CP1 CBA recalculation delivered to the European Commission and Single Sky Committee positive opinion on CP1 proposal

18.12.2020
News

The COVID-19 virus is affecting the whole ATM industry, which is particularly salient on the tremendous drop of passengers and flights across the world. As an effect of this crisis on the aviation sector, this impact will also affect the CP1 CBA calculation as well. 

On 4th of November 2020, SDM has forwarded the updated CP1 to European Commission. The document was presented during the last Single Sky Committee meeting on the 24th of November, where it was generally welcomed. 

The present document “Common Project One – Update of the original CP1 Proposal CBA” comes as an addendum to the original CP1 Proposal CBA and provides the updated results of the overall cost-benefit analysis of the CP1, based on:

  • The updates in the technical and geographical scope of the CP1, as well as the new implementing deadlines for the different Sub-ATM functionalities (Sub-AFs);

  • The update in air traffic forecast resulting from the impact of the COVID-19 pandemic.

This CBA update is conducted based on a 5-year traffic recovery scenario for the European airspace (5 years from 2020 to recover the traffic of 2019), which at this stage appears as an average “likely-to-happen” scenario. However, a sensitivity analysis was performed on this core assumption to measure the impact in case of significant deviation in the future. 

Applying this recovery scenario on the updated CP1 content, the overall result is still positive taken into account, reduced traffic, especially heavily reduced savings related to capacity and the identified postponements in implementation of solutions.

CP1 CBA recalculation 2020 (file 1)

The several deviations depicted in the graph above visualise these impacts.

In addition to this, a sensitivity analysis with a reduced fuel price by 50% and an even longer recovery phase of 8 years, so-called worst case-scenario, will still generate a positive NPV, which is a solid sign of the robustness of the CP1 content and CBA.

The graph below shows this scenario and will generate a positive NPV in 2030 (€2.7B) and payback occurs before 2025:

CP1 CBA recalculation (file 2)