ESSP-MEMO-13973 Simple Business Case methodology for LPVs...

MEMO

Simple Business Case methodology for LPVs in Aviation (EBCAST tool)

Ref: ESSP-MEMO-13973

Version : 00-01

Date: 02.03.2015

/23

ESSP-MEMO-13973 Issue: 00-01 Page 1/23

This document is the property of Telespazio. All information included is confidential and may not be distributed without prior formal approval

If printed, make sure it is the applicable version

ESSP-TMPL-0624_03-00_Memo_Template.dotx

Author: EGNOS Adoption team

Distribution: GSA, User Support website registered users

CC: -

Contents

1 Introduction ................................................................................................................................ 2

1.1 Applicable Documents ............................................................................................................ 2

1.2 Reference Documents ............................................................................................................. 3

2 Draft methodology for the provision of Business Cases in aviation .......................................... 4

2.1 Available references ............................................................................................................... 4

2.2 Draft methodology for OPERATOR Business Cases ............................................................ 4

2.3 Draft methodology for AIRPORT Business Case Assessment ............................................ 10

3 EBCAST operator manual........................................................................................................ 17

3.1 Operator business case .......................................................................................................... 17

3.2 Airports business case ........................................................................................................... 20

MEMO



Version : 00-01

Date: 02.03.2015

/23





1 Introduction

This document introduces the methodology behind the tool for business case (BC) assessment for

operators and airports, regarding the introduction of LPV operations within their scope (EBCAST).

The motivation for this activity is the need for providing a simple tool for drawing the attention of

investors towards the LPV implementation at aerodromes and heliports in the EGNOS coverage area,

on one hand, and towards the equipage of LPV-capable avionics in the fleet of operators, on the other.

The methodology can also be extended to the case of the realisation of on-demand business cases; in

fact, users are advised to take advantage of the support of ESSP to tailor specific Business Cases to

their particular scenario, as this tool may not be enough for a fine-tune analysis.

1.1 Applicable Documents

AD Document Title

[AD-1] GSA/NP/09/12 – “EGNOS Service Provision”

[AD-2] ESSP-MAN-134 ESSP Management Manual (latest applicable version)

MEMO



Version : 00-01

Date: 02.03.2015

/23





1.2 Reference Documents

RD Document Title

[RD-1] GIANT D4.1.2.1 Air Nostrum Business Case for SBAS equipage. (Helios – 2006)

[RD-2] GIANT-2 D7.2 Review and validation of assumptions of EUROCONTROL CBAs (Ineco, 2011)

[RD-3] Standards Inputs for Eurocontrol CBAs (Eurocontrol – 2013)

[RD-4] RNAV Approach Benefits Analysis - Final Report (Helios – 2009)

[RD-5] EGNOS CBA study for GSA (L.E.K., 2009)

[RD-6] Implementation of LPV approaches in Mielec AD (Pildo Labs, 2010)

[RD-7] GIANT-2 Business Case for Helicopters (AgustaWestland, 2011)

[RD-8] ACCEPTA Business Case for Air Nostrum (Helios, 2011)

[RD-9] ACCEPTA Business Case for NetJets (Helios, 2012)

[RD-10] Universal Avionics payback calculator. URL http://www.uasc.com/products/lpvcalc.aspx

[RD-11] Report on adoption status, KPI and recommended actions, aligned with the countries’ PBN

implementation plans, deliverable for Italy (Helios, 2013)


implementation plans, deliverable for Germany (Helios, 2013)


implementation plans, deliverable for Sweden and Denmark (Helios, 2013)

[RD-14] 2012 aviation statistics – NTSB. URL https://www.ntsb.gov

[RD-15] Samal, Romel: “Estimating the Cost of Commercial Airlines Catastrophes. A Stochastic

Simulation Approach”. FCAS – MAAA 2003

[RD-16] SESAR 16.06.06 model for BA, GA and RC, v37

[RD-17] ESSP-TN-11491 Preliminary Assessment and Recommendations for Instrument Approach

Procedures to Non-Instrument Runways

[RD-18] ESSP-MEMO-12456 LPV vs RNPAR benefit analysis for Airbus, v01-00, 31.07.2014.

