Iris Public Event Iris operation studies OPERA v12102011 Public... · 2021. 5. 24. · ISSP + CSP + SSP •The Certification service is assessed a flat 5% of the total service model

OPERA – Iris Public Event October 2011 | slide 1 | ©SITA

OPERA study

Operational Requirements

and Business Case

Iris public event

Oct 11th, 2011

The OPERA Consortium is SITA and SES


Disclaimer note

• The following data have been issued

as a part of the model elaborated for

the OPERA technico-operational study.

• SITA and SES decline all liability in connection with any use

of any information contained in this presentation.


About the presentation

• Design and Operational Requirements

• Business case presentation

• Presentation of the ecosystem: the ISSP

• Timeline

• Revenues (Top Down analysis)

• Elaboration of a service model (Bottom-Up analysis)

• Business case attractiveness


DESIGN AND OPERATIONAL

REQUIREMENTS

OPERA STUDY


Design and Operational Requirements

• Design drivers

– Safety (RAMS)

– Scalability (growth)

– Interoperability (with other

systems)

– Flexibility

– Security

– Interface

– Quality of Service

• Operational drivers

– Safety (RAMS)

– Compatibility

(non-interference with

existing systems)

– Timeline

– Flexibility

– Security


Mandatory and Optional

Coverage Areas

Mandatory coverage Optional coverage


Influence of Orbital Position

Satellites Located at 4 deg W to 31 deg E

4 degrees West 5 degrees East

19 degrees East 31 degrees East


ECOSYSTEM

OPERA STUDY


Focal point for the provision of

Iris Communication Services

• A single commercial entity acting as

the provider of Iris services for all ANSPs

• The ISSP will be certified according to SES regulations (EC 550/2004)

• The ISSP will rely upon services

provided by the DSP and the SSP

• Stakeholders of the ISSP are ANSPs and the industry


SSP

DSP

bulk

ISSP

bulk

ANSP

Provision of Iris Services,

including

SAFETY + CERTIFICATION

CAPEX and OPEX in relation

with ATC SatComs

(incl. Ground connectivity)

CAPEX and OPEX in relation

with Iris-related SATELLITES

(ground + space segments)

Provision of ATC services

(National or FAB-based)

incl. COMMUNICATIONS

CAPEX and OPEX

in relation

with Iris-related

AOC SatComs

AirlinesAOC ATC

AIRLINES pay for ANS Charges,

(including COMMUNICATIONS,

that become REVENUES for the

ANPS, and indirectly for ISSP,

DSP and SSP)

Ecosystem for the business case


TIMELINE

OPERA STUDY


Main important milestones

#2

#3 #4

#5

#6

CA

PE

X

T0+5 T0+10 T0+20 T0+25T0+15 T0+30

OPEX

AOC

REVENUES

ATC REVENUES

OP

EX

EC decision on COCR/2: 2016

ANSP mandate: 2020

Forward fit mandate: 2020

Retrofit mandate: 2025

MAIN

HOT STANDBY

COLD STANDBY

ESA’s OPEX

End of ATC revenues ramp-up

with actual implementation of

the ANSP mandate

ESA

INDUSTRY

ATC revenues ramp-up depends

on ATC incentivization

2 scenarios:

• Pessimistic with plain forms

• Optimistic with dash lines

Nominal

operations

Initial

operations

Development

phase

Pre-operational

phaseOperational phase

#1

So

urc

e:

ES

A

T0 estimated 2011


REVENUES

OPERA STUDY


Elements framing the revenue model

• No extra-costs for the end-users (CRCO charges)

• ATC refers to cost recovery mechanisms (cf. regulation)

• Common Charging scheme: EC 1794/2006 (+EC1191/2010)

• Revenues are proportional to the volume of service units

• AOC grounds in price-based competition between technologies

(VHF vs. SatComs)

• The negotiation between airlines and the DSP/CSP occurs

for each route and each technology and each type of aircraft

• When transitioning to IP-based technologies,

volume fees are abandoned and flat fees are installed


(Sat)COMs in ANS: revenue analysis

parametric analysis


AOC contribution to IRIS per technology

assumptions and parameters

When? TECHNOLOGIES ORP CONTINENTAL

TODAYSATELLITE 100% 0%

CONTINENTAL 0% 100%

TOMORROW

ie

2025+

LEGACY SATELLITE 90% 0%

NEW SATELLITE (IRIS) 10% 25%LEGACY CONTINENTAL 0% 50%

NEW CONTINENTAL (LDACS) 0% 25%

Yearly growth for AOC Continental (total) revenues: Z% per year

Our assumption: minimum Z=5%, target value = 6%


Revenue ramp-up scenarios

• ATC revenues:

The ramp-up depends on the adoption of « new » ANS applications (e.g. 4D)

for specific FIRs

• We endorse the assumption of a « big bang » approach for each FAB,

with FABEC as the ‘first mover’

• The adoption schedule is aligned with the ANSP mandate

• AOC revenues:

