Issues Confronting Air Navigation Service Providers - Example

Air Navigation Service Provider Industry Name: College: Course: Lecturer: Date: Table of Contents1.0 Introduction……………………………………………………………………………3 2.0 Financial Analysis……………………………………………………………………..4 2.1 Financial Performance of Air Navigation Service Providers……………………..4 2.2 Impact of Commercialization of Air Navigation Service Providers on Safety and Efficiency of Air Traffic Services…………………………………………6 3.0 Human Factors Analysis……………………………………………………………..7 3.1Impact of Workload on the Air Traffic Controller……………………………………7 3.2 Predominant ‘Selection’ Processes of Air Navigation Service Provider………..8 3.3 Predominant ‘Training’ Programs of Air Navigation Service Providers……….9 3.4 The Impact of the Environment on Air Traffic Controllers E.G. Stress, Sleep and Fatigue……………………………………………………………………10 3.5 Using Human Factors to Optimize Their Air Traffic Controller’s Performance and Mitigate the Possibility of Staff Errors………………………11 4.0 Strategic Analysis………………………………………………………………….12 4.1 Strategies of Predominantly Successful Air Navigation Service Providers……12 4.2 Effects of Commercialization on Air Navigation Services………………………..13 4.3 Response to Key Industry Stakeholders Requirements……………………………14 4.4 Influence of Commercialization of Air Navigation Service Providers on Pricing and Financial Performance………………………………….14 5.0 Technological Analysis………………………………………………………………15 5.1 History and Current Trend of Air Traffic Control Technology…………………15 5.2 The Impact of Technology on Air Traffic Controllers……………………………16 5.3 Strategies of Air Navigation Service Providers with the Introduction of New Technology………………………………………………………17 6.0 Conclusion…………………………………………………………………………...18 References………………………………………………………………………………..20 1.0 Introduction Air navigation service provider (ANSP) industry plays a significant role in the operation of modern economy. Air navigation service provider industry manages the flow of air traffic thus enabling the efficiency in air transportation services. A poorly run ANSP is likely to jeopardize safety, impose high costs and cause material travel delays on cash-strapped airlines. In order to increase its effectiveness, the ANSP industry has experienced massive innovation over the past two decades. For instance, by the year 2005 more than forty countries across the world had commercialized their air navigation service providers (GAO, 2005, p.20). The process of commercializing the ANSPs involved establishment of new funding methods, new arrangement of governance and new techniques for economic and safety regulations for the reorganized ANSPs. However, some countries including United States of America did not commercialize their ANSPs. In United States, control of air traffic remains with Federal Aviation Administration which is substantially organized as a conventional department of the government. Nevertheless, there is intense debate regarding commercialization of ANSPs. Generally, the industry of air navigation service providers is currently being faced with financial issues, human resource issues, strategic and technological issues which affect its performance (Gerald 2005, 12). 2.0 Financial Analysis 2.1 Financial Performance of Air Navigation Service Providers Generally, financial performance of air navigation service providers has improved substantially for the last one decade. However, the improved financial performance has been attributed more on commercialization of ANSPs in various countries across the world. Commercialized ANSPs has improved their financial performance due to effective cost control, productivity and financial stability while maintaining safety. Due to recruitment of high qualified managers, the efficiency of cost control has improved substantially in commercialized ANSPs. Moreover, adoption of new technology and increase in creativity and innovation has also contributed significantly to attractive financial performance in commercialized ANSPs. Provision of high quality services while considering the interests of all stakeholders is the driving force of the commercialized ANSPs. In this regard, stakeholders especially employees are well motivated thus carrying out their tasks effectively leading to increased productivity. Increased productivity has enabled various ANSPs to expand their operations to foreign countries thus increasing their revenue (International Civil Aviation Organization 2008). Besides, improved corporate governance in commercialized ANSPs has also contributed to increased financial stability of ANSPs. Due to improved corporate governance, timely and effective decisions are made in commercialized ANSPs. In addition, studies have shown that commercialized ANSPs are more responsive to user needs. According to principles of strategic management, highly customer needs responsive business organization attracts and retains many customers (International Civil Aviation Organization 2008). Commercialized ANSPs are performance based organizations since they develop their own strategies, objectives and gather data to demonstrate their performance. The commercialized ANSPs operate as business organizations since they establish their financial management strategies with an aim of maximizing financial returns. In this regard, they finance their operations through charging fees on users of navigation services. Moreover, commercialized ANSPs are able to access capital markets like business organizations thus being in a position to acquire more funds to finance productive projects. These features have