the improvement of the European ATM system’s performance, that
are mature for implementation, that demonstrate to have a global positive
business case for the European ATM network and require a synchronised
deployment..
To make the decision for industrialisation and
deployment of SESAR Common Projects, large scale demonstrations are required.
They will allow the validation of the SESAR concepts in a full operational
environment. They will in particular focus on the validation of the interoperability
of the systems and constituents through demonstrations on multiple platforms
and with various types of aircraft. They will therefore provide a realistic assessment
of SESAR’s contribution to improving the performance of the ATM network as well
as the benefits for each stakeholder.
A major strength of the SESAR project is the collaborative
and coordinated framework in which its definition,
development and deployment processes are embedded,
which constitutes an effective approach against the previous fragmentation of
efforts and resources in this domain. On the basis of the current trends, ATM
research and development is a global and competitive sector in which staying in
the lead requires a concerted effort from Europe's research community. This
framework attracts the aviation stakeholders who, for
the first time and through the appropriate instrument, can work together and
with the EU in a large scale modernisation project
driven by the SES performance objectives and powered by a cooperative effort to
concentrate and rationalise resources for achieving a better performing ATM system.

2.1.2.          
The ATM Master Plan – an evolving document

The first phase of the definition process ran
from 2004 to 2008 and delivered the first edition of the European ATM Master
plan. The ATM Master Plan is the agreed roadmap that connects ATM research
and development activities with deployment scenarios to achieve the SES
performance objectives. The initial version of the European ATM Master Plan,
resulting from the first phase of the SESAR project's definition process,
constitutes the basis for the development and deployment activities of the
SESAR project. This initial Master Plan was endorsed by the Council on 30 March
2009. The most recent update of the ATM Master Plan, approved in 2012[11],
identifies the "Essential Operational Changes" that need to be
implemented in the following three main steps to lead to the full deployment of
the new SESAR concept by 2030: 
-        
Step 1 – time based operations - concentrates on
unlocking latent capability particularly by improving information sharing to
optimize network effects. 
-        
Step 2 – trajectory based operations - develops
the System Wide Information Management (SWIM) and initial trajectory management
concepts to increase efficiency. 
-        
Step 3 – performance based improvements - will
introduce a full and integrated trajectory management with new separation modes
to achieve the long term political goal of SES.
The ATM Master Plan is translated into a yearly
work programme, itself further defined into work packages, designed by in
collaboration with all stakeholders. The workprogramme is submitted for
approval to the SJU Administrative Board. Currently, as the EU contribution had
to be limited to the 2007-2013 financial perspectives, the SJU work programme
up to 2016 focuses mainly on Step 1 (time based improvement) and to a large
extent on Step 2 (trajectory based improvements) of the ATM Master Plan,
leaving in particular Step 3 (performance based improvements) to be developed
at a later stage. Each step will be developed to a validation stage, which
excludes validation in full operational context and in a large scale context.
Each update of the ATM Master Plan reactivates
the definition process, which adapts and refines the requirements of the new
ATM systems to respond the evolving SES performance objectives and to the
operational reality and feeds these requirements into the subsequent processes.
Therefore, in order to meet the ATM Master Plan
objectives, R&I activities additional to those covered by the current SESAR
work programme are required: the completion of Step 2 and Step 3 of the ATM
Master Plan, including conflict management and automation, and trajectory and
performance management. Equally, the progress made under the current work
programme, will lead to further development: for example, given the progress
made on remotely piloted aircraft systems’ (RPAS) ATM integration which has now
reached the development stage and the ATM broad scope of SESAR, RPAS ATM
integration activities will be part of the extension phase of SESAR. And to
prepare fully for deployment, large scale demonstrations need to be envisaged.

2.1.3.          
The SESAR Joint Undertaking (SJU) 

Taking into account the
number of actors who need to be involved in the process and the financial
resources and technical expertise needed, the EU has set up in 2007 a legal
entity, the SJU, in charge of ensuring the management of the funds assigned to
the SESAR project during its development phase.
Objective
The SJU aims to ensure the modernisation of the
European ATM system by coordinating and concentrating all relevant R&D
efforts in the Union. In practice, the SJU is responsible for coordinating and
managing the development activities of the SESAR project in accordance with the
ATM Master Plan. In this respect, it is responsible for
carrying out the following tasks:
·       
organising and coordinating the activities of
the development phase of the SESAR project, in accordance with the ATM Master
Plan;
·       
ensuring the necessary funding for the
activities of the development phase of the SESAR project in accordance with the
ATM Master Plan;
·       
ensuring the involvement of the stakeholders of
the air traffic management sector in Europe;
·       
organising the technical work of research and
development, validation and study, to be carried out under its authority while
avoiding fragmentation of such activities;
·       
ensuring the supervision of activities related
to the development of common products duly identified in the ATM Master Plan.
The SJU is also responsible for maintaining the
ATM Master Plan. The SJU plays a vital role in the SESAR project ensuring
continuity in its lifecycle. It brings new ATM concepts from ideas to the
appropriate level of maturity for moving them to deployment. It produces,
through collaborative research, development and validation processes, the
material for deployment and at the same time it defines/refines, through the
update of the ATM Master Plan, the needs for further evolution of the Union’s ATM system. As the SJU work programme and activities are directly informed by the
ATM Master Plan, they will understandably evolve accordingly over time in
response to the ATM Master Plan updates as well as to maturing realities of the
SES and SESAR itself. 
Founding members and governance structure
The founding members are the European Union,
represented by the European Commission, and Eurocontrol Organisation,
represented by its Agency. 15 public and private enterprises and consortia were
selected, through an open competitive procedure, as members of the SJU. These
include air navigation service providers, ground and airborne manufacturing
industry, aircraft manufacturers and airport operators[12].
The SJU is governed by the Administrative Board and the Executive Director.
Associate partners of the SJU Members and Associate Partners of the SJU
complement and complete the expertise brought by the SJU Members in specific
ATM fields (for more details on the SJU governance structure, see the Statutes
of the Joint Undertaking[13]).
The Administrative Board comprises
representatives of the SJU members and of the military, the civil airspace
users (commercial airlines, business aviation, and general aviation), the air
navigation service providers, the equipment manufacturers, the airports, the
professional staff and the research community at European level.
Scope of activities
The SJU Regulation defines a broad perimeter
for the scope of its activities that may cover all relevant ATM R&D efforts
in the Union.
In practice, the main scope of activities of
the SJU is defined by the ATM Master Plan. The SESAR programme represents
around 300 projects which are grouped, into work packages, from exploratory
research to demonstrations. Amongst these, Work Package E (WPE) deals with long
term and exploratory research. The scope of WPE is to stimulate long-term
research, creativity and innovation, to develop the scientific knowledge aimed
at extending the SESAR vision and also to complement SESAR activities. WPE is
steered by the Scientific Committee of the SJU together with the Executive
Director, operationally managed by the SJU Programme Manager in charge and
within the Programme Management system of the SJU, while Eurocontrol is
providing the administrative support. WPE SESAR Long Term and Innovative
Research themes are defined with the advice of the Scientific Committee. These
research themes include legal aspects of paradigm shift; towards higher levels
of automation in ATM; mastering complex systems safely; economics and
performance.
In order to guarantee sound governance and
independence of exploratory research, private partners do not contribute to the
financing of WPE. Funding of WPE during the period 2007-2014 amounted to about
EUR 20 million. As up to now, activities focused heavily on development, the
exploratory research has been limited to its strict minimum, well below the
usual research effort of previous framework programmes.
Furthermore, the SJU
has become the EU's "technological ambassador" for promoting global
ATM interoperability. The SJU carries out, for the EU side, the cooperative
actions in the field of SESAR-NextGen
interoperability under a Memorandum of Cooperation in civil
aviation R&D between the EU and the USA.

Lessons learnt

Several sources indicate that the SJU is
performing well and has had a positive impact on ATM R&I.: the Mid-term
Evaluation of the SESAR Joint Undertaking[14] (July
2010), the internet public consultation held from 25 July 2012 until 17 October
2012, and the two consultative workshops held on 02 October 2012 and 23
November 2012.
The SJU mid-term evaluation concluded that the
SJU performed well during the 2007-2009 period, both in terms of setting up and
building its organisation as well as conducting its tasks. Although it was too
early to assess the overall programme efficiency of the SJU, progress made
during the evaluation period indicated that the Joint Undertaking / Public
Private Partnership model as a legal entity established under the EC Treaty[15] had proven to
be more effective and efficient to execute Community research and development
activities and demonstration programmes than if driven within FP7 R&D
programme for which activities would be performed through calls for proposals.
The SJU's key achievements noted by the
evaluation were:
·       
Gathering and committing stakeholders on a
common R&D programme;
·       
Developing the work programme that supports
rationalisation and consistency, avoiding gaps and overlapping;
·       
Developing the required methods and tools for
programme implementation;
·       
Initiating a number of projects within a short
timeframe without compromising on the quality requirements and needs for
coordination between work packages and projects.
The evaluation also notes some challenges
facing the SJU at the time. The first one relates to maintaining its capacity
to coordinate all work-packages and projects and validate the deliverables. The
second focuses on communication processes and instruments, which should be
further developed to meet the differentiated communication needs of the
founding members, SJU members and other stakeholders, members and non-members
of the Administrative Board.
The public consultation confirmed the SJU is
performing well and has had a positive impact on ATM R&I. The SJU is seen
as most influential in reducing fragmentation of ATM R&D efforts in Europe and logically in coordinating EU funded R&D in ATM and in technical progress on
new ATM solutions. A majority of respondents also see the SJU improving or
strongly improving the EU position in the global context of ATM modernisation
programmes.
The SJU is viewed as being clearly most
successful in three areas: ensuring the involvement of stakeholders of the ATM
sector in Europe; guaranteeing the necessary funding for the development of the
SESAR Project; and organising and coordinating the activities of the
development phase of SESAR. 
A very large majority still thinks that there
is a continued need for EU intervention in the ATM area (94%), and that the SJU
should be extended under Horizon 2020 (81%). 
Respondents also mention improvement
possibilities, but opinions vary greatly on what should precisely be bettered.
Issues mentioned are e.g. the communication between and within stakeholders,
the simplification of procedures, top-down vs. need driven approach, the
use of existing ATM research facilities and networks. 
Sources of financing
The funding needs of this first phase of
development activities have been set at €2.1 billion, which is entirely
financed by the SJU members. The EU provides a third of the necessary funding
from the FP7 (€350 million) and TEN-T (€350 million) Programmes. Eurocontrol
equally provides a third of the funding (€700 million) and the remaining third
(€700 million) is provided by the other 15 members. While the EU contribution
is in cash, Eurocontrol and other industry members’ funding comprises both cash
(minimum 5%) and in-kind contributions.[16] 

