VIGNETTE

SMART SOLUTIONS FOR THE AVIATION OF TOMORROW

ANNUAL REPORT 2016

LFV ANNUAL REPORT 2016 1 VIGNETTE

LFV CONTROLS TRAFFIC IN THE AIR

LFV is responsible for the efficiency and safety of flights in Swedish The example here airspace. LFV’s controllers provide follows a flight air navigation services for around between Stockholm 2,000 flights in Swedish airspace Arlanda Airport and Helsinki Airport. every day.

The controller's task is to provide air navigation for pilots and to separate aircraft vertically and laterally so that they do not come too close to each other.

They also ensure that flights become as efficient as possible in that aircraft fly the shortest possible route and do not need to wait in the air before landing. This is better for the environment and increases availability in the air. The flight plan for a flight is If the destination has Air navigation services is much more than air established at Euro- restrictions, for example due control in Brussels. traffic management. For everything to work, the to military exercises, the efforts of many employees are needed every day, flight plan is submitted three and it is necessary for the operational IT systems hours before take-off. The to deliver the large quantities of data required for flight will then have to take a flight and for air traffic management. another route.

The airspace is the flight's infrastructure that can be likened to both railways and roads. There are airspace charts that have been designed 07:00 to function for the flight and that also take For LFV, the flight begins with into account geographical characteristics. LFV the pilot or the airline's opera- designs approach and climb-out paths to and tional office submitting a flight plan one hour before departure from airports and air lanes. In short, LFV takes that contains all the facts responsibility for the charts in the air. about the flight needed by air traffic management. Every shift for an LFV controller starts by going through the day's conditions and current flights. Sitting in position means controlling and moni- toring traffic and being in contact with the pilots operating in Swedish airspace.

Flights in the upper Swedish airspace are handled from the control centres in Stockholm and Malmö, while towers and the control centre for remote air traffic management handle the take- off and landing phases.

2 LFV ANNUAL REPORT 2016 VIGNETTE

When controllers end their shift and hand over to a colleague, a summary is also made of what has happened during their time in position.

Responsibility for a flight alternates between different controllers who are responsible for different sectors of the airspace. The flight is now at cruising altitude, around 10,000 metres. 08:20 The aircraft is now over the Baltic Sea halfway between the Swedish mainland and Åland. This is where the boundary of Swedish airspace is, and LFV's controller hands the aircraft over to the Finnish air traffic management.

CONTENTS

4 This is LFV 6 The Year in Brief 8 Director-General's Statement 10 Operating Environment and Market 08:05 12 Strategy and objectives 14 Customer focus Air Traffic Control gives instructions for taxiing to 16 The Environment the take-off runway. Taxiing 18 Aviation safety is the stretch from the gate at the terminal to the 20 Innovation take-off runway. 22 Cooperation and partnerships 24 Efficient approaches 08:10 26 The customer's needs Almost immediately after 29 Board of Directors' Report take-off, the pilot calls the 39 Comments on the Income Statement controller responsible for the air parcel, or sector, that 40 Income statement is closest to the airport. 41 Comments on the balance sheet and funds statements 42 Balance Sheet 44 Funds Statement 08:00 45 Accounting and The pilot calls air traffic Valuation Principles management and requests 49 Notes clearance and permission to start the engines. 54 Reporting in Accordance with the Performance Plan 55 Reporting in Accordance with the Appropriation Directions 56 Risks 57 Dividend Proposal At the take-off runway, clearance for take-off 58 Audit Report is given and the flight 60 Board of Directors takes off. LFV’s controller monitors the aircraft on 61 Group Management the radar screens. 62 Five Years at a Glance 63 Abbreviations and Explanations

LFV ANNUAL REPORT 2016 3 THIS IS LFV

THIS IS LFV

LFV's primary role is to provide safe, efficient and environ- mentally adapted air navigation services for civil and military aviation. LFV also has to work to ensure that the transport policy objectives are achieved. LFV is a state-owned enterprise offering air traffic management services, air traffic manage- ment and other related services in Sweden and internationally. In order to meet increased demands for capacity, availability and sustainability, LFV develops new innovative services and concepts. LFV is involved in developing European airspace through cooperation and partnerships. In 2016 LFV had around 1,100 employees and a turnover of SEK 3.1 billion.