led to improved financial performance of the commercialized ANSPs (Gerald 2005, 12). On the other hand, the financial performance of non-commercialized ANSPs is not appealing. The main objective of ANSPs is to ensure security in the airline industry. High financial performance is not a factor during the evaluation of the performance of ANSPs. Cost control is not a major objective of a non-commercialized ANSP thus little attention is paid to this aspect. As mentioned before, non-commercialized ANSP aims at enhancing security in airports and airlines. In this regard, such an entity spent more money trying to improve the security of air transport services in a jurisdiction. As a result, such an entity spends a lot of resources to ensure security of air services in a jurisdiction. Moreover, since non-commercialized ANSPs operate under government departments, they are funded by the government thus there no pressure for high returns in form of net income (International Civil Aviation Organization 2008). 2.2 Impact of Commercialization of Air Navigation Service Providers on Safety and Efficiency of Air Traffic Services Studies have shown that commercialization of air navigation service providers has impacted on in improving safety and efficiency performance of its air traffic services. Commercialization of ANSPs has not led to a decline in air navigation safety. In countries such as Germany where ANSP has been commercialized, there was a substantial decrease in the number of aircraft proximity incidents by 15 in 2003. Commercialization of ANSP in Germany took place in 1995 when the country had recorded 23 aircraft proximity incidents. However, eight years after commercialization, the country recorded 8 aircraft proximity incidents. Such a substantial decline of aircraft proximity incidents is an indicator of substantial improvement of safety in air navigation. Moreover, in United Kingdom the number of riskiest air proximity incidents decline from nine in 2001 to 2 in 2003. In addition, Airways Corporation of New Zealand has indicated a downward trend in incidents involving separation loss after commercialization. In Canada, the rate of loss of separation incidents declined from an average of 0.96 incidents 100,000 movements in 2000 to 0.79 in 2004. These substantial decline of aircraft proximity incidents indicate that commercialization of air navigation service providers has a positive impact on safety in air navigation (GAO, 2005, p.22). In certain jurisdictions, the safety of air navigation systems has remained as it was before commercialization of ANSPs. Separation of regulatory and operating functions has diminished any potential conflict of interests between protection of safety and promotion of financial interests. The separation of regulatory and operating functions has also strengthened safety regulations in air navigation. Various concerned have been raised regarding potential controllers fatigue due to system upgrade and improved technology which allows controllers to handle a high volume of air traffic. However, commercialized ANSPs have taken measures to monitor and limit controllers’ workload thus mitigating the issue of fatigue. For instance, CAA of United Kingdom has regulated the hours for traffic controllers in civil air traffic. In case of breach or intention to breach the working hour regulations, air navigation service provider or controllers must inform safety regulation group of CAA. In addition, in countries like New Zealand air space sectors has been divided into various divisions thus enabling controllers to handle smaller pieces of airspace. Based on these facts, it is evident that commercialization of air navigation service providers has impacted safety in air navigation positively (GAO, 2005, p.23). 3.0 Human Factors Analysis 3.1Impact of Workload on the Air Traffic Controller Air navigation service providers are also affected by various human issues which need to be addressed effectively in order to increase the efficiency of the industry. Workload affects the performance of air traffic controller. In a light workload condition, time is less crucial and more abundant thus enabling activities related to flight progress and communication to be more influential on air controllers’ transition to next activities. Based on the fact COM-COM spells include wide range of activities, the sequence of actions of air traffic controllers are determine by previous actions during light work load. In heavy work load condition, time is the major factor which determines what an air traffic controller accomplishes. Tactical air traffic controllers follow the availability and rhythm of time more closely during heavy workload than when their work load is light. In this regard air navigation service provision is time-based since the air traffic controllers seeks to prioritize activities during heavy workload (Arnold & Frank 2006, p.4). Moreover, cooperation among air traffic controllers is usually present in heavy workload condition than in light workload condition. Cooperative work in form of planner information prolongs the COM-FP spell. The communication between planner and tactical air traffic controllers is usually intensified during heavy workload than in light workload condition. Due to trade-off between increase of cognitive resources because of high cooperation among controllers and increased time for carrying out air navigation control activities, planner and tactical controllers are required to share similar mental model. However, in heavy work load condition, controllers are not in a position to make effective decisions in case of emergency. During emergency, quick and effective decisions are supposed to be made. However, due to heavy workload, communication to other controllers or planners may take time thus declining the efficiency of actions taken. On the other hand, during light work load, air traffic controllers are likely to make effective decision incase of emergency (Arnold & Frank 2006, p.5). 