2.2.                
Horizon 2020: basis for SESAR project funding

On 6 October 2010, the Commission adopted the
"Innovation Union" setting out a strategic approach to innovation.
The Innovation Union is a "flagship" in the Europe 2020 Strategy. The
Innovation Union announced that Europe's efforts will be focussed on challenges
such as climate change, energy and food security, health and an ageing
population. It will use public sector intervention to stimulate the private
sector and to remove bottlenecks which stop ideas reaching the market. These
include lack of finance, fragmented research systems and markets, under-use of
public procurement for innovation and slow standard setting. 
On 30 November 2011, the Commission adopted a
proposal for the Horizon 2020 Framework Programme for Research and Innovation
(2014-2020), which is the European financial instrument implementing the
Innovation Union. As far as ATM is concerned, the transport programme proposed
puts forward objectives that are fully in line with the deployment and further
development of the SES. The need for innovative ATM technologies is recognized
by Horizon 2020. Horizon 2020 stresses that innovative ATM technologies should
contribute to a step-change in safety and efficiency with rapidly increasing
demand, to improve punctuality, to shorten travel-related procedures at
airports and to achieve resilience in the air transport system[17].
It also underlines that further support may be provided for joint undertakings
funded under FP7[18] (e.g. SJU).
Horizon 2020, which is the successor of the FP7
Programme, is a €79.4 billion programme at current prices which has been the
object of a fully-fledged Impact Assessment.[19] The proposed budget under Horizon
2020 includes a transport programme under "Societal Challenges" with
a proposed budget of €6.7566 billion at current prices.[20] 
The total cost of the SESAR programme,
estimated at €1.6 billion over the period 2014-2024, cover the whole spectrum
of R&I activities from exploratory research to demonstration, fully in line
with the Horizon 2020 spirit of providing seamless and coherent funding from
idea to market and of supporting innovation and activities close to the
market. It is also consistent with the portfolio of activities of other EU
bodies such as Clean Sky Joint Technology Initiative:
–       
exploratory research for an estimated amount of €100
million.
Now that the
deployment process is about to be launched, the balance of resources allocated
to the different phases of the R&I cycle need to be reviewed to keep
innovative ideas flowing in. In particular, more efforts need to be put into
exploratory research, involving universities, research establishments and SMEs
through “Centres of excellence” and “Blue sky research” activities.
–       
the completion of Step 2 and Step 3 of the ATM
Master Plan for an amount of € 1.2 billion. 
This includes activities
such as remotely piloted aircraft systems’ (RPAS) ATM integration, which have
now reached the development stage.
–       
large scale demonstrations, validating SESAR
concepts in full operational context and in a large scale context, for an
amount of €300 million.
Large scale demonstration
projects, which add a significant cost to the overall SESAR development phase, will
allow the validation of the SESAR concepts in a full operational environment.
They will in particular focus on the validation of the interoperability of the
systems and constituents through demonstrations on multiple platforms and with
various types of aircraft. This step is necessary to provide a realistic
assessment of SESAR’s contribution to the performance of the ATM network as
well as the benefits for each stakeholder. Large scale demonstrations
constitute the fundamental bridge inside the R&D to support an effective
and timely deployment of SESAR: they are key to show that new systems are
robust enough and they mitigate the risks associated to industrialisation
decisions.
The deployment activities of the SESAR
programme will not be implemented by the SJU and, consequently, will not be
financed by Horizon 2020.
These financial estimates were primarily based
on the experience gained so far in the SESAR programme and on extrapolations
relating to the activities to be completed in SESAR extension: 
o      
Exploratory research
was estimated on the basis of an eight years programme starting in 2017. It was
based on current exploratory research activity cost extrapolated to include 10
research centres, project funding to support Step 3 and beyond activities, PhDs/dissemination
and management funding. 
o      
For Step 2 and Step 3, same validation cost
allocations as for current SESAR projects were considered for an estimated
number of projects required completing the ATM Master Plan. 
o      
The RPAS ATM integration activities cost is an estimate
based on a draft RPAS roadmap and experience gained on other SESAR projects. A
definition phase of the RPAS ATM integration activities is planned to be
completed by the end of 2013. The definition of the exact scope and effort to
be dedicated to RPAS during the SJU extension phase will then be used to refine
this cost estimate.   
o      
Large scale demonstrations costs were estimated
on the limited on-going large scale demonstration projects experience and
taking due account of the extra ground/space/airborne equipment cost for the
more advanced concepts of Step 3.
On this basis, the EU's contribution to the
financing of SESAR under Horizon 2020 was estimated at up to €0.6 billion. This
represents a decrease compared to the period of 2007 – 20014 where the total of
the EU contribution to the SJU was €0.7 billion. [21]
This EU contribution to the financing of the SESAR development activities has
been estimated assuming that:
–       
Exploratory research, which by nature is highly financially
risky, needs to be reinforced to feed in the long-term ATM development process.
As long term outputs may go beyond the objectives of the ATM Master Plan, the
SESAR programme and indeed the SES, the provision of €100 million is fully born
by the EU.
–       
The remaining €1.5 billion is split into three
equal shares between the European Union, Eurocontrol and the private sector. The
net contribution from the private sector and Eurocontrol's contribution is €0.5
billion respectively.
The net contribution of €0.5 billion is
expected from the private sector. Eurocontrol and the Commission as founding members
would continue to co-finance the non-private sector input on an equal basis.
In light of the on-going discussions of the
Multi-annual Financial Framework of the European Union for the period
2014-2020, the specific contributions of all funding members (EU, Eurocontrol,
private sector) will have to be clarified.[22]
Also, Article 19 of the proposed Horizon 2020
Regulation explicitly indicates that the new framework programme may be
implemented through new contractual public-private partnerships (PPPs) or
existing joint undertakings funded under FP7 within the 2007-2013 financial
perspectives. In particular, subject to the amendment of their basic acts,
existing joint undertakings may receive further support from Horizon 2020,
based on the evaluation of a set of criteria such as the added value of action
at EU level or the scale of impact on industrial competitiveness, sustainable
growth and socio-economic issues. [23]

3.                      
Problem Definition
3.1.                
Problem analysis

It is clear from the above that the ATM Master
Plan, which is the agreed roadmap to develop and validate the necessary
technological systems, components and operational procedures of the SESAR
project and is therefore part of SES policy objectives, determines the scope of
research and innovation activities to be coordinated at EU level. Consequently,
this ex ante evaluation does not relate to this aspect of scope, but relates to
the implementing mechanism that should be put in place to ensure the coordination
and management of the activities and funds necessary for the technological
development of the SESAR project.
As indicated above, the SJU is responsible for
coordinating and managing the development activities of the SESAR project in
accordance with the ATM Master Plan. Pursuant to its founding Regulation, the
SJU will cease to exist on 31 December 2016.
Indeed, the SJU was established in 2007 by
Council regulation 219/2007 for a period up to December 2016 on the basis of a
public-private partnership whereby the funding partners (the European Union
& Eurocontrol) and the private sector (supply industry, airspace users, air
navigation service providers) work closely together in a single European effort
to avoid the past defragmented approach to research and innovation in the areas
of air traffic management. This means that from 2017 on, the EU action is
discontinued and the SJU is not automatically extended.
Continuity in coordinating all ATM related
R&I efforts in the Union is not ensured beyond 31.12.2016 thereby putting
at risk the achievement of the Single European Sky and the ATM related
objectives of the 2011 White Paper on transport policy and of Horizon 2020.
If no action is undertaken, this situation will
inevitably disrupt the current momentum of European ATM research that needs
stable and long term support for its lengthy innovation cycles. It would also
put an end to the existing stakeholder partnership that pools resources from
both public and private levels, which would result in a return to the
fragmentation of R&D efforts in the Union, constituting a negative signal
to stakeholders and endangering the present and future investments in ATM
R&I.

3.2.                
Needs assessment
3.2.1.          
The
ATM community 

The ATM community, comprising civil and
military Air
Navigation Service Providers (ANSPs), airspace users and airports, is required
to comply with the SES performance objectives
aiming to improve the safety and capacity of the ATM system, while reducing
delays and operating costs, increasing the efficient use of resources (fuel,
airport and airspace capacity), enhancing dynamic flight planning and
optimising flight profiles. More specifically, advances in communication
(air-ground and air-air linkages, interoperability across applications, etc.),
navigation (improve flight profile accuracy from gate to gate, etc.) and
surveillance (improve safety and security, etc.) are all necessary to ensure
the transition to a modern ATM system. 
To achieve the above mentioned compliance, the
ATM community will need to agree on and dispose of the validated SESAR
technologies and procedures, which are geared to achieving the SES performance
objectives.

3.2.2.          
The European aerospace industry 

The European aerospace industry's future
depends to a large extend on the competitive edge it can derive from innovation
and technological advancement. This industry, encompassing a wide range of
activities from manufacturing aircraft or ground and airborne equipment to
selling specific services, is a leading sector for the European economy that is
committed to pursuing the SES performance objectives by providing state of the art ATM systems.
The
timely development and deployment of SESAR technologies and procedures will
boost Europe's innovation capacity and the competitiveness of its industry
worldwide allowing the EU to have a strong voice in standardisation bodies. For
the aeronautical supply industry, the market perspectives for ATM modernisation
are worldwide. SESAR has enabled the EU to enjoy today a strong
position on the international scene and has become a reference programme in the
domain of modernisation of ATM systems. This has facilitated the launching
of several cooperative projects and agreements with third countries, offering
significant opportunities for European industry and employment and reinforcing
European leadership in this domain.

3.2.3.          
The European Commission and the Members States

The implementation of the SES is crucial for
meeting the objectives of EU's common transport policy, which aims at
developing an efficient and sustainable transport system. The SES framework
contributes to achieving this objective by modernising ATM services and
infrastructure. The
Commission has the responsibility to drive SES implementation process
exercising regulatory and oversight functions. SESAR
is one of the instruments that support the implementation of the SES.
For Member States,
beyond the recognised drive towards pooling R&I resources in view of
reaching the SES target, clear governance arrangements within European ATM
allowing efficient decision making and reporting are considered crucial for the
success of a large scale programme such as SESAR. The SES regulation packages
and implementing rules provide the regulatory framework for SESAR's
implementation, and Member States are closely involved in the deployment
governance through the Single Sky Committee[24].

3.2.4.          
Academia, research community and SMEs

Exploratory research supports both research and
education in ATM and related sectors, where universities, research centres and
innovative SMEs play a
fundamental role. Based on the current experience and
as a result of the consultations process with the research community, it
appears that these actors require longer-term
organisational and financial stability in order to generate the best
environment for the development of the highest value ideas.

3.2.5.          
Passengers

Since SESAR aims at shorter flight times (10 min. on average per flight),
improving the predictability and punctuality on arrival and departure,
increasing safety and reducing fares (up to €5 per ticket on average),
passengers are clear beneficiaries of a modernised European ATM system.

3.2.6.          
EU citizens

Since SESAR aims at managing air traffic management more efficiently notably
with appropriate flight paths around the airports and shorter en-route flight tracks,
the health of EU citizens will ultimately benefit from the reduction of air
pollutants and noise around airports and the environment will benefit from the
reduction of greenhouse gas emissions.

4.                      
Objectives and indicators

The objectives of the EU action should be
viewed as a hierarchy consisting of 3 interrelated levels (general, specific
and operational) where the time horizon differs for each level.

4.1.                
General objective and linked indicators

By preparing and supporting the timely
deployment of the SESAR concept in accordance with the ATM Master Plan, the
general objective of the proposed initiative is to contribute to achieving the
SES performance targets by 2020 and beyond, namely:
-        
to enable a 3-fold increase in capacity which
will also reduce delays both on the ground and in the air;
-        
to improve safety by a factor of 10;
-        
to enable a 10 % reduction in the effects
flights have on the environment and;
-        
to provide ATM services to the airspace users at
a cost of at least 50% less. 
"As early as 2008, the definition phase of
SESAR concluded that, with SESAR’s contribution, SES could
achieve the following targets by 2020:
-        
73% increase in
capacity from 2004;
-        
Associated improvement
in safety so that the total number of ATM induced accidents and serious or risk
bearing incidents will not increase despite traffic growth;
-        
10% reduction per
flight in environmental impact compared to 2005; and
-        
50% reduction in cost
per flight compared to 2004."[25]
SESAR contribution to the high-level goals set
by the Commission are continuously reviewed by the SESAR Joint Undertaking and
kept up to date through future versions of the ATM Master Plan. [26] As
a direct consequence of this continuous review and based on early results from
the development phase, SESAR is now targeting for Step 1 to enable[27],
as compared to 2005 performance:
·       
27 % increase in airspace capacity and 14% in
airport capacity;
·       
Associated improvement in safety so that the
total number of ATM-induced accidents and serious or risk bearing incidents
does not increase despite traffic growth generated by SESAR (i.e. through
air-space and airport-capacity increase). In an absolute term, 40% of reduction
in accident risk per flight hour is allocated to SESAR;
·       
2.8 % reduction per flight in gate to gate greenhouse gas emissions;
·       
6 % reduction in cost per flight[28].