LFV OFFERS SMART SOLUTIONS FOR THE AVIATION OF TOMORROW

Solution-oriented, needed to meet the requirements asso- flight procedures. LFV also provides the committed and innovative ciated with the certified services that LFV Swedish Armed Forces with military source LFV is to be a reliable and flexible partner that operates at an airport. For example, LFV data, military flight procedures and other helps customers to develop their operations. has provided flight inspection services to specific products. By being solution-oriented, committed and airports for 60 years. innovative, we create conditions to develop Environmental services long-term relationships with customers and Airspace services LFV has vast experience of designing other stakeholders. LFV is to offer smart The complexity of designing airspace and flight procedures and the airspace around solutions for the aviation of tomorrow. flight paths is increasing. Aircraft must airports. LFV can contribute to airports' fly effectively from economic, capacity, efforts to prepare for an environmental Local air navigation services security and environmental perspectives. impact assessment by ensuring that all LFV provides air navigation services at 20 A great deal of the work concerns coopera- requirements and regulations are met in Swedish airports, from Kiruna in the north tion across borders and between different an effective way. to Malmö in the south. LFV creates a close actors. Besides flight inspection, LFV also and long-term working relationship with offers obstacle measurement, and proce- Education its customers in order to create comprehen- dure and airspace design. Through its joint ownership of the ATS sive solutions that support their business academy Entry Point North AB in Malmö, and operations. Technical services LFV has developed a broad expertise in LFV has extensive experience of different training and professional development, both En route technical systems for air traffic management as regards basic controller training and cus- Since 2009, Danish-Swedish airspace has and support services for airports. LFV’s tomised special courses. LFV also offers basic been a single airspace. LFV and Naviair run operation and management of systems and orientation courses for actors in the industry. the air traffic management of this airspace premises is in accordance with applicable via a jointly owned company called NUAC. legislation, norms and standards. LFV offers REVENUE DISTRIBUTION, % Straight routes make planning easier and technical/operative expertise, aviation safety Other Other revenue, 3 Route together LFV and Naviair are developing expertise, investigative expertise, etc. commercial charges, 55 more efficient air traffic management. Our revenues, 4 customers are the airlines that operate in Compensation Information services from the the airspace. In Sweden, LFV is responsible for the associated company management of aeronautical information NUAC, 23 Airport services for both civil and military aviation. LFV LFV is an experienced provider of servic- provides users of airspace with information Revenues es that simplify and streamline air traffic about regulations, maps, flight paths, radio for local air navigation management. LFV also provides everything frequencies, navigation instruments and services, 14

4 LFV ANNUAL REPORT 2016 THIS IS LFV

LFV IN SWEDEN AND THE WORLD LFV's international operations are mainly concentrated to Europe, Africa, the Middle East and the Far East. LFV has experience of work in more than 50 countries.

CONTROL AIR NAVIGATION SERVICES CENTRES NORRKÖPING INTERNATIONAL

Gothenburg Landvetter Luleå Umeå Malmö Headquarters Since May 2013, LFV is a subcontractor Halmstad Malmö Uppsala Stockholm ÖKC – is a terminal providing air traffic management Karlsborg Ronneby Vidsel Sundsvall – is a control that services to Global Aerospace Logistics at Kiruna Stockholm Arlanda Visby control centre for handles the Abu Dhabi Airport's airports in the Kristianstad Stockholm Bromma Åre Östersund remotely operated airspaces over United Arab Emirates. LFV also has Linköping Malmen Sundsvall Timrå Örnsköldsvik air traffic manage- Östergötland and several ongoing assignments, such as Linköping City Såtenäs ment, RTS. Sörmland. flight inspection in Norway.

FIVE DELIVERY AREAS

DELIVERY AREA PRODUCTS AND SERVICES CUSTOMERS

EN ROUTE Since 2009, Danish-Swedish airspace has been a single airspace. National and international airlines, LFV and Naviair run the air traffic management of this airspace via a jointly the Swedish Armed Forces. owned company called NUAC.