[RD-19] ESSP-MEMO-12456 NetJets Business Case, v01-00, 30.11.2014.

MEMO



Version : 00-01

Date: 02.03.2015

/23





2 Draft methodology for the provision of Business Cases in aviation

2.1 Available references

A number of sample BC’s and Cost Benefit Analyses (CBA’s) have been collected and analysed,

together with a set of reference documents to make the exercise as much solid as possible. See the

‘reference documents’ section for a list.

From that analysis, it yields that the consideration of the different costs and benefits in the different

CBA’s is not homogeneous, that is, while some elements are considered as the only source of benefits

or costs in one CBA, they are neglected in others. In other cases, there is not a proper allocation of

costs or benefits to stakeholders, or there are diverse flaws.

Altogether, such analysis has been the basis to derive a simple methodology to apply to a web tool

which is intended to be a marketing tool for airports/ANSPs or operators willing to implement LPVs.

2.2 Draft methodology for OPERATOR Business Cases

Having a look to the existing literature, we can identify some ingredients to consider in our proposed

methodology:

2.2.1 Avoided disruptions:

The following simplification is proposed regarding the computation of avoided disruptions in the

EBCAST tool:

a) The computation should be based on a single aircraft. Consignation of the type of aviation (CA,

GA) should also be present.

b) The application should prompt for the proportion of destination airports with LPV/APV

procedures, asking also whether there is LPV/APV at home base.

c) The application should ask for the number of hours per year for the aircraft and the average

stage length.

d) The application should ask to choose a simple DDC avoidance model (average time savings

due to DDC avoidance, in minutes) or an advanced model. This advanced model should

consider the following:

a. An average percentage of DDC occurrences in the airports where the aircraft is

assumed to land, being, for instance, the default L.E.K. value of 0.59% a reference for

the user.

b. An average percentage of DDC potentially avoidable thanks to EGNOS, being again

the L.E.K. study values (48.5%) the ones displayed by default.

c. The number of landings in LPV-capable runway ends (L) will be the number of hours

per year divided by the average stage length, weighted by the percentage of destinations

where LPV are enabled.

d. The number of avoided disruptions will be (L) x (a.) x (b.).

MEMO



Version : 00-01

Date: 02.03.2015

/23





e. For commercial aircraft, the use of average costs of disruptions should be used. For

general aviation, just the savings in fuel and engine reserve will need to be computed

from the number of avoided disruptions and the average time lost (55 min). The tool

should also provide the average time saved, for reference for the simple model.

2.2.2 CFIT avoidance

Although the CFIT avoidance is a must to consider in wide-scope cost-benefit analyses (the LEK study

shows it as the highest source of benefit on an accrued basis), it may be weird to consider it in a single-

aircraft study, as these savings will not be actual savings, but average values of the risk, taking into

account accrued statistics. However, showing this benefit could be interesting for marketing purposes.

For these reasons, and after a deep consideration of the pros and cons of showing these safety benefits

on the Business Case tool, and after discussing the topic with remarkable stakeholders (PwC, Airbus),

we consider that the web tool should address the topic as a side argument, presenting the benefits on an

accrued basis: on one hand, the small amount of the cost savings for a single aircraft would not induce

the operator to consider it insignificant and thus discard the argument; on the other hand, the argument

is shown in any case, backing the presentation on its full power.

2.2.3 Mission savings

The Universal Avionics payback calculator [RD-10] asks the user for an estimated value of the saved

time by using LPV procedures, and outputs the resulting savings on fuel and engine reserve according

to straightforward computations using data from a small database, which could be replicated in our

model or completed according to the BADA database. This method seems simple enough to be taken

advantage of for our purposes.

