A user perspective Cyriel Kronenburg Regional cooperation A

A user perspective Cyriel Kronenburg

Regional cooperation ÖA good solution that enhances safety oversight Ö Despite low traffic levels Ö Using economies of scale

RSOO development should not lead to increased costs and charges ÖSplit entities should be financially self sufficient ÖThe sum of total financial requirement after the split should not be substantially different from the original ÖLocal operators should pay their due share for regulatory services received

Unfortunately this is not always the reality for users ÖCosts often are recovered through ANS charges when regulation and service provision are combined ÖFollowing the separation of functions, charges paid to the new service provider often remain the same

A real world example ÖIn case X, ANS charges generated an estimated USD 40 million per year, funding combined regulation and ANS provision ÖIn case X, ANS service provision was separated from regulation and oversight ÖThe RSOO in case X has funding problems

The airline reality ÖThe airline continues to contribute USD 40 million annually ÖIt is unclear however if the revenue that used to fund the safety oversight is being transferred to the new RSOO

The solution is not more funding ÖIt all starts with transparency, one of ICAO’s key requirements ÖOnce functions are separated, transparent allocation of existing revenues and costs should take place

A transfer aimed at efficiency ÖUsing an RSOO’s economies of scale, more combined funds should be available without increasing the operator’s bottom line costs

Cross subsidization should be avoided to all possible extent ÖRegional trends show the “blurring” of funding for safety oversight and regulatory services through ANS charges ÖThe result is increased crosssubsidization often negatively impacting international commercial users

The role of the State: ÖEnable a transparent separation of functions ÖEnsure a transparent split of assets and income ÖEncourage local funding models for regulatory services provided

Conclusion ÖIATA supports the safety oversight enhancement through an RSOO ÖTransparency of revenue allocation is essential in it’s creation ÖBottom line operator costs should remain the same

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