4.2.                
Specific objective and linked result indicators 

The specific objective is to ensure the
concentration and coordination of all relevant ATM R&I activities in the EU
to implement the ATM Master Plan.
The result indicators related to this specific
objective are:
·       
The measurement of the actual consumption effort
by partners;
·       
The status of completion against the ATM Master
Plan;
·       
The general status of independencies between
projects;
·       
The status of issues and relevance of action
plans; and
·       
The number of SESAR research prototypes or
operational procedures that have reached the maturity phase.

4.3.                
Operational objective and linked output
indicators

The
operational objective of the action is to provide an efficient implementing instrument
that ensures coordination and concentration of all relevant ATM R&I efforts
in the EU. In this respect, the
following aspects need to be taken into account:
·       
Pooling and coordinating R&I public and
private investments in a cooperative spirit and bringing together the key
actors from ATM sector across Europe in order to implement the ATM Master Plan;

·       
To enhance the exchange of knowledge between
actors and disciplines; and
·       
To gather the necessary critical mass of
resources necessary to validate the concepts of operation resulting from
research results.
The output indicators reflecting
the efficiency of the instrument put in place in ensuring partnership and
focused efforts are:
·       
The assessment of stakeholders'
involvement in projects;
·       
The assessment of how
the SJU focuses on projects with most added values;
·       
The measurement of the project management
efficiency;
·       
The measurement of the quality of resources
planning in ATM R&I; and
·       
The existence of test and validation processes
of SESAR products to ensure a robust business model.
All data collection and assessments will be
carried out in the frame of the monitoring and evaluation measures laid out in
chapter 7. Future monitoring and evaluation.

5.                      
Alternative delivery mechanisms and risk assessment
5.1.                
Identification of options

In order to address the problem identified
above, and in light of the findings of the evaluation, stakeholders'
consultations and workshops, the Commission has envisaged the following
options:

5.1.1.          
Option 0 (baseline) - Collaborative research
under Horizon 2020

Under the baseline option no further EU action
is undertaken in relation to the SJU, which will expire as initially set out on
31 December 2016 after having completed its current work programme. All
remaining activities of Step 2 and the activities of Step 3 of the ATM Master
Plan would need to be implemented through collaborative research under Horizon
2020 and managed by the European Commission or delegated to an Executive
Agency.

5.1.2.          
Option 1 - Integration of EU coordination and
concentration in Eurocontrol

Here, Eurocontrol, the Pan-European
Organisation for the Safety of Air Navigation, takes over the coordination of
all activities required to finalised Step 2 and Step 3 of the ATM Master Plan.

5.1.3.          
Option 2 - Contractual Public-Private Partnership
(PPP)

This option foresees a contractual PPP between
the industry and the Commission, focused on completing the ATM Master Plan activities.
Contractual PPPs are ad-hoc and flexible arrangements between the industry and
the Commission, allowing a fast start-up of activities and rapid implementation
of programmes relevant to the needs of a specific industry.

5.1.4.          
Option 3 - Extension of the SJU

In this last option, the existing structure set
up to coordinate and programme the development and validation of SES performance
compliant technologies and procedures is extended, in view of completing the
activities foreseen in the ATM Master Plan. As already mentioned,
the activities that will start to be deployed as of 2014 and in the future
years result from the work performed by the SJU and its Members on Step 1 and
Step 2 of the ATM Master Plan. The SJU will play a key role to ensure that the
results are packaged in view of their adoption by the Commission as Common
Projects and made available to the entitity(ies) that will be selected as
deployment manager in 2014. The extension of the SJU further supports, on the
one hand, the R&I needs highlighted in the Master Plan to research and
develop around the most advanced part of Step 2 and the full scope of Step 3 of
the Master Plan and, on the other hand, the bridge between development and
deployment with the production of proposals for deployable Common Projects.

5.2.                
Methodology for comparing the options

The envisaged alternative delivery mechanisms
will be assessed in a qualitative manner pursuant to the following methodology.
The first axis of comparison between these
options focuses on:
-       
Their ability to reach the operational, specific
and general objectives as defined above (effectiveness)
-       
The degree of conformity between objectives and activities of the ATM Master
Plan and the activities of the instrument underlying the option (relevance) and
-       
Their ability to achieve results at reasonable costs (efficiency) and 
-       
An assessment of risks.
The second axis of comparison, in the case of a
PPP (options 2 and 3) will consist in a complementary assessment checking to
what extent the following Horizon 2020 eligibility criteria are fulfilled[29]:
 Box 1: Eligibility criteria of Horizon 2020 Existing joint undertakings may receive further support from Horizon 2020, based on the evaluation of certain criteria: 1.        They address Horizon 2020 objectives; 2.        They meet the criteria laid down in Horizon 2020: a)       the added value of action at Union level; b)       the scale of impact on industrial competitiveness, sustainable growth and socio-economic issues; c)       the long-term commitment from all partners based on a shared vision and clearly defined objectives; d)       the scale of the resources involved and the ability to leverage additional investments in research and innovation; e)       a clear definition of roles for each of the partners and agreed key performance indicators over the period chosen. Finally, in case of the extension of the SJU, an additional criterion applies requiring that it has shown to have made significant progress under the FP7. 
Cost-effectiveness of relevant qualitatively
assessed options is discussed in Chapter 6.

5.3.                
Comparing the options

The comparison of the options below
is proportionate to the scope of the problem identified.

5.3.1.          
Policy option 0: Collaborative research under
Horizon 2020

Horizon 2020[30] covers a wide range of activities
and different participation rules may apply to different parts of the
programme. Its operational aspects are currently being finalised, so for the
purpose of this evaluation, when referring to Horizon 2020, the procedures and
rules from the 7th Framework Programme for Research (FP7) are used.
Under FP7, for the R&I programme in transport, the European Commission
announces annual "work programmes", which include the schedule of the
"calls for proposals" that will be published during the year. Each
call for proposals covers a specific research area. Proposed projects are
submitted by consortia made up by a range of actors,
from industry and academia, coming from a minimum of three different Member States or associated countries. The Commission selects the
best proposals and awards financial support to the projects. The conditions for
granting the EU financial support is governed through grant agreements with
each consortium. The Commission or a delegated Agency manages these grant
agreements.
First axis of
comparison
Effectiveness
The development
of new ATM capability at low/medium Technology Readiness Level[31] (TRL) would
be effective under Horizon 2020. However, a wide range of technologies would be
generated through a number of non-coordinated individual projects or a set of
individual projects which are subject to the process of open calls for
proposals. In the short-term, these projects would not be of substantial
contribution to the implementation of the ATM Master Plan, which would
inevitably incur a delay in its achievement. 
Besides the low success rate of calls for
proposals (in Framework Programmes, a proposal has a 20-30% chance in
succeeding in receiving a grant), there is a very high level of uncertainty on
how much the results of stand-alone and low/medium TRL projects will be further
developed and integrated in R&I to actually lead to deployment. 
Another issue is how the results obtained in
individual projects would be collected, analysed and processed within EC
project management structures to ensure that they feed in the ATM Master Plan.
This is a demand that goes beyond the current approach to European research and
innovation within the Commission and would therefore require gathering
expertise and skills for this new task. Again, there is a risk that building up
the resources to answer this demand would delay achieving the ATM Master Plan. 
This option potentially holds an accumulation
of delays at different levels such as the coordination of results, the
development of technologies and the preparation for deployment. It is
estimated, for the purpose of the present analysis that these delays would
amount to 5 years compared to the current deployment plan of the SESAR concept.
Timing and risk assessment are key issues here
for the industry. If the research results are not sufficiently tested,
validated and demonstrated, they will not be incorporated into the next phase
of the product development leading to a delay in their implementation.
Furthermore, the responsibility for the
maintenance of the ATM Master Plan would need to be reassigned. 
Relevance
Under Horizon 2020
the industry and research stakeholders can provide their input through various
consultation mechanisms and platforms, but do not formally decide on the
content of the work programmes. The EC would have to strive to develop work
programmes and design calls that respond to the ATM Master Plan demands. This
would inevitably take time and, given the complexity of the issues at hand and
the need for a coordinated network approach in the R&I, activities are
unlikely to follow the ATM Master Plan’s rigorous timing.  
Efficiency
Assuming that the work programme is aligned
with the ATM Master Plan as best as possible, the Commission would still need to provide substantial
efforts to accompany and coordinate the development process with the industry
to ensure the continuity because of the number of projects and because of the
uncertainties in terms of results and the elusive link between research results
and deployment.
Also, the costs of winding down the SJU would
need to be added to the costs incurred in programming, managing projects and
activities within Horizon 2020, which show that this option is far from
efficient in terms of financial and organisational means. 

5.3.2.          
Integration of EU coordination and concentration
of ATM R&I in Eurocontrol (Option 1)

Eurocontrol is an intergovernmental
organisation made up of 39 countries, including the 27 EU Member States and the
European Union. Founded in 1960, it is a civil-military organisation that has
developed into a vital European repository of air traffic management
excellence, both leading and supporting ATM improvements across Europe. Eurocontrol is committed to the SES, is founding member of the SJU and plays a
leading role in several SESAR work packages (e.g. ATM Master Plan maintenance).

Under this scenario, Eurocontrol would take
over the coordination of the all remaining activities of Step 2 and of all the
activities of Step 3 as defined in the ATM Master Plan. This new role would
need to be aligned with the existing high level agreement[32]
defining the collaboration between Eurocontrol and the European Union. The
management of EU funds by Eurocontrol would demand a delegation agreement pursuant
to the financial rules of the Commission.
First axis of comparison
Effectiveness
Considering the need for strong governance in
ATM R&I and for continuity, Eurocontrol would have to be able to take over
very smoothly during the overlapping period 2014-2016 and ensure the buy-in and
commitment of all stakeholders in a similar manner as the SJU. This implies
setting up dedicated cooperative decision and management processes, to
concentrate and coordinate all ATM R&I in Europe. The feasibility of
setting up such arrangements would need to be adapted to Eurocontrol's
governing rules and regulations, which are in some aspects substantially from
the EU internal control and management framework (no audit from the European
Court of Auditors, no reporting to the budget authority ...). 
A delegation agreement under the Financial
Regulation would need to be established between the EC and Eurocontrol to
provide a clear cooperative framework to manage EU R&I funds. However,
because this approach implies the delegation of authority to Eurocontrol, such
a framework has little flexibility and requires a complex process to certify
Eurocontrol’s accounting and management systems and a substantial
administrative effort to follow-up and monitor the implementation of the
agreement. Moreover, the current rules governing Eurocontrol do not allow it to
manage grants.  
Relevance
Considering SESAR's future development
activities, a conflict of interest could stem from Eurocontrol's role as a
coordinator of R&I activities and its involvement in their implementation.
Moreover, Eurocontrol has expressed its interest to continue its participation
in an extended SJU as founding member[33]. This confirms that, while
Eurocontrl considers participating to the extended SJU subject to the agreement
of its governing body, they do not express the will to act as implementation
instrument of the SESAR programme. Considering all the aforementioned elements,
this does not appear a viable option to further explore. 
Efficiency
The overlap period
(2014 – 2016) between Eurocontrol's take over and the end of the SJU activities
would challenge the principle of single governance for the SESAR project and
necessitate coordination efforts to steer the development processes of the SES
technological pillar. This leads to the conclusion that a seamless transition
from the SJU to Eurocontrol would be costly in financial and organisational
terms and would jeopardise the timely delivery of the ATM Master Plan
objectives. In addition, Eurocontrol has not established assurance systems such
as those in place in the EU and in the SJU, such as ex-post project audits and
assurance activities, value for money audits, etc. which will require the
establishment of new activities and know how before being effective.
Here as well, the costs of winding down the SJU
would need to be added to the costs incurred in organising the coordination
efforts, managing projects and results, with an obvious negative impact in
terms of financial and organisational efficiency. 