Note that not always will there be time savings: for instance, if the new approach procedure is an

overlay of an existing NPA procedure, it is not expected to have mission savings on a regular basis

(there will be savings only when a disruption is avoided). In other cases, based on the flexibility of the

RNP procedures based on GNSS, there could be a reduction in the mileage. The amount of time saved

by the aircraft can be computed dividing the mileage reduction in both procedures by the nominal

velocity of the aircraft in those tracks.

The UA model uses this parameter (time saved) as the only input to measure the benefits of EGNOS.

In our BC tool, as we are analysing DDC or other reasons separately, this input will characterise the

time savings due either to the use of the new flight procedures or, in the case of SAR helicopters, the

mission time which could be saved because of the better accuracy of EGNOS; in any case, DDC or

CFIT impact would not be considered within this parameter.

Note that, in case that a nice procedure is used in one airport, for instance the base, which allows to get

a time savings ‘T’, and there is no time gain in the rest of LPVs, the indicated average flight time

saved must not be the one achieved in this base procedure, but instead an averaged one; If we’d like to

address this situation without side computations, the time saved could be set to T in this field setting

also to ‘0’ the percentage of destination airports with LPV.

The mission savings will take into account both the fuel and maintenance cost savings, but, for

commercial operators, the savings will need also to consider the crew costs, passenger compensations

and the passenger opportunity costs (representing the loss of potential future earnings for the airline).

MEMO



Version : 00-01

Date: 02.03.2015

/23





2.2.4 Investments

The literature is not homogeneous in considering the investment costs: some sources comprise all the

hardware, installation and operation placement costs into a single figure, whereas other sources detach

each of the chapters:

• Hardware: consisting of the price of the SBAS receiver, antenna, FMS (if new LRU is needed

to be installed) or MMR/FMS options.

• Integration: Consisting of the upgrade of existing avionics, needed cabling, connectors, etc.

• Installation: Hourly manpower needed for the refurbishing.

• Crew training: Costs for the training material and sessions to the crew.

• Documentation: This includes the changes in the aircraft operating manual, wiring diagrams,

MEL, etc.

• Certification: This includes the cost of the airworthiness certificate, in the form of a Service

Bulletin (SB) or Supplemental Type Certificate (STC) for the installation, and operational

approval. The latter, for holders of an air operations certificate (AOC), will take the form of a

compliance statement to a TGL (Temporary Guidance Leaflet) or AMC (Acceptable Means of

Compliance).

Depending on the applied understanding, documentation costs could include the tailoring of the

certification documents, or these could be considered fully as certification costs. In some cases, the

equipment STC cost is incurred in the avionics price. Besides, some costs have got full sense in the

case of retro-fitting, but not in a forward-fitting scenario (e.g. installation, which is provided within the

global price). In any case, the different cost items are there and their precise allocation must be made

for each exercise in a way that any element is not counted twice. In many of the consulted CBAs, the

investment cost is considered as an overall figure comprising all items.

In our methodology, all the different cost types above will be distinguished, to provide a bit more of

information to the user; however, if anyone does not know retail prices for particular items, an overall

figure could be input into just one of the elements, as a cap price for the whole investment, setting the

rest to 0.

Some synergies could exist (cost sharing) between modifications being undertaken to comply with

different PBN operations or equipage mandates: maybe one of the elements (such as the GNSS

receiver) is used to fly other PBN implementations or to comply with ADS-B out or datalink

requirements and the investment cost allocated to LPV could be only a fraction of its retail value.

2.2.5 Summary: net present value and items to consider for OPERATORS

The items above represent either one-off costs for the investment or yearly figures for each of the

benefits. Attending to these inputs, the temporal profile of the investment and costs and a pre-defined

discount rate and time period, an NPV could be obtained. The number of years for breakeven and the

internal rate of return (IRR) could also be obtained.

The recommended discount rate is 4% (in line with Eurocontrol guidelines). Accordingly, inflation

will not be considered, as the cost figures are understood to be expressed at constant price levels.

