Focal point U4U for EUROCONTROL: Anne Baleras
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Fundamental Review of EUROCONTROL Activities
The Deloitte report is fundamentally flawed.
The report contains many positive assessments of EUROCONTROL and its role, which should be noted and welcomed. However, it also contains a number of questionable proposals.
Separation of MUAC (Maastricht Upper Area Control Centre)
The report proposes that the Agency should separate from the en-route centre in Maastricht and hand it over to the four states it serves. This proposal is probably the most absurd of all. Admittedly, it is consistent with the corporatisation or even privatisation of the ANSPs (Air Navigation Service Providers) which was prompted by the Single European Sky programme. However, this SES programme has failed miserably. FABs (Functional Airspace Blocks) and other gadgets have not succeeded in lowering costs or really improving the quality of service (the thorny question of seamless service from centre to centre remains open).
When the SES was launched, another option was envisaged: making EUROCONTROL a service provider on the FAA (USA Federal Aviation Authority) model, reducing the number of en-route ATC (Air Traffic Control) centres to four or five in order to serve the whole of European airspace and thus reduce costs by around 50%. This option was buried by the States for all the best reasons in the world (from their point of view), with the support of users who believed somewhat naively in the magical benefits of corporatisation of ANSPs.
Faced with the unfulfilled promises of the SES project, it would be high time to take advantage of the current crisis to return to common sense: a single service provider is needed to serve a single space, at costs that are finally under control, putting in place technical means and procedures that are finally coherent, if not unique, all under the responsibility of the EUROCONTROL Member States.
This is the vision that Deloitte should have proposed instead of supporting the continued application of an outdated concept.
The report advocates that the Agency should be ‘a neutral honest broker’, which is in contradiction with the SES project and SESAR3 (Research Programme supported by the SESAR Joint Undertaking). If EUROCONTROL, in liaison with the regulatory authorities, including the European Commission and EASA (European Aviation Safety Agency), is not a player in the necessary change of European ATM (Air Traffic Management), then an opportunity will be missed.
Research & Development and SESAR
Here again, the report merely recommends the continuation of a questionable R&D policy. First of all, it should be noted that SESAR was based on research work prior to its creation and among these, on the work of the Brétigny centre. Research is an activity that largely escapes the traditional recipes of management. It is absurd to say, as the report does, that research should focus on ‘deployable’ solutions. That is implementation through engineering. Research, for its part, must imagine the solutions of the next day and this activity must tolerate trial and error, development and validation times. You only need to learn about the processes that led to the development of the COVID19 vaccines to understand what ‘research’ really means.
The report proposes as an option the closure of Brétigny, with most of the gains coming from the expected departure of employees. Transition costs are underestimated. Research is also an atmosphere: research laboratories do not mix harmoniously with administrative services.
Training and Luxembourg site
The report endorses, which is somewhat paradoxical from a market perspective, the Agency’s ban on competing with States and their ANSPs in its training catalogue, outside of EUROCONTROL’s strict network management responsibilities. It also threatens to close down all training activities if the Agency does not comply, without at all examining whether it does not make economic sense to centralise specialised training for a limited audience, instead of duplicating efforts at national level.
The report argues, without providing any evidence, that locating in Luxembourg is not cost-effective. Not a word, of course, about the process of supporting staff in the event of a move to Haren.
It should also be noted that the report does mention certain transition costs in the event of the closure of Brétigny and Luxembourg, which would probably offset the meagre benefits that would result.
Managerial blah blah blah
The report does not spare us the elements of language that go well in any report of this type: lean thinking, diversity, agility, customer-centric, omnichannel internet strategy, ecosystem…
Internal processes are supposed to be out of control (after all the expenditures already made on quality and silo destruction projects). Staff is accused to engage in self-assigned tasks, despite the tightening of meticulous controls by management. Worse, there are, supposedly, no real controls on the resources allocated to objectives. One wonders what the purpose of annual evaluations is in this context… would there not rather be a lack of senior management skills?
The report launches the canard of ‘staff as the main resource, the most precious capital’ to immediately regret that last year only ten (or eight) negative evaluation reports were produced and to lament the long careers that would prevent from firing long standing employees for hiring new ones. The report welcomes the increase in precariousness through the hiring of contract workers without questioning the consequences on ‘retaining and developing the skillset of the future’. It would be funny if it wasn’t tragic.
The report also accuses staff of being out of touch with the needs of partners and of not adhering to the new vision of its DG. After so much campaigning to re-establish this connection, the question should be asked, if the accusation is really true, whether the responsibility does not lie with management rather than staff. However, it should be noted that the report contradicts itself somewhat by saying that ‘connectedness with stakeholders has improved’.
Finally, a constant in all these successive managerial reports is the mistrust, if not contempt, for the Agency’s statutory staff. Nothing symbolises this more than this proposal: ‘Enable supervision of EUROCONTROL staff by contract staff’.