The ramp-up depends on the availability of on-board technology,

i.e. on avionics certification and equipage

• We endorse the assumption of adoption schemes ruled by the important

issue of cost-correlation for airlines

• Forward-fit aligns with procurement of new aircraft

• Retrofit associates with late adoption schemes


SSP

DSP

bulk

TOTAL ATC COMs

Terminal + En Route

through Iris SatComs

PRR2010

• 2 parametric

scenarios in reference

to parameters

introduced for AOC

revenues traffic

• Results depend on

AOC revenues growth

over the period

2014-2045

ISSP

bulk

ANSPTotal discounted cumulated

ATC revenues (2014-2045)

only depend on parameters

introduced in the model,

and range between

• 189M€ when all

parameters are set at

the lowest minimum

(the worst of worst cases)

• 3.5G€ when all parameters

are set at the maximum

(the best among the best)

AOC through

Iris SatComs

Airlines

AOC ATC

Top-down analysis: discounted revenues


Available SatComs revenue per IFR movt

• Our own calculations for the

revenue model translate into

costs per IFR movement

• Assumptions for the volume of

IFR movements in the ECAC zone

are calculated as extrapolations

from ECTRL prospective scenarios

(4 options: A, B, C, D)

Scenario MIN AVERAGE MAX SIGMA

A – Pessimistic 1.50€ 5.73€ 9.06€ 2.70€

A – Optimistic 1.50€ 5.89€ 9.06€ 2.78€

D – Pessimistic 1.50€ 7.69€ 12.46€ 3.79€

D – Optimistic 1.50€ 7.90€ 12.46€ 3.68€

D

A


FROM CAPEX + OPEX

TO SERVICE MODEL

OPERA STUDY


SSP

bulk

DSP

SERVICE MODEL

DSP + SSP + ISSP

SERVICE MODEL

DSP + SSP

ISSP

bulk

ANSP

NO

AO

C

in t

he B

OT

TO

M-U

P a

naly

sis

AirlinesATC

Bottom-Up analysis: service model

TOTAL SERVICE MODEL

cumulated for

ISSP + CSP + SSP

•The Certification service is

assessed a flat 5% of the

total service model

incurred by the DSP+SSP

•The ISSP is supposed to

introduce only a cost

recovery mechanims, and

not profit-driven scheme

TOTAL SERVICE MODEL

cumulated for DSP + SSP

•Elements associate with

2+3 satellites procured by

the private industry (SSP)

•Only the aspects in direct

relation with Iris SatComs

are computed in the DSP’s

service model


BUSINESS CASE ATTRACTIVENESS

SENSITIVITY ANALYSIS

OPERA STUDY


The Cost for certification is

assessed as a flat 5% of the

DSP + SSP service model

The centralized model is the

most efficient configuration

• SSP: 2+3 GEOs+1 pair of GES

• DSP: only the marginal costs

in relation with Iris SatComsSSP

DSP

AOC

ISSP

ANSP

TOTAL ATC COMMs

IRIS SatComs

Airlines

ATCPRR2010

It is always possible to find out

“some” parameters that make

the business case effective

Are these parameters

actually realistic?

Business case effectiveness

The AOC business is

driven by price-led

competition between

technologies. Airlines

select the most cost-

efficient technology

for each route

TOTAL IRIS SatComs


Most important variables

(sensitivity analysis)

The OPERA sensitivity analysis has identified

the most important variables in the business case:

• X: Annual variation of En-Route Communication revenues

in the total ANS en route revenues

(ie the growth of the size of the ANS “cake”);

• AxB: Percentage of Ground-to-Mobile DataLink

communications in En-Route ANS

(ie the growth of the size of the COM “slice” in the ANS “cake”)

• Z: Annual variation of Continental AOC revenues

(not traffic)


Sensitivity analysis: Main conclusions

• SatComs for Terminal Ground to Mobile Datalink are much more uncertain

than for En-Route Ground to Mobile Datalink.

• The business case effectiveness depends on

the increase in communication revenue shares in ANS Coms (E-R, T).

It does not depend only on the growing size of the ANS revenues;

it does depend on the growth rate of the COMs “slice” (AxB%, or FxGxH%)

in the also increasing ANS revenues (X%).

• The increase in communication revenues shares in ANS can be afforded

on the basis of productivity gains ECAC-wide (FABs).

• The business case effectiveness depends

on ca. 30% contribution from AOC revenues.

• Uncertainties and risks for AOC and ATC do not compare.


Conclusions about PPPs:

PPPs are not relevant for this ecosystem

• In PPPs, current construction or availability risks are traded against the

uncertainty about revenues

• There is no economic justification for PPPs with Iris SatComs:

• Demand risks in ATC only depend on the issue of the “mandate” that

impacts the whole project.

• Construction risks, and Availability risks are null because ESA endorses

the “SatComs for ATS” concept validation costs, and the first CAPEX.

• The transfer of ownership from ESA to the industry for the

1st CAPEX requires contractual modalities that look like a PPP, require the

investigation of PPP-like issues, yet are NOT a PPP contract because it

remains a service model contract.

Documents

Iris Public Event Iris operation studies OPERA v12102011 Public... · 2021. 5. 24. · ISSP + CSP + SSP •The Certification service is assessed a flat 5% of the total service model