Harmonization of aviation user charges in the North Atlantic airspace

Abstract

The purpose of this thesis is to explore various harmonization scenarios for North Atlantic en route user charges. The current charging system involves eight countries, each with their own method for computing user charges. The scope of the research is limited to revenue neutral approaches for service providers, meaning each air navigation service provider (ANSP) receives constant total charges in 2006. Therefore, the viability of different scenarios is compared in terms of its impact on airspace users. Two different interpretation of a "harmonized" system are considered. The first explores the harmonization of only the charging methodology, allowing service providers to set and collect their own charges. The second harmonization alternative fully harmonizes the North Atlantic user charges resulting in a single charge per flight. Within each of these alternatives four different charge scenarios were modeled using 2006 data. The four alternatives are a flat charge, distance-based rate, a combination weight and distance charge, and a fixed-plus-variable charge. Utilizing 47,516 North Atlantic flights drawn from a systematic random sampling of days in 2006, the average North Atlantic user charge was determined to be $393 and ranged from less than $1 to $3,868. The magnitude of the average North Atlantic user charge is small relative to the total flight costs airlines incur, thus all harmonization approaches will have only second order effects on the airlines' bottomline. Thus, the harmonization of the regions' user charges allows for the unique opportunity to develop a more rational system of charges without large disruptions to the majority of users. The thesis explores the impact of the various charge scenarios on user stakeholder groups in terms of aircraft size, North Atlantic distance, and origin-destination regions.

(cont.) The results show a distance-based rate imposed at the ANSP-level would result in the smallest disruption to users' charges compared to the baseline system. However, any semi-independent harmonization approach sacrifices the efficiencies which could be realized under a fully harmonized system. Of the fully harmonized methods, the Eurocontrol formula with a service unit rate of $7.28 is the least disruptive to the baseline user charges.