THE SWEDISH ARMED Civil and military air navigation services have been integrated since 1978. The Swedish Armed Forces. FORCES LFV provides air navigation services for military aviation at both air bases and in other parts of the airspace.

THE DEREGULATED Municipal and private airports can procure air traffic management services Municipal, regional and private airports. SWEDISH MARKET in the deregulated Swedish market for local air navigation services.

SWEDAVIA Air traffic management services for state-owned airports were Swedavia’s airports in Sweden, from Kiruna in re-regulated in 2014. the north to Malmö in the south.

THE INTERNATIONAL LFV has long experience of working in the international market Airports, agencies, organisations and MARKET and has experience from around 70 countries. companies. Examples include flight inspection, airspace design, airport services, technical services and staffing services.

LFV ANNUAL REPORT 2016 5 THE YEAR IN BRIEF

THE YEAR IN BRIEF

Lower charges for airlines Straight routes in New radar technology On 1 January 2016, Sweden reduced the northern Europe taken into operation charge for airlines by 4.9 per cent. This is On 23 June, straight routes, Free Route In October, LFV’s first WAM facility, Wide the third consecutive year that the charge Airspace, were established between the Area Multilateration, was taken into has been reduced. The streamlining meas- Danish-Swedish airspace and Finland, operation. WAM is a surveillance sensor ures implemented by LFV in recent years Estonia and Latvia. Straight routes yield that determines the aircraft's position by have contributed greatly to the opportunity economic advantages for airlines, while triangulation. The technology has a higher to reduce these charges. also reducing their environmental impact. accuracy than traditional radar.

Prize for innovations LFV and SAAB make Contracts for flight inspection In March 2016, LFV received two prizes at a joint investment in LFV has won a renewed contract to the World ATM Congress in Madrid for its remote operation provide flight inspection at Swedavia's air- innovative work to develop Remote Tower On 29 June, LFV and SAAB announced ports. The contract runs for four years. On Services (RTS). the formation of the joint company SAAB the international market, LFV has signed Digital Air Traffic Solutions. The new a five-year contract for flight inspection LFV and Swedavia sign letter company, with LFV owning 41 per cent and at Avinor's airports in Norway. of intent on remote operation Saab 59 per cent, offers digital compre- In March, LFV and Swedavia signed a letter hensive solutions in the area of remotely New primary radar for of intent on the possibilities for remotely operated traffic management. The com- better control and safety operated air traffic management at five -air pany strengthens LFV's opportunities to Recent years have seen reports of flying ports. The parties are to jointly investigate lead, develop and drive the digitalisation of without a transponder, especially over the the conditions for establishing RTS at the remotely operated air traffic management southern Baltic Sea. In order to provide airports in Kiruna, Umeå, Östersund, Visby and is an important step in LFV's invest- LFV’s controllers greater control over the and Malmö. ment in innovation and development. Baltic Sea's airspace, LFV has decided to invest in a new primary radar that will be The control centre in Airspace strategy for Rwanda placed in southern Sweden. Sundsvall to be upgraded In competition with eleven international and expanded consultancy firms, LFV won the assignment High levels of punctuality In June, LFV and Saab signed an agreement to produce a Civil Aviation Master Plan, an LFV's delivery capacity remains high and to upgrade the system at LFV's control cen- airspace strategy for Rwanda. stable. Punctuality was over 99 per cent. tre in Sundsvall with new functionality for On 19 May, LFV had system problems the air traffic management of two airports which meant major disruptions to traffic. in parallel. This investment is part of LFV's Together with the supplier, LFV took strategic work to secure competitive and measures to minimise and prevent the flexible offers. The control centre has also effects of disruptions to its delivery. been expanded to handle remotely operated air traffic management at several airports.