However, the role of social dialogue is reaffirmed. Whether it is a real social dialogue remains to be proven…
Recasting of the EUROCONTROL Staff Regulations
Unsurprisingly, the report proposes to reform a Statute that is considered too rigid. Attacking staff is always a good recipe in a consultant’s report.
But if there is rigidity, where does it come from? Not from the Staff Regulations themselves, but from the practice of ‘Job Management’ (‘career brackets’) which locks each person in a position that prevents him from evolving. The report denounces a direct effect of this practice, which forces excellent technicians to evolve towards their alleged level of managerial incompetence. Moreover, the Talent Development Programme suggested by Deloitte is incompatible with the concept of career brackets.
It should be noted that the Administration has complete freedom to play with the organisation chart and does not deprive itself of this freedom. The rigidity of the Statute is a convenient myth to explain the failings of senior management.
In fact, the Agency has long since stopped recruiting on so-called ‘permanent’ contracts and instead recruits on indefinite and limited-terms contracts.
The report also denounces ‘change fatigue’ in an Agency where the Staff Regulations are supposedly a straitjacket preventing change. Indeed, the report immediately proposes a new change.
The report recommends a new departure plan, described as urgent, taking advantage of the opportunity provided by the ageing of the existing staff. The risk associated with this plan, the destruction of skills, is not discussed, even though a Strategic Workforce Plan should be completed, which should lead to a 30% gain in costs, thus in fact inducing a major new upheaval.
On a purely economic level, the first effect of these departure plans is to reduce the wage bill, but by bringing the counterpart of the reduced salary to zero (the work provided). It is not certain that this is a good calculation: the zero profitability of this new expenditure weighs on the Agency’s capacity for action. It is questionable whether it would not be better, on the contrary, to take advantage of the experience and skills of the staff until the normal retirement age.
The report welcomes the replacement policy (2 recruitments for 3 departures) and advocates the termination of temporary contracts, in addition to other measures (Early retirement, art 41.4…) which will undoubtedly contribute negatively to staff morale and involvement. The abolition of the expatriation bonus after 5 years will have a negative effect on attracting new talent and increasing staff diversity.
The report lists on page 52 an impressive range of talents that staff need to possess in order for EUROCONTROL to fulfil its functions. These talents are almost all rare, specialised skills that are difficult to acquire and retain. It is singularly short-sighted to consider them as disposable staff.
Administrative staff should be recruited as Local Agents, as proposed by Deloitte, creating a new category that will be fraught with frustration, unease and future demands.
Pensions
The report proposes to review the pension system to the detriment of staff. This is probably another way of remunerating the most valuable capital. Pensions, it should be remembered, are a deferred salary, i.e. a vested right of staff. These vested rights are to be understood in the actuarial sense of the term, i.e. the accumulated contributions actually give entitlement to pensions as calculated according to the rules in force at the time.
So what can be done?
Europe (the EU and other European States) needs quality ATM services, delivered at an acceptable cost. Today, European ATC costs are significantly higher than the average of other continents, which has a negative impact on the European economy. While the European airspace has its complexities, other airspaces also have their complexities. The truth is that Europe has inherited a political fragmentation, but now technically absurd, in the field of aviation. Fragmentation is also a security risk: various hardware and software, dissimilar procedures, the uneasy passage of information from one centre to another…
EUROCONTROL has developed tools to mitigate the effects of this situation. It is time to do away with them, by proposing a bold policy to the States: to make EUROCONTROL the European FAA. This project will come up against many political obstacles, but it is the battle to be fought to finally modernise European ATM.
EUROCONTROL should also trust its staff. The Agency’s strengths, cited by the report, are the product of competent, motivated and sometimes even passionate staff. Instead of developing strategies to curtail the rights of staff and to increase their precariousness, the Administration should seek to develop their skills and motivation. It should share its vision by seeking buy-in. Social dialogue is an instrument at its disposal but, more broadly, there is a need to instil a team spirit and to share objectives. Let us reverse the deleterious managerial approach that runs through the Deloitte report. Successful structures are those that know how to mobilise forces, not those that go from social plans to reorganisation plans.
U4U will contact the other unions to prepare a unitary response.
Analyse de U4U : version PDF
Note from the DG of EUROCONTROL
Dear Colleagues,
I am writing to you in relation to the fundamental study of the Agency’s business activities that was commissioned by the Agency in 2020. The review was carried out independently by Deloitte and submitted to the Agency yesterday, 27 January 2021.
You can access the full report here and you can also watch a short video here with Hilde Van de Velde (the Partner at Deloitte who led their work), where she briefly presents their main findings and recommendations.
This was a strategic “root and branch” review, which examined virtually all aspects of our activities, locations, financing, staffing and internal rules. To the best of my knowledge, an independent external review of the Agency of this nature has not been undertaken in many years, despite the many changes that have occurred to European aviation over the last 20-30 years, such as: the liberalisation of airlines and airports; the evolution of the EU’s Single European Sky legislative framework; changes in technology; sustainability and many other changes to the sector. However, over the years, the operational framework within which the Agency conducts its activities has largely remained unchanged. Needless to say, in my opinion, the work of Deloitte was long overdue given the changes to the industry over many years. COVID-19 is not a factor in the report.