5.3.3.          
Contractual PPP (Option 2)

Under FP7, research contractual public private
partnerships (cPPPs) are effectively new cross-thematic programmes in that they
bring together research topics from different themes. They differ from the
standard FP7 Co-operation programme themes in the engagement of both the
industry and the Commission in the preparation of the annual work programme and
call formulation, and in the 
co-ordinated multi-theme nature of the calls. So far, cPPPs have produced
multi-annual roadmaps aligning research topics to the
current needs of their respective industries and focussing on outcomes which
could result in market available systems within 3-5 years. The emphasis here is
on the speed of delivery to the market, which is regarded by industry as a highly
beneficial aspect of the research cPPP actions[34]. 
However, in the existing cPPPs, the Commission
– industry partnership is not officially formalised, which would prevent a
SESAR cPPP to take ownership of the ATM Master Plan. These partnerships differ from
the current Joint Technology Initiatives (JTIs) in that they use the standard
FP7 rules, facilitated for a fast start-up and short implementation time. The Commission services launch calls for proposals and manage
projects in the framework of successive annual work programmes following the similar
procedures as under collaborative research (Option 0). 
First axis of comparison
Effectiveness
In terms of development of technologies, this
option could provide good progress. Nonetheless, the technological breakthrough
and new concept of operations necessary to implement the ATM Master Plan are complex
and demand a coordination that goes beyond prioritising R&I activities (upstream).
If there is general consensus that the coordination between the Commission and
industry in cPPPs has led to better defined objectives in multi-annual
roadmaps, simplification[35] and brought together a wide range of
industrial stakeholders[36], this cooperative approach would here
need to be taken further to integrate R&I results and achievements,
demonstration projects, as well as making the link with deployment (downstream).
As the standard rules for calls for proposals apply here as well, the arguments
developed above for collaborative research (option 0) in terms of results
coordination also apply. The cPPP's would therefore include an effective
results management, linked to the ATM Master Plan adaptation process and the
preparation of deployment. Whatever the set up created, this would undoubtedly
cost time and resources.
Relevance
A certain level of coordination with the ATM
Master Plan could be expected from the cPPP, although the commitment of the
private partners to the research agenda outlined in the ATM Master Plan and to
the SES would have to be formalised, as cPPPs governance arrangements have so
far been developed on an ad hoc basis. It would also be advisable to broaden
the industry-Commission association to a representation of ATM users and
service providers in an adequate governance structure, to prepare effectively
the deployment process. 
Efficiency
The ATM Master Plan is a long term plan
requiring robust planning of public and private funds to keep R&I
activities on track. The private partners involved in cPPPs cover the costs of
their internal governance and their participation in research programming
activities and potentially in research projects, activities being project based
funded from a variety of sources. This endangers a comprehensive programmatic approach
that the ATM Master Plan demands and that can guarantee the industry longer
term commitment. 
And here as well, the costs of winding down the
SJU would be added to the costs incurred in setting up a new cPPP, programming
activities and managing projects, activities and possibly results within
Horizon 2020. This of course impacts negatively on this option's efficiency in
terms of financial and organisational means. 
Second axis
of comparison
As far as Horizon 2020 criteria for cPPPs are
concerned:
·       
EU Added value: Member States or private
stakeholders would not be able, by themselves to leverage and pool together
resources, coordinate and steer at EU level SESAR research and development
activities towards deployment and actively involve stakeholders. Furthermore,
the involvement of the EU will guarantee that the Commission represents the
public interest and has the institutional responsibility to drive the process
of implementing the SES exercising regulatory and oversight functions. The
Commission’s leading role in bringing the aviation stakeholders to cooperate and
rationalise their resources for modernising ATM, while preserving their driving
role, will allow better use of EU and private resources. This will also
guarantee coherence of the modernisation of the European ATM system and fair competition on the ATM market. EU intervention in
the development of SESAR technologies and procedures will ensure that the EU
ATM infrastructure is more strongly driven by European objectives and network
benefits.
·       
The scale of impact on industrial
competitiveness, sustainable growth and socio-economic issues are likely to be reduced as the time to set
up the cPPP could cause a delay
in reaching targets, hence reaping markedly less benefits (as explained in macro-economic impact of
SESAR study[37]).
·       
The long-term
commitment from all partners based on a shared
vision and clearly defined objectives would need to be carefully defined, as governance arrangements within cPPPs have so far
not been formalised, as opposed
to Joint Technology Initiatives. 
·       
The scale of resources involved and the ability
to leverage additional investments in R&I: so far, cPPPs have been project
based funded, following FP7 standard rules. This falls short of what the SESAR
project demands, i.e. a guaranteed commitment from partners, in cash and in
kind, with the clear objective of finalising the ATM Master Plan activities.

5.3.4.          
Extension of the SJU (Option 3)

In this option, coordination and programmatic
responsibilities are executed through an existing EU body with a focus on
developing and validating SES performance compliant technologies and
procedures.
First axis of
comparison
Effectiveness
Within the SJU, all relevant stakeholders are
involved in decision making processes and share responsibilities. The extension
of SJU would enable stakeholders to strengthen relationships with centres of
excellence and deepen strategic partnerships. It would seek relationships with
partners with specific expertise as needs arise. Additionally, the link with
the market is strong here, as suppliers are part of the SJU membership, which in
the context of the timely deployment of SESAR may bring a definite advantage in
setting up the needed demonstration activities.
The partnership and large scale projects are
built around the SES objectives and according to the ATM Master Plan. The
coordination, programming and execution of the SESAR related R&I and
validation activities are the SJU's responsibility. This ensures continuity and
avoids fragmentation of R&I through the single governance structure
supported by an effective decision making process, reactive to the needs of
R&I phases. Mutual interdependencies and coordination mechanisms between
participants and projects and coherence with overarching European concept exist
and the system architecture is ensured through multilateral contractual agreements.
Additionally, this option allows the overall management
and monitoring procedures of the partnership assessing its effectiveness to be
underpinned with monitoring processes at each activity or project level. This
second layer of monitoring includes regular reviews that ensure that, in all
projects, risk mitigation action plans are on track and effective. 
By
focussing research and development activities on deployment and actively
involving stakeholders, the SJU provides an optimal response to the needs of
the airspace users and service providers. However, it is important to ensure
that the SJU will deliver the expected results on time to reduce risks for the
deployment phase. 
Furthermore,
by undertaking the public-private partnership approach at EU level, it is
possible to ensure that the SES objectives of high societal relevance such as
safety and decarbonisation are integrated and internalised in the Programme.
This approach has allowed leveraging and pooling funding and know-how and
reducing fragmentation created by similar national and regional projects, harnessing
the skills and innovation capacity of the private sector within appropriate
risk sharing arrangements.
Relevance
The existing SJU structure and the single
governance supported by active decision making is adapted to the needs of
R&I phases, which reflect the evolution of the ATM Master Plan. This close
follow up of the ATM Master Plan is also reflected in the fast reactivity of
this implementation instrument through continuous monitoring, feedback and
update of the three interconnected processes undertaken by the SJU (see Figure
3) to fully integrate the 3 interrelated processes of the SESAR project and
where projects are not a stand-alone initiative but rather interconnected. 
Efficiency
The SJU has well established governing and
management processes that may need to be adapted, taking into account the
experiences and lessons learnt, but not completely redefined. Since this option
has the biggest innovative impact, transferring new ATM technologies from lab
into products in the short timeline of the ATM Master Plan, it enhances the
overall effectiveness of public funding and improves the risk to opportunity
ratio for the industry investment. In this context, this option addresses adequately
the timely deployment of SESAR.
Second axis
of comparison
The compliance of the SJU with the Horizon 2020
criteria for existing PPP under FP7 is demonstrated below: 
–       
The extension of the SJU addresses Horizon
2020 objectives: the need for innovative ATM
technologies is recognized by Horizon 2020, as it stresses that innovative ATM
technologies should contribute to a step-change in safety and efficiency with
rapidly increasing demand, to improve punctuality, to shorten travel-related
procedures at airports and to achieve resilience in the air transport system[38].
Equally, the implementation and further development of the SES should be
supported with solutions for increased automation and autonomy in ATM and
aircraft control, better integration of air and ground components, and novel
solutions for the efficient and seamless handling of passengers and freight
throughout the transport system. In the context of SESAR development, the SJU
fully addresses the H2020 objectives.
–       
The EU added value of action at EU level: see previous option. Also, EU action is clearly justified in the
context of the SES policy and regulations, the general objective being to
eliminate internal market barriers in the skies. Prior to the SES policy,
progress towards efficiency, cost effectiveness, positive environmental impact,
etc. in aviation had been slow, which was partly attributed to an unsystematic
approach. Consequently, as SES policy is as valid now as it was when first set
up, the leading role of the EU within the SES policy is as essential today as
it was then. The SES policy addresses issues that go beyond national and
industry sectors interests or indeed beyond their remit. Therefore, on their
own, Member States, as well as industry sectors, will not be able to address
the above mentioned problems. Aviation is a truly European and international
market that requires common solutions in terms of policy, but also from a
technological (interoperability) and business perspective.  
–       
The scale of impact
on industrial competitiveness, sustainable growth and socio-economic issues: to stay at the forefront of global
competition with a strong technological base and industrial capabilities,
increased strategic investments in ATM research and innovation development are
required. The successful mastering and deployment of enabling technologies by
European industry is a key factor in strengthening Europe’s productivity and
innovation capacity and ensuring Europe has an advanced, sustainable and
competitive economy, global leadership and ability to develop effective
solutions to societal challenges. The European ATM manufacturing industry is
still mostly organised on a national scale, where systems are produced
according to local requirements. This has resulted in the fragmented situation
currently existing, in very high unit costs and in scarcity of funds to invest
into technological innovation. These conditions undermine ATM industry
competitiveness at a global scale, where the USA competitors – e.g. – can
benefit of higher public funding and one single, large market.
According to a study
carried out in 2011[39], and subject to the timely delivery
of the R&I results, the deployment of SESAR could bring substantial
economic, social and environmental benefits with an estimated impact of €428
billion. By pooling resources, involving all ATM stakeholders, properly
managing conflict of interest, the SJU ensures the accomplishment of the SESAR
Programme, which is essential for the achievement of the SES goals (see section
2). 
Furthermore, the SJU
has enabled the EU to enjoy today a strong position on the
international scene and has become a recognised reference in the domain of
modernisation of ATM systems, allowing the EU to have a strong voice also in
standardisation bodies.
–       
The long-term commitment from all partners
based on a shared vision and clearly defined objectives: the SJU today is composed of 2 founding
Members and 15 Members representing all ATM stakeholders: military, airspace
users, ANSPs, manufacturing industry, airports, staff associations, scientific
institutions. In addition to that, the SJU involves 18 Associate Partners of
the SJU Members and 8 Associate Partners of the SJU, performing activities that
complete the Programme. 
During a public
consultation held in 2012, current Members have unanimously expressed their
support to an extended SJU, thus showing a long-term commitment to the SESAR
programme to reinforce its contribution to the SES policy, as its technological
pillar, to continue working with the objectives of bridging the gap between ATM
R&I and industrialisation and of contributing to addressing the challenges
with regard to SESAR deployment. 
–       
The scale of resources involved and the
ability to leverage additional investments in R&I: currently, the SJU manages an investment
of €2.1 billion over the period covered by the current Multi-Annual Financial
Framework (2007-2013). Each founding Member is providing €700 m, an additional
€700m is provided by industry.
The nature of the
SESAR programme is such that it requires a large federated effort over a
certain period of time. As regards the return on investment, it can only be
measured on the medium and long term, considering the historical implementation
in the ATM sector.
In managing the
development phase of the SESAR programme, the SJU support a large-scale
multinational research activity. It brings together private and public partners
to define common objectives to combine funding and knowledge in order to fulfil
those objectives that will have impacts of societal relevance.
Cooperation between
private and public partners at European level can yield significant added value
by creating incentives for increased spending in ATM R&I. By joining
forces, industry can accomplish far more than by doing it alone.
More specifically,
Integrated Flight Trials and Demonstration Activities can be quoted as an
example of key component in the R&I cycle, as they bridge the gap between
development and deployment, showing on a large scale the benefits of the
Programme in day-to-day operations and build confidence on the SESAR outcomes
amongst ATM community.
–       
A clear definition of roles for each partners
and agreed performance indicator over the period chosen: it is expected that in the context of the implementation of the
SESAR Programme 2, some changes to the current Membership may occur. The SJU
Regulation includes the provisions for the establishment of the Membership, its
enlargement and changes, which occur through ad hoc public procurement
procedures.
In terms of
Programme Management, adequate mechanisms will be put in place in order to
ensure that the activities complementing the core partnership and Large
Demonstration activities are managed with the most appropriate approach. At the
same time the SJU will set up a single governance structure for the
coordination and concentration of the resources.
The role of the
different partners and the performance indicators will be the results of the
selection procedure that will be in place once the SJU extension is
established. As the SJU is operating as technological arm of the Single
European Sky, the performance indicators to which it has to contribute are
defined within the SES, which is currently the case.
–       
Progress under FP7 is evidenced by the Mid-Term Evaluation of the SJU (2010). In
accordance with Article 7 of the Regulation 219/2007, the Commission evaluated
the implementation of the regulation after three years, the results obtained by
the SJU, its working methods as well as its general financial situation. The evaluation
concluded that the SJU performed well both in terms of setting up and building
its organisation as well as conducting its designated tasks. More specifically,
the evaluation assessed the SJU's effectiveness as high as the SJU has produced
the required outputs and results, e.g. organising and coordinating activities
in accordance with the ATM Master Plan and the management of funding, the
mobilising of funds, the involvement of stakeholders, the involvement of SMEs,
the organising of technical work avoiding fragmentation.