3.2 Predominant ‘Selection’ Processes of Air Navigation Service Provider Many navigation service providers have adopted competency-based models to identify and select most suitable air traffic controller candidates at recruitment stage. The competence-based models are commonly used because they aid in establishing behavior traits required in a certain job and the extent to which different applicants meet the traits. Competency-based models are based on the idea that current or past behavior of an individual is the best predictor of future behavior in similar situations. Through competence-based models, human resource managers in air navigation service providers are in apposition to identify future requirements of personnel. Moreover, competency-based models help in determining specifications to hire high qualified personnel. Aptitude tests, interviews and practical exercises are carried out during selection to ensure that the most suitable candidates are selected (Chetcuti 2004). However, human resource managers are usually faced with various issues while selecting air navigation service providers. To start with, the ever changing technology in the air navigation service provision is a major challenge. Selection of employees is supposed to be based on current and future technological know how requirements of human resources. In this regard, human resource managers find it difficult to precisely identify current and future technological requirement. Moreover, labor laws pose challenges during recruitment since in many jurisdictions, organizations are required to attain a certain minimum wage rate as well as recruit local employees. Besides, inadequacy of high qualified air navigation service providers’ job seekers in the market poses a major challenge during the selection process since human resource managers find it difficult to attract high qualified employees (Chetcuti 2004). 3.3 Predominant ‘Training’ Programs of Air Navigation Service Providers Studies have shown that many air navigation service providers especially those which are commercialized have moved away from traditional class room training program to increased utilization of electronic delivery training program. Many air navigation service providers have identified, developed and delivered training options that are applicable to various career orientations, skills and learning styles set for their employees. Web lectures including e-discussions, videos, web-based simulators, online distance learning modules and virtual classrooms are the predominant training programs of air navigation service providers (Chetcuti, 2004). These predominant training programs have impact on how air traffic controllers carry out their tasks. To start with, due to convenience of these training programs, all air traffic controllers are able to participate fully in the training program. As a result, the output of the air traffic controllers has been enhanced substantially due to use of the new technologically based training programs. Besides, these training programs increase motivation among the air traffic controllers since they provide thorough training thus enhancing their knowledge and skills substantially. Poor training programs are likely to have a negative impact on the performance of air traffic controllers. Through poor training programs, air traffic controllers are likely to miss important knowledge and skills thus performing poorly on their duties. In addition, poor training programs reduce morale of air traffic controllers thus limiting their productivity and efficiency (Chetcuti, 2004). 3.4 The Impact of the Environment on Air Traffic Controllers E.G. Stress, Sleep and Fatigue The working environment of air traffic controllers is very challenging. Air traffic controllers are required to cope up with the pressure of heavy workload, besides, the task of controlling air traffic demands high concentration since a slight mistake could lead to lose of lives through accidents or terrorist attacks. Lack of enough sleep is one of the major effects of the working environment of air traffic control. Since the air traffic control is carried out during the night and day time, workers in night shift usually find it difficult in containing sleepiness. Moreover, fatigue and stress are common among air traffic controllers due to the demanding and heavy workload in air navigation service provision (Arnold & Frank 2006, p.3). Various strategies have been used by air navigation service providers to address the issue of stress, sleep and fatigue among air traffic controllers. Decomposition of traffic of air traffic control operations into subroutines for automation is one of the major strategies utilized by air navigation service providers to address the issue of stress, sleep and fatigue among air traffic controllers. To implement this strategy, the air navigation service providers have adopted high quality technology. Besides, the organizations have adopted cooperative frameworks in system design to ensure that all air traffic controllers are assigned tasks which they can execute without being stressed or worked up. Besides, the human resource managers usually recruit highly qualified personnel for each and every task. To implement these strategies, air traffic controllers are usually involved in decision making processes to express their interests. Besides, enough financial resources are usually budgeted for advancement of working condition of the air traffic controllers (Arnold & Frank 2006, p.2). 