MEMO



Version : 00-01

Date: 02.03.2015

/23





Regarding the period of time to be considered in the analysis, it is recommended to use 10 years,

which are in line with the amortisation time of aircraft and electronic equipment.

Note that this methodology does not consider the potential increase of efficiency of the routes (reduced

separation) due to the improvement in ADS-B brought by EGNOS. There is neither a sensitivity

analysis proposed: the method could be used recurrently with different parameters. It is considered,

though, the estimated increase in the penetration of EGNOS in the network, as a % over the number of

destination airports enabled with LPVs.

The diagram below summarises the identified investment costs and benefits for the operator case, as

well as the produced outputs.

MEMO



Version : 00-01

Date: 02.03.2015

/23





Yearly figure

Inv

est

me

nt/

be

ne

fit

yea

rly

pro

file

An

aly

sis

pe

rio

d,

dis

cou

nt

rate

NP

V (

& I

RR

, y

ea

rs f

or

RO

I)

Table 1 – BC methodology scheme for the OPERATORS case

Benefits DDC avoidanceSimple model

Advanced model

CFIT avoidanceEconomic assessment of the average risk

Mission savingsFuel savings

Maintenance savings

Other commercial cost savings

Investmentcosts

Hardware

Integration

Installation

Crew training

Documentation

Certification

MEMO



Version : 00-01

Date: 02.03.2015

/23





The overall methodology for OPERATORS will look like the following:

1. Capture the aircraft characteristics (aircraft, operator type).

2. Configure investment:

a. Capture the investment costs (avionics, installation costs, etc).

b. Identify when the investment is to be made.

3. Configure savings per year:

a. Configure mission details:

i. LPV map for aircraft (LPV at home base [yes/no] + % of destination airports

with APV + yearly increase).

ii. Working cycle: hours per year, average stage length.

iii. Financial inputs: fuel and commercial cost.

b. Configure DDC avoidance model.

c. Configure CFIT avoidance model.

4. Configure economic parameters (e.g discount rate) and run BC.

MEMO



Version : 00-01

Date: 02.03.2015

/23





2.3 Draft methodology for AIRPORT Business Case Assessment

In the airport case, it is important to identify the benefits and costs associated to the ANSP or airport

authority and not mix them with the ones of the operators flying there. However, it is acknowledged

that the investment on a piece of infrastructure is often not recovered by whom puts it on place, as the

benefits behind arise in terms of downstream economic welfare due to the better accessibility to the

airport (e.g. more commercial activity, more tourism etc). Without going that far in the air transport

value chain, the amount of additional flights has been monetised for air transport producers –other than

airlines– (ANSPs, airports, ground services, manufacturers, lessors, travel agents, GDS/CRSs, catering

and maintenance) [RD-3], therefore it will be possible to build a BC for the ‘ground side’, in parallel to

the operator BC, following an exercise of abstraction. Wider benefits to the society (e.g. increase in

labour productivity, etc) will not be considered here, as these would go beyond the direct users of air

transport.

This approach will allow to not distinguish between particular circumstances of the ground-side

stakeholders at different States: in some cases, the ANSP is owner of the airport and the navaids; in

other cases, the ANSP pays for the flight procedures but the airport authority owns the airport navaids;

in other cases, there is an economic operator for the airport management but this one does neither has

the procedures published nor owns the navaids… This ‘ground’ single figure, which will be anyway

identified with a single airport for each analysis run, will bear the costs of the procedures, flight

inspection, operational approval and other associated costs and reap the benefits from the additional

incoming cash-flow (airport charges, increase of airport business) and phasing-out of the navaids.