5.4.                
Risk assessment

The risks associated with the options mentioned
in the previous section are mapped in Table 1. In the table, an event or a
series of events, which reduce confidence in the ATM Master Plan and
consequently may represent a potential obstacle towards the implementation of SESAR
and reaching the SES objectives are summarised along with the mitigation
actions that reduce the likelihood of each risk. 
Table 1 – Assessment of risks associated to
the SESAR implementation tool and mitigation measures.
 Risk || Description || Option impacted || Cause || Outcome || Probability || Impact || Mitigation 
 1 || Dispersed R&I activities across Europe of ATM System. || Option O Option 2 || • Lack of coordination, fragmentation of R&I activities and results,  • No involvement of R&I partners in planning nor in synchronisation of activities, • No commitment from stakeholders to political objectives (SES).   || • Delays in delivering performance targets and Master Plan, • Reduced of expected benefits, • No implementation of quick wins to solve blocking points. || High || Very negative: delay in performance delivery of the SESAR Concept; loss of confidence potential benefit of new system leading to users' reluctance to buy in. || • Establish appropriate governance and leadership within EC or Agency, • Implement performance based approach, • Develop partnerships between all actors, develop networks, • Involve all stakeholders in the decision making process, • Ensure adequate funding and correct mechanism for incentives, • Monitor the needs and business plans of all stakeholders and update ATM Master Plan accordingly, • Update H2020 work programmes  regularly to reflect the modifications of the ATM Master Plan. 
 2 || Implementation tool is too loose to ensure successful implementation of new ATM System. || Option 1 Option 2 || • Lack of ownership of the SESAR programme from the main users  (Airspace users, ANSPs, Airport operators), • High degree of R&I fragmentation, • Lack of coordination, fragmentation of R&I activities and results,  • No or little involvement of R&I partners in planning nor in synchronisation of activities, • Limited partnerships between stakeholders. || • Timely decisions cannot be made on the investment needed, • Delays on products delivery, • Reduced of expected benefits, • No implementation of quick wins to solve blocking points. • ATM Master Plan milestones are targets are not met. || High || Very negative: the SESAR programme does not deliver on time as governance structure cannot successfully execute the Master Plan. || Empower all network users who assess their commitment to the SESAR concept by involving them in the SESAR governance structure. 
 3 || Investment by key stakeholders cannot be secured. || Option O  Option 1 Option 2 || • Lack of long term financial commitment from policy makers leading to lack of long term financial commitment from the industry, • Overall costs exceed the anticipated  budget, • Long pay back periods typical to the sector. || • SESAR fails due to a lack of investment.   || High to very high || Extremely negative: the SES objectives are jeopardised. || • Ensure close coordination between R&I activities and performance targets, • Involve all affected stakeholders in the Master Plan process, • Set up sound and robust funding mechanisms. 
 4 || Shortcomings in meeting design and performance targets. || All || • Insufficient focus on Concept elements critical to providing expected results, • Unsuitable coordination structure, • Lack of integration of the performance based approach, • Technology and sub system based on incorrect/unclear system requirements, • Inability to manage R&I activities to ensure timely delivery of adequate products and solutions to meet the business needs of the users of the network, • Poor prioritisation of R&I activities leading to ineffective use of funds. • No appropriate process monitoring the implementation of SESAR performance , • Projects risk monitoring not systematic and ineffective, •  Stakeholders not committed to the SESAR programme,, • No enforcement mechanism to support the performance scheme,. || • Future European ATM system does not deliver the required performance improvements, • Required elements of the SESAR Concept are not addressed, • Refinement and rescheduling of activities increase costs,  • Additional costs leading to budgetary issues. • Multiple and heterogeneous targets, objectives, reporting, failure to deliver SESAR Concept,, • Increased delays in flights, • The European competitiveness and GDP will be  affected || High || Very negative: significant impact on SESAR delivery. || • Perform validation activities to identify critical steps from the start to allow the appropriate planning of the R&I activities. • Ensure that the SESAR Concept and associated R&I initiatives are updated in the event that R&I results do not sufficiently contribute to the performance targets. • Ensure that R&I activities develop mature equipment to enable timely development of ATM sub-systems. • Prioritise R&I activities to develop the adequate technologies. • Establish processes for coordination of R&I and standardisation. • Proactively manage and finance development of standards. • Provide early definition of performance requirements and assessment of future technology capabilities. • SESAR implementation tool geared towards performance delivery and monitoring achievement of performance targets, • Performance enforcement mechanism and systematic project monitoring processes in place. 
 5 || The regulatory framework is unable to support the implementation of the SESAR programme. [The time scale for the activation of the ATM Master Plan will depend on the SES regulatory agreement. However, this regulatory framework cannot be put in place without a clear agreement on the technology that will be used, specifying the roles and responsibilities of each actor. Technical and operational changes proposed by SESAR must be tested against the current SES regulatory landscape.] || All || • Lack of resources with the necessary skills and knowledge in the various actors involved, • Lack of information to identify the changes required to the regulatory framework, • Lack of coordination between the various political levels involved. || • Delay to the implementation of the SESAR Concept compromises the improvement in performance, • Regulatory fragmentation leads to the coexistence of several systems, which in turn incurs an increase in costs. || Medium || Very negative:  delay delivery of SESAR. || Early involvement of the regulator to facilitate the design of the regulatory framework and the appropriate set up of regulatory authorities. 

5.5.                
Summary of the qualitative assessment of the
alternative delivery mechanisms

Based on the
qualitative comparison of alternative delivery mechanisms in section 5.3, and
the risk assessment in section 5.4, the table below provides an overview of how
the different options perform.
 Option || Effectiveness ||  Efficiency   || Relevance   || Risks (H/M/L) || Compliance with Horizon 2020 criteria (+/neutral/-) || Overall Assessment 
 Baseline || - - || - - || - - || - - || + || - - 
 Eurocontrol || - || - || - || - || N/A || - 
 Contractual PPP || - || - || - || - || - || - 
 SJU || + + || + + || + + || - || + || + + 
Legend:
=                              : baseline or equivalent to
the baseline
+ to ++                   : low to high improvement compared
to the baseline
-
to - -                     : low to high worsening compared to the baseline
In light of the above, the qualitative
assessment of the proposed options shows that option 3, that is the extension
of the SJU represents the best option in terms of effectiveness, relevance,
efficiency and risks to continue coordinate ATM R&I beyond 2016. The SJU
also complies with H2020 criteria relating to existing joint undertakings
created under FP7.  

6.                      
Cost-benefit analysis

As mentioned in Chapter 5, the most relevant
option, the extension of the SJU (Option 3), identified under the qualitative
assessment is subjected to a cost-effectiveness assessment in comparison with
the baseline scenario (Option 0). First the benefits produced by each of the
two options are presented, then the costs associated with them and finally
costs and benefits are brought together to calculate the net benefits of each
option.

6.1.                
Benefits of Option 0 and Option 3

For the purpose of this analysis, the timely
delivery of the SESAR concept is taken as the benchmark for the benefits
assessment of each option. In section 6.1.1, the GDP impact of SESAR is
outlined and in section 6.1.2, the specific macro-economic impacts of each
option are examined.

6.1.1.          
Impact of SESAR on GDP

According to the study “Assessing the
macroeconomic impact of SESAR”[40] the timely, effective and efficient implementation of SESAR would
account for a cumulative positive impact of €419 billion on Europe's GDP over
the period of 2013 to 2030, in comparison with a scenario in which ATM is not
modernised. This includes:
·       
a direct impact of €171
billion (increased added value for direct players such as airlines, airports,
ANSPs, aircraft and avionics/ATM manufacturers); 
·       
an indirect impact of €108 billion (increased added
value for the suppliers of the direct players);
·       
an induced impact of €139 billion (increased
spending by employees who are directly or indirectly affected by SESAR). 
Moreover, according to the macro-economic model
used, any negative departure from the timeline for implementing SESAR set out
in the ATM Master Plan would put the mentioned benefits at risk. A 10-year
delay in implementing SESAR would lead to a reduction in economic benefits of €268
billion, compared to the SESAR on-time scenario.