3.5 Using Human Factors to Optimize Their Air Traffic Controller’s Performance and Mitigate the Possibility of Staff Errors Air navigation service providers have used human factors to optimize air traffic controllers’ performance and mitigate the possibility of air traffic errors. To start with, some air navigation service providers have decomposed their air traffic control operations into subroutines for automation. This strategy lowers cognitively demanding duties and monotonous tasks on individual operation. Besides, air navigation service providers have incorporated cooperative frameworks into their system design to foam an optimum task workload balance to ensure that air traffic control tasks are effectively and efficiently and effectively distributed among team operators. For instance, in United Kingdom airspace in en-route, air traffic control is subdivided into sectors controlled by teams of air traffic controllers (Arnold & Frank 2006, p.2). Moreover, air navigation service providers are using web-based training programs to ensure efficiency in workers. In order to control the negative impact of the harsh working environment, air navigation service providers have reduced the amount of work per individual through subdivision of control tasks into various sectors. In addition, organizations have adopted advanced operation technology which reduces the work load of employees substantially. The air navigation service providers have invested intensely in research and development in order to discover new technologies and adopt them effectively. For a new technology to be implemented, a feasibility study is usually carried out to ensure that the new technology will have substantial benefits to the organization as a whole. A manager is usually assigned the management of installation of new technology project to ensure that effective results are attained. In order to attract high qualified air traffic controllers, many air navigation service providers offer high remuneration packages and career development opportunities to its employees (Arnold & Frank 2006, p.2). 4.0 Strategic Analysis 4.1 Strategies of Predominantly Successful Air Navigation Service Providers Successful air navigation service providers have used various effective strategies. Some of the successful air navigation service providers include those of Canada, United Kingdom. The success of the air navigation service providers is measured by the ability to maintain high standard of safety in air navigation operations as well as delivering efficient services to users of the services. One of the major strategies which have commonly been utilized by many of the successful air navigation service providers is commercialization of their operations. Due to commercialization, the air navigation services have adopted the models of business organizations which aim at providing high quality services at reasonable prices. In this regard, efficiency of air navigation service delivery has been improved (GAO 2005, p.10). Besides, performance-based approaches have also been utilized by successful air navigation service providers. In this approach, the organization develops strategies, goals and evaluates its performance based on quality of services and income generation. Establishment of goals gives direction to all internal stakeholders of the organization thus enhancing coordination and teamwork spirit. In addition, successful air navigation service providers have invested in advanced technology to boost the quality of their services and enhance efficiency in operation. Substantial investment in advanced technology leads to reduced cost of operation as well as reduced employees’ workload. All successful air navigation service providers have also acknowledged the importance of human resources in the organizations. In this regard, they have provided favorable working condition for their employees to enhance their motivation. Besides, the organizations have also offered high remuneration to employees to discourage high rate of employee turnover (GAO 2005, p.10). 4.2 Effects of Commercialization on Air Navigation Services Commercialization has had profound effects on certain aspects of air navigation services. To start with, the efficiency of services has been improved substantially since the organizations have invested in new advanced technology and equipment. Air navigation service users have been able to get services at the right time, in the right place and in the right manner in jurisdictions where air navigation service provision is commercialized. For instance, the average number of movements handled by commercialized air navigation service providers within one year has increased substantially due to increased efficiency in operations (GAO 2005, p.16). According to studies, there is no case where safety in air navigation has reduced in commercialized air navigation service providers. Studies have shown that, in most jurisdictions where air navigation service providers have been commercialized, the number of aircraft proximity incidents have reduced substantially. However, in a few commercialized air navigation service providers the safety of air navigation has remained constant. Nevertheless, commercialization has led to increased charges of air navigation services. Air navigation services users have to part with more money to acquire services since the commercialized air navigation service providers also aim at making profits. However, increased prices have not been substantial since price settings are controlled by government authorities and the service providers have prospered in cost minimization endeavors (GAO 2005, p.16). 