The available literature shows scarce data and does not provide a ‘big picture’ of the ground side in

any of the analysed cases. The L.E.K. study [RD-5] considers both the costs of navaids and procedures

and distinguishes between airports and ANSPs, on a wide basis (the whole Europe), but, as stated

above, there will not be such a split in our methodology. That study also considers a small allocation of

the DDC avoidance benefit to the airport, which could be understood as the effect of retained fees due

to the avoided disruptions. This effect will be taken into account in a separate chapter of the benefits

(ground-side producer benefits), together with the fees from new flights enabled by the better

accessibility of the airport, therefore the DDC avoidance effect has not to be considered twice.

The only specific study for an airport found in the literature is the Mielec BC, which does only cover

the charges for the additional incoming traffic due to the disruptions which are avoided, in a traffic

forecast which does not consider the accessibility effect of the LPV procedure. Besides, being it a

visual aerodrome, the benefits related to the phasing-out of the navaids are not considered.

Other elements that should be taken into account are the temporal profile for the investments and

navaids rationalisation and the NPV computation parameters (e.g. discount rate). Regarding the period

for the analysis, although 10 years is the preferred time horizon, 20 or even 30 years could be used

instead, because the phasing out of some navaids could only take place after many years of legacy (i.e.

ILS) operation, that is, around 2040. The present methodology will suggest using 10 years for the web

tool, but adapt the period on custom BCs, if needed.

All in all, there are some parameters in the references which can be re-used, namely:

- Procedure investments.

- Ground-side producer benefits.

- Phasing out of navaids.

MEMO



Version : 00-01

Date: 02.03.2015

/23





2.3.1 Investments

The major costs on the airport side are the flight procedure design and publication and the operational

approval and other associated costs. The Mielec BC [RD-6] quotes prices for several activities within

these two major cost groupings, namely:

Procedure implementation costs - Procedure design

- Obstacle survey cost.

- Flight inspection

- Chart preparation (AIP format)

- AIP changes (publication)

Other associated costs - STAR design and publication (if needed)

- Airspace design

- Use of airspace rules establishment (optional)

- Air traffic collision analysis with neighbouring

aerodromes

- Establishment of collision avoidance rules

- Implementation of airspace changes

- Co-ordination with other airspace users

- Preparation of necessary documentation for

CAA ratification of airspace changes

- Lighting (if applicable).

- Periodic procedure reviews (if any).

Table 2 – Activities contemplated within each investment cost chapter for the airport case.

Note that it might be possible to find synergies in the costs for two runway ends at the same airport

when compared to 2 times the corresponding costs for one runway end. However, since the Mielec

case does not consider this situation, a separate cost per runway end will be considered instead.

The range of prices (at 2013) for the whole investment (per runway end) are: from €12,150 [RD-11] to

€27k [RD-5] for a procedure with LPV minima, through €23k [RD-11] for a complete work with LPV,

LNAV and LNAV/VNAV minima. The Mielec case [RD-6] provides also a cost of around €27K for

NPA+LPV procedures.

In this methodology, it is proposed to include only these two categories of costs in the web tool, for a

good compromise between simplicity and provision of information.

2.3.2 Ground-side producer benefits of avoided disruptions

The airport operator should know what charges would apply for the incoming aircraft. The Mielec BC

showed rates for usual operators of about 1,64 € (6,54 PLN) per movement, although a broad range of

prices is understood to apply depending on the situation. In general, the airport charges are published

for each destination. Then, the benefits to the airport would be the delta traffic with respect to the

baseline scenario, multiplied by the corresponding fees. This is straightforward and seemingly

sufficient, however, the increase of movements at an airport does not only benefit the airport manager,

but also other producers along the air transport value chain (e.g. travel agencies, ground services,

airport shops, ANSP, etc). Eurocontrol standard values document [RD-3] provides average figures for

“other producer benefits” per passenger flight (excluding fuel and labour), which address the revenues

from an investor perspective (in this case, the investment is the LPV procedure). As default value, the

MEMO



Version : 00-01

Date: 02.03.2015

/23





figure displayed there for domestic flights will be proposed, i.e. 661 € (2011 = 692 € 2013). Note that

this rate will vary over time and between routes, be different for marginal flights or a new scheduled

flight, and could be dramatically different for high-load passenger flights at primary hubs or commuter

flights at secondary destinations. For general aviation, the average value would be very close to the

airport fee.