6.1.2.          
Macro-economic benefits of the options

The study mentioned above assesses and
quantifies the economic, social and environmental impact of implementing SESAR
for Europe. Its results are based on an analytical and deductive approach to
understand how the operational and technological changes enabled by the SESAR
programme (i.e. improved services, more fuel efficient and energy optimised
point-to-point and more direct flight trajectories, minimum CO2
operations) will impact the various stakeholders directly or indirectly
involved in air traffic management.  
Based on the results of this study, the
macro-economic impacts for the two policy options can be estimated. This
estimation relies on the following assumptions:
·       
Discount rate: the values calculated for the
impact on GPD are discounted in order to reflect their net present value. As
recommended by the EU[41] and Eurocontrol[42], a discount rate of 4% is used.
·       
Air Traffic Forecast: in
the present assessment the traffic forecast used is the same as in the macroeconomic
study on SESAR of 2011[43],
i.e. an estimate of 16,09 million flights by 2030
(about 5% lower than the most likely scenario).
·        
SESAR implementation is on time under Option 3
(Extension of the SJU) as the SJU is currently on track, and as this option is
the best to avoid disruption of the present R&I momentum and preserve
concentration and coordination of the R&I efforts
Baseline (policy
option 0)
Based on the
qualitative analysis and on the results of the consultation processes, the
discontinuation of coordinated R&I focused on contributing to achieving SES
performance objectives would require longer development and validation
timelines. 
Following the discontinuation of the SJU and
the transfer of the SJU programme under Horizon 2020, it is expected that the
Horizon 2020 will have to develop additional absorption capacity of ATM
activities. As these activities previously managed and coordinated by the SJU
will require organisational, management and as well coordination efforts in
European ATM, it is likely that the handover will incur a delay in the
deployment of the new ATM concept and that delay is estimated of 5 years.
Consequently, assessing the macro-economic impact of the baseline scenario (on
GDP) should derive from the available data on the macro- economic impact of a 5
year delay. 
The data available on overall GDP impacts
envisage two scenarios: on-time deployment and 10 year delay. This gives the
possibility to construct an estimate of macroeconomic impacts for the years in
between. By extrapolating the difference in GDP between the two scenarios, we
obtain an estimate for the year in the middle, which represents a 5 year delay.
The graph below illustrates this estimate:
Figure 3: Comparison of Yearly GDP
Impact for SESAR on time vs. SESAR delayed 
►      

Policy Option 3: SJU extension and on
time deployment of new SESAR ATM system
In terms of impact on GDP, Policy Option 3 is
based on the scenario “SESAR on time” as shown in Figure 7 by the solid green
line.
The graph shows the
difference in benefits between the two options. The baseline scenario (solid
brown line) does not provide any benefit in the first five years, while Policy
Option 3 produces benefits as of year 2013. 
Based on our assumptions, these yearly values
are added to obtain the total benefits for the period up until 2035[44].
In this time frame, the baseline scenario reaches €264 billion in total
discounted benefits, while Policy Option 3 accounts for a total of €403 billion
in discounted benefits.
Table
3: Cumulative discounted benefits (in term of GDP) - € bn
 Policy Options Years   || Baseline Scenario || Policy Option 1 
 2028 || 100,41 || 208,31 
 2030 || 147,61 || 262,31 
 2035 || 264,36 || 403,11 

6.2.                
Description of costs

The following investment costs have been
identified for the purpose of this analysis:
·       
The winding down of the SJU,
·       
The transfer of ATM R&I efforts from SJU to
Horizon 2020,
·       
The R&I efforts to develop SESAR
(2014-2020),
·       
The investments in infrastructure (SESAR
deployment).

6.2.1.          
Costs relating to winding down the SJU

It is assumed here that for two years after
2014, the costs of the SJU will actually remain the same. The actual winding
down cost will actually depend on the SJU staff statutes, and those vary
widely.
For the purpose of this assessment, it is
estimated that the total cost of winding down the SJU is 
€6 million. This estimation is based on the current personnel cost of
the SJU[45], which it is assumed will undergo a
linear decrease to two thirds in 2017 and one third in 2018. The cost will be 0
from 2019 onward.
Policy option 3 considers an extension of the
SJU until 2024. We estimate the total cost of winding down the SJU after 2024
as the same as above. 

6.2.2.          
Transfer of ATM R&I efforts from SJU to
Horizon 2020: Collaborative research projects managed by EC

It is assumed here that Horizon 2020 takes over
the SJU work programme, and the following management and administrative costs
are based on FP7 data. It is considered that the operational costs associated
to the transfer of activities to Horizon 2020 would be €54 million spread over the period of 2014-2024. 
Indeed, according to the experience in managing
FP7, the EC has used €285 million to cover the management and
administrative costs for an overall FP7 Transport budget of €4.244 billion of EC contribution. This
means that the total costs for FP7 transport budget is €8.5 billion (considering an average EC contribution rate of 50%). Therefore,
the €54 million of administrative costs pertained to the transfer of R&I
activities to Horizon 2020 are found by extrapolating €1.6 billion (total costs of future SJU working programme) with €8.5 billion (FP7 working programme).

6.2.3.          
Costs relating to R&I efforts to develop
SESAR (2014-2020) 

Taking into account
the activities to be performed beyond the current SJU work programme a high
level exercise has been undertaken to provide the initial estimates of future
SJU costs. 
These estimates are
based on the following assumptions:
·       
the work to be
performed to achieve the ATM Master Plan targets. As already mentioned, this analysis considers the
completion of Step 2 and Step 3;
·       
the unit costs and
their structure based on the
costs of the current Members and Projects' composition;
·       
the breakdown between the different phases of applied and
pre-industrial research (i.e. V1/V2/V3) derived from the ongoing Programme;
·       
the level of horizontal activities is proportionally in line with the current Programme;
·       
implementation of
lessons learnt in terms of programme management, in
particular less complexity,
better prioritisation, simplification;
·       
maintain and foster Innovation and Scientific Excellence in Europe (LTR), bringing back the level of activities in
this stream of research to ensure that new ideas/research would have space and
opportunities to be adequately considered, while maintaining competitiveness
against other parts of the world;
·       
bridge R&I and Implementation through Large Scale Demos, in particular, with the extensive involvement of
different manufacturers of the airborne industry and Airspace Users and to
answer interoperability aspects.
The total estimated cost of these activities is
estimated to be €1.6
billion and is distributed along the different streams of R&I as
represented below:
·       
Exploratory research(V0) €100M =                  6%
·       
Applied research(V1-V2)
€742M =                 47%
·       
Pre-industrial
development (V3) €436M =        28%
·       
Large scale demos €300M =                            19%
As presented in section 2.2., the total costs (€1.6
billion) of the future SJU programme would be shared between the founding
members (EC, Eurocontrol and industry): €0,5 - €0,5 - €0,6
billion respectively. The SJU administrative cost is included and estimated at
5% of the total costs (€80 million).[46] [47] [48]
For the period of 2014-2020, representing 7
years of R&I activities, the annual average costs is expected to be €217
million. 
In the case that the SJU is not being extended
(Policy Option 0), the current R&I initiatives will continue to exist but
new initiatives will fall under Horizon 2020. We estimate the cost of EC
contribution at 50% or €108.5
million yearly for the same period.

6.2.4.          
Costs relating to investments in infrastructure
(SESAR deployment)

The SJU aims at
developing the new SESAR concept according to the Master Plan. It will prepare
the deployment of new technologies but the actual deployment is not under its
remits. The new ATM system must be adopted by the stakeholders. 
To calculate the cost
of investment in SESAR infrastructure, we start from the latest version of the
ATM Master Plan which contains a first estimate of the civil investment cost
for the relevant stakeholders up until 2030[49]. The total cost for the period
2014-2030 is estimated at about 
€22 billion. The estimation relates to Airspace Users, ANSPs and Airport
Operators and the infrastructure investment is due for any option.
When considering
Policy Option 3 the estimated investments of the revised ATM Master Plan are
used and considered being on time. In this estimation, about 60% (or €13.2 billion)
of the total investments has been done linearly up to 2024, the remaining investments (40%) are spread in a comparable way over
the period 2024-2030. 
As per the 5 years delay pertained to Option 0,
we assume investments follow a slower pace compared to Option 3. The level of
60% of the investment cost will be off-set five years later, i.e. in 2029. The
total period considered is extended to 2035 and the remaining 40% divided
in a linear way over 2030-2035.

6.2.5.          
Overview of total costs

In absolute terms, all costs are the same for
both options except for the transfer of R&I efforts which would incur
additional expenses under Option 0.
From the table below, it can be seen that total
costs for Option 3 is lower (€23.606 million) compared to Option 0
totalising €23.660 million.
Table 4: Cumulative total
costs  

6.3.                
Conclusion of the cost-benefit analysis

The costs and benefits associated with Option 3
(extension of SJU) are compared for the period 2013-2035 with those of the
baseline scenario, the transfer of ATM R&I activities under collaborative
research in Horizon 2020.
Table 4 summarises the cumulative benefits for
the period 2013-2035 for the two options. By 2035, benefits are lower for the
baseline scenario (around €264 billion) than for Option 3 (€403 billion).
The policy options have slightly different
costs associated with them, as described in the previous section. Cumulative
costs are the lowest for the Option 3 (€23.6 billion), while Option 0
expected costs are €23.66 billion. 
A cost-benefit analysis brings together the net
benefit value of each Policy Option. The table below shows the costs, benefits
and net benefits for both options.
Table 5: Costs, Benefits and Net
Benefits (in billions)
Clearly, as shown in Table 5, the costs
represent a small percentage (ranging from 9% to 6%) when compared to the
benefits. From these results, it can be concluded that policy option 3, i.e; an
extension of the SJU, is more attractive in terms of a cost-benefit analysis as
the net benefits are significantly higher.

7.                      
Future monitoring and evaluation

The future monitoring will be built according
to the performance framework ensuring that R&I activities are contributing
to the ATM Master Plan (see 4. Objectives and indicators). These monitoring
principles apply to the preferred option (Policy Option 3). 
The monitoring and evaluation build on existing
monitoring processes which include:
·       
Every three years from the start of the
activities of the SJU and at least one year before expiry of the tem of the JU,
the Commission will carry out evaluations on the implementation of the
Regulation.
·       
Annual and multi-annual work programmes to
inform the EC and possibly SJU members, alongside Annual Activity Reports,
including financial statements. Pursuant to Regulation 219/2007, the
Administrative Board, chaired by the representative of the European Union (i.e.
the Director General of DG Mobility and Transport), is responsible for
approving annual work programmes and activity reports. 
·       
Administrative Board meetings, in which SJU
reports to the EC and its members. The EC would continue to have appropriate
access to all committees and working groups established at all levels in the
SJU.
·       
Monitoring at SJU programme level. In terms of performance monitoring, the SJU produces a number of
reports which are collected from the projects via reporting templates and from
the SESAR Release Reports. The objective of the Programme monitoring and
reporting is to measure and compare results at different levels, from different
viewpoints and for various audiences.
·       
Monitoring of risks will also give specific
attention to the research phases (real time demonstrations with all possible
risks attached) and to the research areas.
·       
Specific monitoring for the large Scale demonstrations,
including organisation and monitoring of the results.

8.                      
Conclusions

The ex-ante evaluation for the extension of the
SESAR Joint Undertaking has been performed since its present set up does not
ensure continuity in coordinating all ATM related R&I efforts in the Union beyond 31.12.2016. 
A qualitative assessment of 4 alternative
delivery mechanisms of coordinated EU ATM R&I has been performed:
·       
Option 0 (baseline) - Collaborative research
projects under Horizon 2020;
·       
Option 1 - Integration of EU coordination and
concentration in Eurocontrol
·       
Option 2 - Contractual Public-Private
Partnership (PPP)
·       
Option 3 - Extension of the SJU
This qualitative assessment has shown that the
extension of the SJU represent the best option in terms of effectiveness, relevance,
efficiency and risks to continue coordinating ATM R&I beyond 2016. This option is also the most suitable in
contributing to the general objective of achieving the SES performance targets
through the timely deployment of the SESAR concept in accordance with the ATM
Master Plan.
The several sources - the Mid-term Evaluation
of the SJU (July 2010), the internet public consultation held from 25 July 2012
until 17 October 2012, and the two consultative workshops held on 02 October
2012 and 23 November 2012 - have contributed in drawing lessons from the past
and have given a valuable insight of stakeholders opinions. A very large majority of the stakeholders
considered that the SJU has delivered significant added value in the
realisation of the keys objectives and the extension of SJU beyond 2016 is
largely supported by the stakeholders. Also, the view was shared by
stakeholders that a non-extension of the SJU would cause a delay of close to 5
years in the realisation of the objectives of SESAR programme. 
The cost-benefit analysis undertaken in this
report compares the extension of the SJU (option 3) with the baseline scenario.
It demonstrates that for both options, costs only represent a small percentage
(ranging from 9% to 6%) when compared to the benefits. It concludes that policy
option 3, i.e. an extension of the SJU, would bring a better return on
investment.
This evaluation therefore concludes that the
extension of the SJU beyond 2016 is the preferred action.