4.3 Response to Key Industry Stakeholders Requirements Domestic and international airlines are the key stakeholders in air navigation service providers’ organization. The requirements of the key stakeholders are to attain, efficient, and high quality air navigation services at a reasonable fee. In response to these requirements, the air navigation service providers have adopted various strategies to reduce the cost of operation (Kuile 2004, p.82). Substantial investment in advanced technology and recruitment of highly qualified air traffic controllers have led to delivery of high quality services to stakeholders. Besides, the organizations have ensured that employee have good working environment thus enhancing their motivation which is essential in increasing productivity and efficiency. In addition, effective cost management has enabled the air navigation service providers to respond effectively to the needs of airlines to access services at reasonable prices (GAO 2005, p.16). 4.4 Influence of Commercialization of Air Navigation Service Providers on Pricing and Financial Performance Commercialization of air navigation service providers has affected pricing strategies and financial performances of the organizations. First of all, upon commercialization, the organizations had to change their pricing strategy to cater the needs of self-financing and attain their objective of registering high returns. In this regard, the prices of services have to be higher than the cost of providing the service to enable the organization to sustain itself. Though the organizations are allowed to set prices for their services, the prices must be approved by a government authority. For instance, in Australia, fees for air navigation services are set by air navigation provider but approved by Australian Competition and Consumer Commission. The commission ensures that the prices set by the air navigation provider don’t oppress air navigation service users. Furthermore, the Canadian Transportation Agency oversees the pricing setting of air navigation service provider in Canada to safeguard the interests of service users. Price setting in countries such United Kingdom is done based on price index in the market and estimated operating and capital cost of the air navigation provider (GAO 2005, p.15). According to various studies, commercialization of air navigation service providers has improved the financial performance of the organizations substantially. The fact that the air navigation service providers operate under business model has given them an opportunity to set navigation fees above cost of operation and cost of capital thus making a profit. Besides, the ability of the organizations to access local and international financial markets has enabled them to acquire more capital to finance new income generating and quality enhancing projects. This is evidenced by the fact that many of the commercialized air navigation service providers were able to cushion themselves from effects of financial crisis. Many of the commercialized air navigation service providers have also experienced substantial reduction of debt due to adoption strategic business management principles. Generally, commercialization has had a positive impact on financial performance of air navigation service providers (GAO 2005, p.15). 5.0 Technological Analysis 5.1 History and Current Trend of Air Traffic Control Technology The history of air traffic control technology dates back to the year 1919 when air traffic controllers used visual signals such as flags to control landing and taking off of airplanes. Evolution of radio-equipped control tower in the year 193o led to replacement of flagmen. However, the first airway traffic control center commenced its operation in 1936 to control the operations of the increased number of flights and to control air traffic not only in airports but also along airways. Nevertheless, during this time controllers used blackboards and maps and shrimp boats to track position of planes. Telephones were used to coordinate operations of airport traffic controllers, airline dispatchers and airway radio operators (Alexander & Young 2004, p.154). In 1946, a radar equipped tower was built to control civil flights in United States. However, the radar was fully used in 1952 to control approach and departure of airplanes. The radar also being used to control flights in 1964 where airplanes were required to carry a radar beacon. National airspace system in United States was modernized in 1975 when a complex computerized system was developed replacing plastic markers for tracking airplanes. Another major revolution of air traffic control occurred in 1999 when a standard terminal automation replacement system was developed and implemented. The new system enabled new displays and abilities for facilities of approach control. Free flight program is the latest technology which was developed in 1998. In this program, allows pilots to use electronics and instruments on board to maintain a safe distance from other planes and reduce reliance on air traffic controllers on ground (Alexander & Young 2004, p.155). 