This rate (r) must be multiplied to the number of landings due to the reduction of disruptions to yield

the yearly benefits on the ground side.

To get the number of avoided disruptions, the same methodology applied in the case of the operator

must be used:

- Average percentage of DDC occurrences in the airport (a): e.g. 0.59% as default.

- Average percentage of DDC potentially avoidable thanks to EGNOS (b), e.g. 48.5% as default.

- Number of landings (L): According to the statistics and forecasts available at the airport,

potentially varying per year. This is composed of both:

o The foreseen increase of traffic at the airport, without considering the LPV procedure in

the approach portfolio of the airport.

o The estimated proportion of the operating fleet equipped with SBAS avionics.

Normally, forecasts of the traffic are available at many locations (STATFOR) based on the

current infrastructure available at the airport; on the other hand, the accuracy on the

estimate for the proportion of equipped aircraft will be different if a new procedure is

available or not, being of interest here the baseline case (no new procedure).

- At any year, the number of avoided disruptions at the airport will be 0.25 x (L) x (a) x (b), as

the delays, in a first approximation, do not contribute to the lack of landings at the airport.

- The savings due to avoided disruptions, with respect to the base case, will consist of the

product of the ground-side producer rate (r) and the number of avoided disruptions.

2.3.3 Ground-side producer benefits of network accessibility

Another source of benefits is the ‘call effect’ that a new LPV procedure may induce in operators in the

area. For instance, a regional operator equipped with EGNOS avionics could shift plans for landing at

a primary airport if a neighbour small airport enables a LPV procedure (less airport fees, probably less

variability, almost the same performance). The benefits for this additional traffic will not only be the

difference of disruptions avoided by EGNOS with respect to a NPA or visual case, as this traffic would

not be part of the baseline scenario. The whole revenues for the additional traffic will be benefits due

to EGNOS, in this case. We will name this kind of benefits ‘network accessibility’ benefits. The

computation would be as follows:

- An estimate of increase of incoming movements due to EGNOS alone will be requested. This

will add up to the nominal traffic increase due to the organic growth of the airport or

serviceable population. Such increase could be modelled as a CAGR over the nominal forecast

traffic increase. For a proper profile of EGNOS-capable aircraft along time, the analysis of both

statistics and the plans of involved stakeholders would be necessary.

MEMO



Version : 00-01

Date: 02.03.2015

/23





- The benefits per year will consist of the product of the ground-side producer rate (i.e. “r”

€/movement) and the number of additional movements at that year, as it is understood that all

the additional traffic will be EGNOS-capable.

2.3.4 Navaids phasing-out

The final benefit to consider in the airport case is the savings in navaids maintenance upon

rationalisation of existing infrastructure. This kind of benefit will need to be assessed on a case by case

basis, as maybe there is no navaids to decommission. In case it applies, the following elements are

necessary to be evaluated:

- Which navaids, how many and of what type: e.g. one NDB? It is assumed that the navaids to

take into account are those over which approach procedures are built: if a conventional navaid

is used solely for en-route or arrival, its rationalisation could be based on the overlay of GPS-

only procedures, not specifically EGNOS.

- When would the rationalisation be undertaken? It is understood that this would not be

immediate to allow servicing the rest of the fleet for a reasonable period of time. There are

some possible scenarios: one according to the ICAO adoption scenario of SBAS (100%

penetration of APV procedures on IFR landings by 2016), and others for later dates.

Considering the current state of the play, a 2020 scenario seems the more optimistic of the

possibilities, which means setting the onset of the navaid phasing-out in Europe by this year.