ANNEX
1 – Results of mid-term evaluation, public consultation,
workshops, and lessons learned

Several sources indicate what has been learned
from the exercise of the "first" SJU: the Mid-term Evaluation of
the SESAR Joint Undertaking[50] (July 2010), the internet
public consultation held from 25 July 2012 until 17 October 2012, and the two
consultative workshops held on 02 October 2012 and 23 November 2012. 

SJU mid-term evaluation

The SJU mid-term evaluation concluded that the
SJU performed well during the 2007-2009 period, both in terms of setting up and
building its organisation as well as conducting its tasks. Although it was too
early to assess the overall programme efficiency of the SJU, progress made
during the evaluation period indicated that the Joint Undertaking / Public
Private Partnership model as a legal entity established under the EC Treaty[51] had proven
to be more effective and efficient to execute Community research and
development activities and demonstration programmes than if driven within FP7
R&D programme for which activities would be performed through calls for
proposals.
The SJU's key achievements noted by the
evaluation were:
·       
Gathering and committing stakeholders on a
common R&D programme;
·       
Developing the work programme that supports
rationalisation and consistency, avoiding gaps and overlapping;
·       
Developing the required methods and tools for
programme implementation;
·       
Initiating a number of projects within a short
timeframe without compromising on the quality requirements and needs for
coordination between work packages and projects.
The evaluation also notes some challenges
facing the SJU at the time. The first one relates to maintaining its capacity
to coordinate all work-packages and projects and validate the deliverables. The
second focuses on communication processes and instruments, which should be
further developed to meet the differentiated communication needs of the
founding members, SJU members and other stakeholders, members and non-members
of the Administrative Board. 

The public consultation

A total of 52 responses were received in the
frame of the public consultation on the potential extension of the SJU. 62% of
the total of respondents declared themselves as having an interest in air
traffic management and aviation. More than four in five respondents were
involved in the SESAR Joint Undertaking (SJU). There was a 71% - 29% split
between organisations (37 responses) and individuals (15 responses). Countries of residence most cited were Spain, Belgium, Germany, Italy and France. 
The main result of this public consultation is
that the vast majority of the respondents acknowledge that the SJU is
performing well and has had a positive impact on ATM R&I. The SJU is seen
as most influential in reducing fragmentation of ATM R&D efforts in Europe and logically in coordinating EU funded R&D in ATM and in technical progress on
new ATM solutions. A majority of respondents also see the SJU improving or
strongly improving the EU position in the global context of ATM modernisation
programmes.
The SJU is viewed as being clearly most successful
in three areas: ensuring the involvement of stakeholders of the ATM sector in Europe; guaranteeing the necessary funding for the development of the SESAR Project; and
organising and coordinating the activities of the development phase of SESAR. 
Although respondents identify the added value
of the SJU and its achievements in ATM R&I, a very large majority still
thinks that there is a continued need for EU intervention in the ATM area
(94%), and that the SJU should be extended under Horizon 2020 (81%). 
Respondents also mention improvement
possibilities, but opinions vary greatly on what should precisely be bettered.
Issues mentioned are e.g. the communication between and within stakeholders,
the simplification of procedures, top-down vs. need driven approach, the
use of existing ATM research facilities and networks. 

Consultation workshops

Two workshops were held in the frame of the
consultation process on the SJU extension under Horizon 2020. The first one
took place on 2 October 2012. It was aimed at organisations directly involved
in SESAR and gathered 28 participants from the manufacturing industry, ANSPs,
research institutes and universities, Eurocontrol, the SJU and the Commission.
Airports and airspace users were excused. The second workshop took place on 23rd
Nov. 2012. It targeted a wider public, and 56 participants from the aviation
sector, including airports and airlines attended.
In both workshops, participants were in
principle in favour of an extension of the SJU under Horizon 2020: the SJU is
working, its strong point being that it gathers all ATM R&D relevant actors
and manages well a productive, if complex, collaboration. Many supported a
request for additional financial means. There was a general agreement to keep
the focus on R&I activities, but it was suggested to include more large
scale demos. It was noted that the scope of activities of the SJU has already
broadened, e.g. they now include UAS, which was not the case at the beginning.
A point of discussion was the confusion between the notion of a legal extension
in time for the SJU and the timelines of the "SESAR project" as
defined in the regulation. Some have taken the progress along the timeline of
the SESAR project to mean that the SJU will in the next phase become involved
in deployment. It was generally agreed that improvements or changes in scope
and governance could be addressed within the frame of the current regulation. 
In the second workshop, the membership in
"SJU II" was discussed, and some participants expressed their interest
to re-commit for the next financial round. Should the membership application
process be reopened, the view was that it would benefit from past experiences
and be a quicker process. Discussions on financial needs and repartition were
not conclusive.

Annex
2 - Technological contribution to the SES

The institutional changes in ATM organisation
and operations brought about by the SES are not sufficient to achieve the full
implementation of the SES. These institutional changes need to be complemented
and supported by modern and harmonised technologies and procedures that will enable
greater punctuality, improve services and safety, optimise fuel consumption,
reduce CO2 emission and allow more direct flight trajectories.  The SESAR
project, through its definition, development and deployment processes, will
deliver a new and global interoperable concept of ATM where operations will be
built around a continuous sharing of data between aircraft, air navigation
service providers and airports (see Figures 4 and 5).
Figure
4: Current ATM concept
 
The future ATM system will rely on a network
communication environment based on datalink technology, as illustrated in
Figure 5.
Figure
5: SESAR concept of operations
 
Coordinated and focussed development of technologies
and procedures is at the heart of the ATM modernisation that will achieve the
SESAR concept (Figure 5). Coordinated and focussed development is also at the
heart of the interactive cycle that translates the needs identified in the
definition process into validated technologies and procedures that feed into
the deployment process (see Figure 3).
The current SESAR
development phase (2007-2016) is at full speed and has started to deliver
validated results for the first phase of deployment. As mentioned above, the
current work programme of the SJU covers Step 1 and part of Step 2 of the ATM
Master Plan. By 2016 the SJU
expects to deliver the totality of Step 1 and approximately 80% of Step 2.
Moreover, although the current SJU work programme broadly covers the full
R&I cycle, it mainly focusses on pre-industrial developments. Therefore,
the deployment of the SESAR concept still requires coordinated development and
validation activities to complete Step 2 and to fully address Step 3 of the ATM
Master Plan.
Now that the
deployment process is about to be launched, the balance of resources allocated to
the different phases of the R&I cycle could be reviewed to keep innovative
ideas flowing in. In particular, more efforts could be put into exploratory research, involving universities,
research establishments and SMEs through “Centres of excellence” and “Blue sky
research” activities. Large
scale demonstration activities focused on performance benefits, on conducting
integrated and coordinated advanced validation and on demonstration activities
showing readiness for deployment and for operational and/or technological
transition.
Lastly, as a future programme set from 2014 and
operating for up to 10 years cannot be fixed once at the outset, provisions
would need to be made to allow
promising results from exploratory research to evolve in applied research,
development and preparation for deployment thus accommodating an evolution of
the topics contributing to the SES.

ANNEXE
III: Contributions from Eurocontrol and from other members

As
reported on page 25 of the Provisional Annual Accounts 2012 of the SJU (see
attachment), this is the amount in terms of contributions received and
recognized by the SJU at the end of 2012. This means that the work performed by
Eurocontrol and the Other Members in 2012 in the form of in-kind contribution
is not included, but the information provided in the additional lines: 
Contributions
received and recognized/accepted by the SJU at 31 December 2012
   || IN CASH contribution (up to now) || Net IN KIND contribution (up to now) || Gross IN KIND contribution (up to now) 
 EU || 267 265 000 || - || - 
 EUROCONTROL || 75 044 910 || 102 560 441 || 102 560 441 
 MEMBERS || 12 739 085 || 121 833 258 || 243 666 516 
   Contributions
estimated to be received in 2012 and not yet recognized by the SJU
   || IN CASH contribution (up to now) || Net IN KIND contribution (up to now) || Gross IN KIND contribution (up to now) 
 EU || - || - || - 
 EUROCONTROL || 1 380 664 || 84 615 386 || 84 615 386 
 MEMBERS || - || 78 444 396 || 156 888 792 
Total
   || IN CASH contribution (up to now) || Net IN KIND contribution (up to now) || Gross IN KIND contribution (up to now) 
 EU || 267 265 000 || - || - 
 EUROCONTROL || 76 425 574 || 187 175 827 || 187 175 827 
 MEMBERS || 12 739 085 || 200 277 654 || 400 555 308 
 Total || 356 429 659 || 387 453 481 || 587 731 135 