5.2 The Impact of Technology on Air Traffic Controllers The evolution of high technology over the period has had substantial impact on air traffic controllers. To start with, high traffic control technology has led to substantial reduction of air traffic controllers’ workload. Evolution of computerized air traffic control system reduces the manual work performed by air traffic controllers substantially. In this regard, tiredness and boredom of air craft controllers have been reduced by introduction of technology. Besides, due to reduced workload, air traffic controllers can have adequate sleep and rest. Adoption of advanced technology creates a good working atmosphere which also enhances motivation of air traffic controllers (Alexander & Young 2004, p.165). Besides, advanced technology leads to increased efficiency in productivity and operation which in turn leads to high returns especially in commercialized air navigation providers. As other stakeholders benefit from increased returns, employees also benefit by having their salaries revised on their favor. However, technology also had negative impact on some of air traffic controllers. Rapid changes of technology require frequent training or recruitment of highly qualified air traffic controllers. Services of some of air traffic controllers are normally rendered irrelevant after adoption of new advanced technology. This calls for dismissal of some of the air traffic controllers thus they experience the negative impact of technology change. Generally, technology has both negative and positive impact on air traffic controllers (Alexander & Young 2004, p.166). 5.3 Strategies of Air Navigation Service Providers with the Introduction of New Technology Introduction of the new technologies would be of importance to air navigation service provider if strategies to exploit the opportunity and mitigate threats exposed by the new technologies will not be developed and implemented. The first strategy is to adopt the already experimented new technology in order to enhance efficiency in service provision. Another strategy in the event of a new technology in air navigation service providers industry is disposal of assets and equipments which are render obsolete. New technology usually replaces old technology either partially or wholly thus it’s the obligation of managers to dispose assets or equipments rendered obsolete. Moreover, dismissal or transfer of employees who are rendered irrelevant on their places of duty should accompany disposal of assets. Such a move enables the air navigation service provider to minimize cost of operation (Colin 2002, p.41). 6.0 Conclusion The air navigation service providers industry is being faced with financial, human resource, technological and strategic management issues. Though some of the service providers across the world have taken substantial actions to mitigate the negative effects of these issues, some haven’t. For instance, in certain jurisdiction commercialization of air navigation service providers has been done to enhance efficiency and financial stability. In order to minimize workload among air traffic controllers, most of air navigation service providers have adopted advanced technology of service provision. Besides, control of flights tasks have been subdivided into various divisions thus minimizing the workload of individual air traffic controller. Effective training programs such as web-based training programs have been adopted by many air navigation service providers to ensure effective insemination of knowledge and skills to employees. Besides, efficient technology and strategic cost control has been adopted by air navigation service providers to respond effectively to the needs of their major stakeholders. The air navigation service providers dispose assets which are rendered obsolete by adoption of new technology in order to maximize returns. In addition, employees whose tasks are rendered irrelevant are either transferred to other duties or dismissed for recruitment of highly skilled and knowledgeable individuals regarding the new technology. Though air navigation service providers are faced with various issues, adoption of effective strategies can turn the issues into opportunities. References Alexander, T & Young, S 2004, Airport planning & management, 5th ed, McGraw-Hill, New York. Arnold, M & Frank, E 2006, ‘Effects of light and heavy workload on air traffic tactical operations: a hazard rate model,’ Ergonomics, vol.42, no.9, pp.1-15. Chetcuti, F 2004, Managing the ATCO career: issues for organizations, managers and staff, viewed on 7 October 2009, < http://www.eurocontrol.int/human factors/gallery/content/public/docs/DEL>. Colin, B 2002, ‘Look south,’ Airline Business, vol.18, no.6, pp.40-42. GAO, 2005, ‘Air traffic control: characteristics and performance of selected international air navigation service providers and lessons learned from their commercialization,’ GAO Reports, vol.12, no.2, pp.1-39. Gerald, D 2005, ‘Air traffic control: Preliminary observations on commercialized air navigation service providers,’ GAO Reports, vol.4, no.20, pp.1-26. Glen, M 2008, ‘commercializing air traffic control: have the reforms worked,’ Canadian Public Administration, vol.51, no.1, pp.45-69. International Civil Aviation Organization, 2008, Conference on the economics of airports and air navigation services, viewed on 5 October 2009, < http://www.icao.int/ceans/Docs/Ceans_Wp_012_en.pdf>. Kuile, A 2004, ‘Working together with ATC,’ Airline Business, vol.20, no.7, pp.82-82. Read More