- How much would this cost? To assess the cost savings, standard maintenance values and

equipment replacement costs need to be used. The L.E.K study shows the following values:

Parameter Cost (€ 2009)

CAPEX DME: 200 k€ ILS: 578.2 k€

VOR: 601.8 k€ VOR/DME: 801.8 k€

NDB: 75 k€ ILS/DME: 778.2 k€

OPEX (year) DME: 10.0 k€ ILS: 10.0 k€

VOR: 10.0 k€ VOR/DME: 10.0 k€

NDB: 5.0 k€ ILS/DME: 20.0 k€

Lifetime 15 years

Table 3 – Sample parameters for navaids rationalisation.

For simplicity, EBCAST will use these parameters, updated to 2015. The same lifetime will also be

applied to all navaids (for a detailed analysis it is suggested to contact ESSP).

The overall savings would consist of the maintenance cost of the phased-out navaids from the time

they are removed onwards, plus the capital expenditures for the hypothetical replacements that those

navaids would have to undergo.

Let us play with an example: in next page, both the baseline situation (no phasing-out) and EGNOS

scenario are displayed

MEMO



Version : 00-01

Date: 02.03.2015

/23





Upon EGNOS introduction, there would be an interest in decommissioning the two NDBs for which

there are two published NPA approach procedures to that airport. The phasing-out would take place

once the lifetime of the navaids is over, thus one NDB would be removed in 2016 and the other one in

2019. However, there are no plans of removing the VOR, hence its replacement in 2016 would take

place anyway. The accrued benefits in the exercise would entail the two replacement costs (CAPEX)

for the NDBs plus the maintenance costs in the period running since the removal of each NDB to the

end of the analysis period.

The methodology for obtaining the navaid removal benefits would be as follows:

1. Introduce CAPEX and OPEX figures for the selected navaids and expected lifetime (values

shown in Table 3 could be a reference).

2. Select number, type of navaid and year of decommissioning (yeari).

3. Savings per navaid = CAPEXi every ‘lifetime’ years + OPEXi from yeari onwards.

4. Accrued savings: Sum of all savings.

2.3.5 Summary

As in the case of the operator BC, using a pre-defined discount rate, it is possible to obtain the NPV of

the investment (and internal rate of return, even years before breakeven), considering a given period of

time for the analysis.

The overall methodology for AIRPORTS will look like the following:

1. Capture the airport characteristics (number of runway ends to consider EGNOS)

2. For each runway end:

a. Configure investment:

i. Capture the procedure investment costs.

ii. Identify when the investment is to be made.

b. Configure savings:

i. Configure traffic and EGNOS penetration profiles.

1. Baseline profiles (without procedures).

2. Estimated additional traffic driven by EGNOS alone.

ii. Configure DDC avoidance model and ground-side producer benefit parameters.

iii. Configure navaid phasing-out model.

3. Configure economic parameters (e.g discount rate) and run BC.

a. Net benefits will be obtained per runway end and per year.

b. Total benefits will be accumulated per year and discounted so as to compute the NPV.

The following diagram summarises the identified investment costs and benefits for the airport case, as

well as the produced outputs

MEMO



Version : 00-01

Date: 02.03.2015

/23





Per-runway end figures

Inv

est

me

nt/

be

ne

fit

yea

rly

pro

file

An

aly

sis

pe

rio

d,

dis

cou

nt

rate

NP

V (

& I

RR

, y

ea

rs f

or

RO

I)

Table 4 – BC methodology scheme for the AIRPORTS case

Benefits Ground-side producer benefits of avoided disruptions

Ground-side producer benefits of network accessibility

Navaids phasing-out

Investmentcosts

Procedure implementation costs

Other associated costs

MEMO



Version : 00-01

Date: 02.03.2015

/23





3 EBCAST operator manual

To support the methodology presented above, the web tool EBCAST (EGNOS business case

assessment tool) has been developed. This section explains the operation of such a tool. For details

on the meaning of the different parameters, there are contextual help icons; the user can refer to the

presented methodology as well.