Their report contains important findings, key recommendations and a proposed implementation plan for the period 2021-30, all designed to best position EUROCONTROL for the long-term. As well as Deloitte’s global consultancy expertise, their findings are based on thorough research derived from an extensive consultation program, during which they engaged with over 120 stakeholders at the most senior level across the industry, including many DGCAs, CEOs of airlines, ANSPs, airports, trade associations and staff representative organisations. Deloitte also engaged with over 50 internal stakeholders, trade unions and staff representatives. On that basis, I believe that their report findings have a sound basis and clearly represents the needs and future expectations of our European aviation industry.
I warmly welcome one of their major conclusions, which indicates that there is 90% support for EUROCONTROL and that the key assets of the Agency relate to network management, aviation route charges, and data provision services (operational, financial, economic, performance, sustainability and cyber). This is encouraging and a strong framework to build on and it rewards our efforts over the last few years. I note Deloitte have made a number of sensible recommendations in relation to all of these domains.
At the same time, Deloitte have also reached some worrying conclusions and they have identified a number of weaknesses, which need to be addressed. I note in particular the following points:
- There are significant levels of redundancy and “self-tasking”, as well as a lack of coherence in the portfolio of the Agency activities;
- MUAC ANSP should be fully separated from EUROCONTROL, under the direct ownership of the Four States (as MUAC autonomy is a sub-optimal arrangement);
- Training services should be limited to only those that support network activities and the training institute at Luxembourg should be closed;
- Innovation activities should be conducted by the Agency as a “Network of Innovation Labs”, which could potentially be located in Brétigny, but alternatively could be located in Brussels HQ, including the relocation of the airspace simulator services (in which case, this would lead to the closure of the Brétigny facility);
- Research’ activities should be limited to SESAR activities which have a clear path to deployment;
- The Staff Regulation and Social Dialogue procedures are deemed no longer fit for purpose for a modern organisation and must be reviewed as they are a constraint on the Agency’s ability to evolve and limit the ability to tackle structural issues;
- The Pension Scheme is too expensive and needs to be reviewed;
- As one of a menu of options to implement the findings, there should be a targeted redundancy programme, along with a Strategic Workforce Plan to attract the best talents from across the industry; and
- There is a lack of transparency in the cost of doing business.
Deloitte have also made recommendations for a new organisational structure, along with the establishment of a Transformation Office for a temporary (2 year) period.
It is important not to over worry about these proposals. Change always causes uncertainty and personally I have always found that dealing with matters early gives the best result. Over the next few months I will engage with the Member States to determine their appetite for these recommendations and then I will of course have discussions with your staff representatives to manage a reasonable process.
Since becoming Director General, I have implemented many changes designed to unleash the potential of the Agency. I constantly seek to increase the productivity of the Agency so that it can truly support European aviation. I believe the Agency has advanced well in this regard and that it plays a central role in European aviation. I also believe that this is broadly recognised by our Member States and stakeholders. However, I do concede that the ability for the Agency to go even further in the years ahead is limited due to the current framework we operate in. This has been independently articulated by Deloitte.
Many of their recommendations make sense to me and I expect many staff will also see the logic behind their thinking. However, I accept that some recommendations and findings will be difficult to accept by some or for some Member States to support. However, I do not believe that we can discount their findings and recommendations and if we really want the best value from the Agency, then we need to be prepared to make choices. I ask you as a member of staff to consider this report with an open mind. I believe the Agency has a bright future.
Over the coming months we will engage with our Member States and we will also consult the Standing Committee on Finance (SCF), the Air Navigation Services Board (ANSB), the Civil Military Stakeholder Committee (CMSC) and the Network Management Board (NMB), with a view to bringing a proposed plan to the PC in June for appropriate decisions.
I do not underestimate how significant a task this will be, but at the same time, I truly believe that now is the time to make key decisions for the benefit of the organisation and European aviation.
I will keep you directly informed on how the process and decisions evolve in the months ahead and thank you for taking the time to read this update and the report.
I will be in touch.
Eammon Young
28 Jan 2021
Single European Sky
From October 2018 17-19th, the Air Traffic Controllers European Unions Coordination (ATCEUC) held it 54th Committee meeting. Find the final communiqué attached. The communiqué stresses that humans have to remain at the core of air traffic management (ATM), both at service provision and at customer level, and that ATM must not only be about cost and targets but first and foremost about safety for passengers and airlines.
Consultation on European Commission Implementing regulation on an SES performance and charging scheme: The European Commission published a draft Implementing Regulation laying down a performance and charging scheme in the Single European Sky (SES).
The draft implementing regulation is open to one-month consultation.
Full text of the draft | Access to consultation
A4E press release on airspace inefficiencies: On November 3 Airlines for Europe (A4E) issued a press release calling on the EU to “radically reform air space architecture and unlock more efficient routes to benefit passengers and the environment”.