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Cost-Benefit Analysis of Cost-Benefit Analysis of the European SWIM the European SWIM

InfrastructureInfrastructure

Miguel Vilaplana - BR&T Europe

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OverviewOverview

– Objectives and scope

– Definition of proposed CBA methodology for SWIM

– Initial results: costs and benefits identification and assessment

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ObjectivesObjectives

– Understand and analyse the economic and financial implications of implementing an European SWIM infrastructure using Cost-Benefit Analysis (CBA) techniques

• CBA is an important tool to support investment decisions in the ATM context, as it helps evaluate whether investments are economically viable for the different stakeholders

• The CBA approach adopted is based on the EMOSIA (European MOdel for Strategic Investment Analysis) methodology (same as SESAR)

– Identify and assess SWIM costs and benefits considering SWIM-SUIT project results

– Define economic models and obtain estimates of economic and financial indicators for each stakeholder (Net Present Value, Benefit/Cost Ratio, etc) based on costs and benefits

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ScopeScope

SWIM CBA

SWIM-SUIT Prototype Validation Results

Expert judgement from users and Stakeholders and data from other studies (SESAR) Shortfalls that SWIM

covers Benefits that SWIM brings to each stakeholder

CBA Methodology

Results

Costs associated to SWIM infrastructure

Costs for each stakeholder

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CBA ProcessCBA Process

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Expected ResultsExpected Results

– Economic and financial indicators per stakeholder over a certain evaluation period, :

• Net Present Value (NPV), Benefit to Cost Ratio (B/C)

• Breakeven point

• Payback Period

– Sensitivity analysis identifying the most critical variables to the economic success of SWIM

– Risk analysis showing the likelihood of SWIM delivering a certain Net Present Value

– Recommendations for investments including focus areas for further research

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Key Features of the Key Features of the MethodologyMethodology

– Identification and assessment of costs and benefits tailored to the SWIM problem:• Considering outputs from SWIM-SUIT project

• Taking into account SESAR and FAA SWIM costs and benefits assessment work

– Economic models of stakeholders based on EMOSIA models

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Initial Assesment of Initial Assesment of CostsCosts

– Cost identification and categorization:• Investment costs

– Development

– HW/SW

• Operating costs– Licensing/service fees

– Maintenance

– Data sources:• Workshops with users/stakeholders• SWIM costs identified in SESAR• Costs associated to adaptation of legacy systems to

SWIM (from SWIM-SUIT project)

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Example: ANSPs’ GG/AG SWIM Example: ANSPs’ GG/AG SWIM Costs Costs (in M€)(in M€)

Implementation

PackageR&D costs

Implementation

Expenditure

Total Investment

s

Deployment Staff Costs

Annual Operating

Costs

IP1 10.96 456.99 467.95 9.14 93.90

IP2 42.36 634.63 676.99 12.69 123.64

IP3 9.15 144.01 153.16 2.88 29.49

TOTAL 62.47 1,235.63 1,298.10 24.71 247.03

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Initial Assesment of Initial Assesment of BenefitsBenefits

– Benefits mechanisms and categorisation• Investment expense savings

– Infrastructure (simultaneous support to multiple applications)

– Interfaces between applications (development and maintenance)

• Harmonization– SW re-use, easier to implement new applications

• Additional revenue– Enabler of more efficient operations and increased capacity

– Data sources:• Workshops with users/stakeholders• SWIM-SUIT validation results • Trace SWIM impact on SESAR operational improvements

and translate to monetary value

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SWIM related SESAR SWIM related SESAR benefitsbenefits

qualitative assessmentqualitative assessmentBased on SESAR definition phase docs.• BENEFIT PLANNING BENEFIT PLANNING T3.4.4/D5 DLT-0710-

344-00-07• TRADE-OFF ANALYSIS AND SELECTIONTRADE-OFF ANALYSIS AND SELECTION

OOF TRANSITION SCENARIOSF TRANSITION SCENARIOS T3.3.3 Milestone 4 DLT-0706-333-00-05

• COST BENEFIT MODELLINGCOST BENEFIT MODELLING WP1.4.1/D1, DLT-0507-141-00-10

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Methodology of Methodology of qualitative assessmentqualitative assessment

– STEP 1:• Definition of Lines of Change (LoCs) and

Operational Improvements (OIs) in which SWIM acts as an enabler

– STEP 2:• Definition of roles of SWIM in particular OIs

– STEP 3:• Assignment of particular OIs to

correspondent KPAs

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Example KPA Example KPA EfficiencyEfficiency

Fuel efficiency

Factor name: Ground Queuing (Departure or arrival)

Qualitative assessment: Medium

OI Step ID OI Step

description Benefit Mechanism

Qualitative assessment Role of SWIM Details

TS-0202

Departure Management Synchronised with Pre-departure Sequencing

DMAN allow to optimise Gnd Queueing and wait at stand -> saving some fuel but not saving time

Medium Institutional Enabler

LEG-01 EU Legislation - SWIM Interoperability Implementing Rule

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ConclusionsConclusions

– Ongoing work on:•Economic models for each stakeholder

•Gathering data for model inputs:– Costs and benefits

– Users and other stakeholders invited to provide their views and inputs

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Questions and FeedbackQuestions and Feedback