The first screen shows a welcome message, a disclaimer on the use of the tool, access to this

document and the links to both the operators and airport business case applications:

Figure 1 –EBCAST home window.

3.1 Operator business case

The user would insert the aircraft characteristics, investment and benefit models configuration, and

then set up the general BC parameters. The aircraft consumption and maintenance parameters are

displayed from the aircraft name chosen in a list (the type of aircraft is obtained from this input as

well). The investment is configured by inputting the cost of the different items, plus the year when

the procurement takes place. Sample values are displayed by default: these can be overridden with

actual values – they are placed as an example only.

MEMO



Version : 00-01

Date: 02.03.2015

/23





Figure 2 – Aircraft characteristics and investment configuration detail

Then, the different benefit mechanisms can be configured. The driving element would be the

savings that EGNOS would introduce by itself in every mission, for instance by enabling shorter

tracks in a flight procedure, and this will be asked as the average time savings per movement. The

working cycle of the aircraft is then configured: is there LPV/APV available at the aircraft base?

How much is the percentage of destinations with LPV/APV available? How would this percentage

change along the years? The average mission time and commercial costs per minute are also

requested:

Figure 3 – Mission details configuration.

MEMO



Version : 00-01

Date: 02.03.2015

/23





From this information, the number of cycles per year is computed.

If the user wants to configure the delays, diversions and cancellations (DDC) avoidance model,

either a simple or an advance approach can be chosen. If the simple one is chosen, the average

additional time savings per movement is requested: that is, if one diversion of 50 min, out of 200

movements, is anticipated, and it is assumed that it could be avoided with EGNOS, then the

additional savings would be 50/200=0,25 min (per movement). In the advanced model, the average

percentage of DDC occurrences (as % of all movements) and the percentage of these potentially

avoidable with EGNOS, would be requested. Default values are included for reference.

Figure 4 – DDC avoidance configuration detail.

General parameters are requested afterwards:

Figure 5 – General parameters configuration.

And, finally, the savings for year #1 and the BC results are displayed. The timeline of the costs and

benefits are displayed as well.

MEMO



Version : 00-01

Date: 02.03.2015

/23





Figure 6 – Yearly savings and BC result for operators.

3.2 Airports business case

Regarding the airport BC, the airport characteristics, traffic and equipage forecast, investment and

savings model configuration are requested. With similar global-settings dialogs, the BC result is

displayed in the same way for the ground-side analysis.

First, the DDC model parameters are requested, as well as the airport traffic forecast in the baseline

scenario (no new procedure published). The application has been prepared for up to four runway

ends, therefore the portion of the movements per runway end has to be introduced. Here, the

forecast additional traffic due to EGNOS alone, would be input: for instance, if including LPVs at

one location would cause a shift of movements from a close airport with more expensive charges to

this one. The forecast profile of the overall equipped fleet, in the baseline scenario, would be input

as well.

MEMO



Version : 00-01

Date: 02.03.2015

/23





Figure 7 – Airport configuration.

The investment configuration consists of the cost and time of the implementation (per runway end):

Figure 8 – Investment configuration.

Then, the savings model would request how much an additional movement would consist of, and

the temporal application of the DDC avoidance model. The additional network accessibility benefits

are afterwards computed. Then, the capital and operating costs of the navaids are requested, and

which of these would be considered in a potential decommissioning plan (up to 10 navaids can be

considered):

MEMO



Version : 00-01

Date: 02.03.2015

/23





Figure 9 – Savings model and navaid phasing-out configuration.

Figure 10 – Decommissioning plans.

Finally, after the global settings of the BC (discount rate, period of analysis), the profile of the

overall costs and benefits is displayed and the result is obtained:

Figure 11 – Global settings of the simulation.

MEMO



Version : 00-01

Date: 02.03.2015

/23





Figure 12 – Airport BC result.

ESSP-MEMO-13973 Simple Business Case methodology for LPVs...

Documents

Transcript of ESSP-MEMO-13973 Simple Business Case methodology for LPVs...