Annexe
IV: Current evaluation and monitoring system

1. SJU Programme
Management Monitoring
The SJU Programme
Management Framework is organised around three main domains: “Initiation and
Planning”, “Execution and Control”, “Monitoring”. Both the SJU and Programme
participants act at various levels.
The “Monitoring”
domain covers all activities focussing on the measurement and monitoring of the
Programme. It is composed of:
-        
Progress reporting to monitor in a qualitative and
quantitative manner the progress and the forecast of the Projects, including
the status of their risks.
-        
System Engineering
Data Management to support
the production of deliverables by structuring and characterisation of system
engineering information using standard templates.
-        
Programme Management
Measurement to monitor the
SESAR solutions development, so that the necessary controls can be done and
deviations of targets can be identified with the aim to trigger corrective
actions when deemed necessary.
For the purpose of the
ex-ante evaluation, Progress reporting and Programme Management Measurement
will be further detailed below. As the “System Engineering Data Management”
specifically refers to the production of programme deliverables, will not be
developed further in this context, but more information can be found in the
Programme Management Plan.
Progress Reporting
To ensure proper
monitoring and control, the Programme collects and consolidates information
from Work Packages and Projects on their progress. The SJU validates the
progress of the overall Programme and initiates corrective actions on time,
effort and/or quality where necessary. 
The principle of
reporting on the progress of the activities is established in the MFA; the
content of the reporting is detailed in the following section.
Content of the
reports
-        
Accurate effort
consumption report at the Project level (quarterly basis) 
Every quarter, SJU Members report accurate actual effort consumption to
date at the Project level (for both completed tasks and work in progress) to
the SJU. This report is used as an indication of the level of effort an
organisation has spent on each Project.
-        
Interim / Final
Financial Statements (yearly basis) 
Each year, every Member shall submit the Interim Financial Statements
including the eligible costs incurred for the Projects during the financial
year. 
-        
Project Progress Report
(quarterly basis) 
Each R&D Project is subject to monitoring and control by the SJU with
an objective to steer the Programme towards achieving the SESAR objectives.
This is based on periodic Project progress reports, which cover the following
parts:
·       
A summary status which
gives an executive statement on the progress made and key issues;
·       
Achievements made in
the last reporting period, i.e. milestones, control gates, and key data on
tasks;
·       
Completion status per
the task level;
·       
Top 5 risks in order of
criticality and/or priority;
·       
Significant issues
(classified as “Amber”) or gross deficiencies (classified as “Red”) for the
successful outcome of the project, with their status and corrective actions;
·       
Main targets and events
over the next reporting period.
-        
Work Package Progress
Report (quarterly basis) 
The Work Package Progress Report provides information, under the form of
a set of indicators, covering the following topics:
·       
Status of completion
against plan,
·       
General status of
dependencies between projects 
·       
Level of risk (net
criticality),
·       
Status of issues and
relevance of action plans,
·       
Status of change
requests impacting the Project,
The Work Package
Leader, responsible for the specific Work Package, is expected to comment on
these indicators and to set up action plans to mitigate risks for Projects with
negative indicators. 
-        
Interim Project Report
(in principle once a year) 
The Interim Project Report provides an update on: 
·       
The objectives of the
Project, an overview of the work towards these objectives including 
o       a detailed status of the Deliverables in
the reporting period, 
o       foreseen activities within the next planned
reporting period, 
o       identified risks and issues, and related
actions with their completion status, 
o       the achievement of the Deliverables and an
explanation of the discrepancies between the planned and the actual work
carried out in the Deliverables in the reporting period;
·       
A specific section on
the potential contribution of the Project to the development of new Standards
and Norms Proposals in the Project as the case may be;
·       
An estimate of the
effort consumption within the reporting period;
·       
A publishable summary
of the first point hereinabove.
Reporting calendar
The reporting calendar
is as follows:
-        
Actual effort
consumption at the Project level: preferably by the end of third week of
January, April, July, October and in any case not later than end of third week
of February, May, August, November;
-        
Interim / Final
Financial Statements: in the beginning of year following financial year (as
defined in the MFA);
-        
Interim Project Report:
4 weeks before the Project Control Gate;
-        
Project progress
report: end of second week of January, April, July, October;
-        
Work Package progress
report: end of last week of January, April, July, and October.
Programme
management measurement
The SESAR programme is
monitored so that the necessary controls can be done and deviations of targets
can be identified with the aim to trigger corrective actions when deemed
necessary. 
There are different
domains of measurements (see further in this section) which are done at
different levels (Programme, Release, Validation Exercise, Project,
Deliverables etc.), from different viewpoints (organisational breakdown, work
breakdown, operational breakdown) and in function of various programme
participants and stakeholders.
Historical
measurements are stored and used to monitor trend information over a period of
time. The frequency of performance measurement and reporting depends on the
type of information needed and is characterised by its availability and
frequency of its update.
The measurements are
consolidated in dashboards. Each dashboard is supported by detailed reports
that have as main objective to facilitate the understanding and ease problem
investigations.
Monitoring the
Programme execution
To monitor the
execution of the Programme, the SJU measures the actual progress achieved
compared to the planned progress and this is done by monitoring. For example,
it calculates the level of completeness, it assesses the milestone
achievements, checks the actual delivery rate of deliverables and the actual
level of consumption of resources.
Monitoring the
quality of deliverables
To monitor the quality
of deliverables of a specific project, the SJU assesses those deliverables
against a set of satisfaction criteria. Measurements used for this domain are
the following:
The number of
deliverables per assessment status, which shows how the quality of deliverables
is assessed,
Compliance of the
deliverables with the SJU Satisfaction criteria, which refines the
understanding of the quality of the project deliverables.
Monitoring of project
management
To monitor the overall
quality of the project management and the especially the compliance with the
SESAR programme management plan, the SJU monitors:
Project and WP
quarterly progress reports,
Project management
compliance against a set of criteria. This includes the follow up and well
execution of corrective actions, where necessary.
Project dependency
synchronisation status, which shows how the projects relate to each other.
[1]               Council
Regulation (EC) 219/2007 of 27/02/2007
[2]               ATM is the aggregation of
the airborne and ground-based functions (air traffic services, airspace
management and air traffic flow management) required to ensure the safe and
efficient movement of aircraft during all phases of operations.
[3]               Eurocontrol
equally provides a third of
the funding (€700 million) and the remaining third (€700 million) is provided by the other 15 members. While the EU
contribution is in cash, Eurocontrol and other industry members’ funding
comprises both cash (minimum 5%) and in-kind contributions.
[4]               Adoption
of the SES regulations. The initiative was launched through a Communication in
1999 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:1999:0614:FIN:EN:PDF and
followed-up with a High-Level Group in 2000. http://ec.europa.eu/transport/modes/air/single_european_sky/doc/ses1_2000_hlgr_report_en.pdf 
[5]               The high level objectives of
the SES to be met by 2020 are to increase safety by a factor of 10 and reduce environmental
impact by 10% per flight, to triple the current capacity and to reduce by half
the costs of ATM services. These
objectives are coherent with the "Vision 2020" goals established in
2001 by the "Group of Personalities" for European aeronautics
research  (http://ec.europa.eu/research/growth/aeronautics2020/pdf/aeronautics2020_en.pdf) and operationalized by the European Technology Platform ACARE
(Advisory Council for Aeronautics research in Europe) in the Strategic Research
Agenda http://www.acare4europe.org/documents/rarchive
[6]               See Annex 2 of this report.
[7]               The
European ATM network consists of hundreds of air traffic control sectors
operated by more than 60 air traffic control centres where more than 16,700 air
traffic controllers manage the traffic from/to 450 European airports and also from
and to third countries. This complex structure manages more than 26,000 daily
flights in the EU, accommodates approximately 38,000 daily flight hours and
operates on a network of aviation routes optimised at national level but not
yet at European level. See Report from the Commission to the European Parliament on the
implementation of the Single Sky legislation: time to deliver, COM (2011) 731 final, 22.11.2011
[8]               IFR
: Instrument Flying Rules
[9]               Industrialisation refers to the
standardisation and certification activities and the large-scale production by
the ground and airborne equipment manufacturers. Implementation consists in the
procurement, installation and putting into service of equipment and systems,
including associated operational procedures, carried out by operational
stakeholders.
[10]             Regulation (EC) 550/2004, Article 15a.
[11]             https://www.atmmasterplan.eu/
[12]             http://www.sesarju.eu/players/partnership
[13]             Council Regulation (EC) No
219/2007
[14]             http://ec.europa.eu/transport/facts-fundings/evaluations/doc/2010_sesar_mid_term.pdf
[15]          The EC Treaty
provides for the possibility to establish Joint Undertaking (Art 171, now TFEU
187). The Joint Undertaking (JU) is the legal entity constituting the framework
for the JTI activities. Each JU is adapted to the specificities of each JTI.
[16]             See appendix III for more
details
[17]             Resilience
is the intrinsic ability of a system to adjust its functioning prior to,
during, or following changes and disturbances, so that it can sustain required
operations under both expected and unexpected conditions. Since humans are
indispensable in all situations involving change, Resilience naturally has
strong links with Human Factors and Safety Management.
[18]         COM(2011) 811 final - Proposal
for a Council decision establishing the Specific Programme Implementing Horizon
2020 - The Framework Programme for Research and Innovation (2014-2020).
[19]             SEC(2011)
1427 final
[20]             The amounts referred to in
this paragraph include both operational and administrative appropriations.
[21]             During the period 2007-2013,
the EU contribution to SESAR JU was financed jointly by FP-7 and by the TEN-T
budget. This will no longer be the case for the period 2014-2020: as far and
R&I is concerned, the Connecting Europe Facility, the successor programme
for TEN-T programme, will only be allowed to finance deployment activities.
[22]             All the figures mentioned here
are subject to the finalisation of the 'Smart, green and integrated transport'
societal challenge envelope in Horizon 2020. They are in current prices (2011)
and include operational and administrative appropriations.
[23]          COM(2011)
809 final.
[24]             Regulation (EC) 549/2004,
Article 5.1.
[25]             The European Roadmap for
Sustainable Air Traffic Management – European ATM Master Plan (Edition2),
SESAR (Oct. 2012), p. 17.
[26]             Ibid.
[27]             The
ATM Master Plan establishes for each of its three concept steps the associated
SESAR performance targets contributing to the overall SES high level goals. Step 1 targets have been agreed, Step 2 targets are to be refined,
whereas Step 3 targets are still to be defined. Step 1 and most of Step 2,
whose R&D activities should be completed by end 2016, will only contribute
partially to the SES performance targets. A significant part of the SESAR
improvements required to meet the SES performance targets by 2020 is expected
from Step 3.
[28]             The European Roadmap for
Sustainable Air Traffic Management – European ATM Master Plan (Edition2),
SESAR (Oct. 2012).
[29]             COM(2011) 810 final
[30]             http://ec.europa.eu/research/horizon2020/index_en.cfm?pg=h2020
[31]             Scale
of TRL ranging from 1 to 9: TRL1 expresses the technology readiness of basic
principles and observed (exploratory and applied research) up to TRL9 a
successful operational experience which is fully tested, validated and
demonstrated in its operational environment. Next step would be industrial
deployment.
[32]             COM (2012) 0438 final
[33]             Letter
of 12 October 2012 from Eurocontrol’s Director General to the DG MOVE Director
General
[34]             Interim assessment of the
research PPPs in the European Economic Recovery Plan, European Commission
(2011).
[35]             Ibid. 
[36]             Partnering in Research and
Innovation, COM(2011) 572 final.
[37]             Assessing the macroeconomic
impact of SESAR (2011)
[38]             Resilience
is the intrinsic ability of a system to adjust its functioning prior to,
during, or following changes and disturbances, so that it can sustain required
operations under both expected and unexpected conditions. Since humans are
indispensable in all situations involving change, resilience naturally has
strong links with human factors
and safety management.
[39]             Assessing the macroeconomic
impact of SESAR,
SESAR Joint Undertaking (2011)
[40]             Assessing the macroeconomic impact of SESAR (June
2011) - http://www.sesarju.eu/tags/macroeconomic
[41]             EU Impact Assessment Guidelines (2009).
[42]             Standard Inputs for EUROCONTROL Cost Benefit
Analyses (2012).
[43]             Assessing
the macroeconomic impact of SESAR, (June 2011) - http://www.sesarju.eu/tags/macroeconomic
[44]             Cumulative discounted benefits
are increasing (for the period 2013- 2030) but with a decreasing annual growth
rate. We suppose this reduction is confirmed for the period 2030 - 2035 (i.e.
annual growth rate fall at a rate based on average of past decrease).
[45]             Budget 2012, SESAR
Joint Undertaking (Dec. 2011)
[46]             As reported on page 49 of the
Provisional Annual Accounts 2012, according to the budget, the administrative costs
of implementing SESAR currently amount to 37.3 million EUR, representing 2.5%
of the operational costs. It is expected that by the end of the Programme the administrative
costs will reach around 5% of the operational costs as planned and
contractually established.
[47]             As regards building costs, as
reported on page 41 of the Provisional Annual Accounts 2012, the annual full
cost of the SJU premises – including guard services, cleaning, insurance, taxes
etc are around EUR 0,9 million per year. The SJU rental contract is construed
in a manner to allow the SJU to continue using the current premises, or to
terminate its use in the case of non-extension.
[48]         SESAR JU currently employs 42 FTE of which
27 temporary agents, 4 contractual agents, 7 seconded form Members 1 seconded
from Eurocontrol and 3 national experts. In addition, as part of its
contribution in kind – included in the amounts reported in annex III,
Eurocontrol has out-posted at the SJU premises a Unit dedicated to the SESAR
Programme of maximum 20 FTE, the Programme Support Office (PSO). At the end of
2012, 16 FTE were part of this unit. The extension of the
SJU will require maintaining the current staffing level to ensure the adequate
implementation of the Programme 2. It is possible that during the 2014 – 2016
period ad hoc additional needs of temporary staff to follow up the phasing out
and phasing in of the two different Programmes may be necessary. These
specific needs will be assessed once the design of the Programme 2 will become
more specific and detailed. It seems reasonable to assumed here that an
addition of 3 FTEs will be sufficient for three years.
[49]             These
figures are based on the version of the ATM Master Plan (v2.3) as it was
available at the moment the study was performed.
[50]             http://ec.europa.eu/transport/facts-fundings/evaluations/doc/2010_sesar_mid_term.pdf
[51]          The EC Treaty
provides for the possibility to establish Joint Undertaking (Art 171, now TFEU
187). The Joint Undertaking (JU) is the legal entity constituting the framework
for the JTI activities. Each JU is adapted to the specificities of each JTI.