6 LFV ANNUAL REPORT 2016 THE YEAR IN BRIEF

thousand was the number of airspace movements in 2016. Punctuality in 2016 was over 99.9 per cent in LFV's deliveries. 726This is an increase of 2 per cent compared with 2015. 100

. per cent was the result for the aviation safety objective that billion was LFV's turnover in 2016. This is a LFV is not to contribute to any aviation safety related event decrease of 6 per cent compared with 2015. 100which might result in someone being injured or killed. 31

DISTRIBUTION OPERATING EXPENSES, % REVENUES, (SEK MILLIONS) EXPENSES, (SEK MILLIONS)

3,500 3,000 Depreciation, 5 Salary costs, 27 3,000 2,500 Compensation 2,500 to associated 2,000 company 2,000 NUAC, 25 1,500 1,500 1,000 Other Social 1,000 operating security 500 expenses, 6 contribu- 500 Pension tions, 9 0 0 costs, 18 2014 2015 2016 2014 2015 2016

KEY FIGURES 2016 2015 Change Net turnover (SEK millions) 3,149 3,364 - 215 Profit/loss after financial items (SEK millions) 14 39 - 25 Return on equity (%) 1 4 - 3 Equity/assets ratio (%) 11 12 - 1 Investments (SEK millions) 161 108 + 53 Movements (thousands) 726 712 + 14 Number of full-time equivalent employees 983 1,012 - 29

LFV ANNUAL REPORT 2016 LFV ANNUAL REPORT 2016 7 DIRECTOR-GENERAL'S STATEMENT DIRECTOR-GENERAL'S STATEMENT

AVIATION IS IMPORTANT FOR SWEDEN

The traffic year 2016 was a record year for aviation in Sweden. LFV’s air traffic controllers handled 726,000 aircraft movements in Swedish airspace. This was an increase of 2 per cent compared with 2015.

Profit/loss for the year Profit/loss for the year amounts to SEK systems. LFV will continue to develop Sundsvall is responsible for air traffic 14 million. This result is affected by the smart solutions for the aviation of tomor- management at Örnsköldsvik Airport. historically low interest rates through an row. We will do this partly through partner- Sundsvall Timrå Airport will soon be increased pension liability and lower inter- ships, both nationally and internationally. remotely operated, and Linköping City Air- est revenue. The current reference period, port is next in turn. It is also very gratifying RP 2, which will run until the end of 2019, Investment in new radar that LFV has received several awards and entails demands on continued streamlining Military flights without a transponder prizes during the year for its work with RTS. measures. Much has been done, and since mainly occur over the southern Baltic Sea. During the year, LFV formed SAAB 2014 LFV has implemented cost-reduction In 2016, LFV decided to invest in a new Digital Air Traffic Solutions AB together measures of just above SEK 200 million. By radar facility that will enable LFV’s control- with SAAB. The company is intended to developing effective approaches and inno- lers to see aircrafts without a transponder market, sell, develop and conduct digital vative solutions, LFV will continue to be over the areas for which LFV is responsible. remotely operated air traffic management among the leading actors in the industry. LFV will invest approximately SEK 55 million nationally and internationally. in the new radar facility, which will be In March 2016, LFV and Swedavia LFV’s delivery capacity ready to be taken into operation in 2020. signed a letter of intent on investigating LFV's delivery capacity remains high. 99.9 LFV also has effective cooperation with, the conditions for establishing remote air per cent of all flights en route in Swedish air- e.g. the Swedish Armed Forces to obtain traffic services for five airports. Air traffic space take place without any delays caused relevant information. at Kiruna, Umeå, Östersund, Visby and by the air navigation service. In May, how- Malmö will be handled from the central ever, there were three technology-related control centre at Arlanda. LFV's Board has events that led to delays and disruptions for “An effective given me a mandate to continue work on airports, airlines and passengers. Together aviation the objective of signing agreements in the with our subcontractors, we have imple- first quarter of 2017. mented several changes during the year so infrastructure is that the same problems will not arise again. Collaboration and partnerships a prerequisite for create sustainable customer benefit Business, customer and market LFV is part of Borealis, an alliance through LFV has won several business deals during availability which air navigation service providers in the year, which is gratifying. In Sweden, and Sweden's northern Europe work together to create Kristianstad Airport chose LFV as its part- a single airspace from Ireland in the west ner and provider of air traffic management competitiveness.” to the Baltic States in the east. In June, services. In Norway, LFV won the contract straight routes were established between for flight inspection. Since 2013, LFV has Great interest in the Danish-Swedish airspace and Finland, had a partnership with GAL ANS in the remote air traffic management Estonia and Latvia. Straight routes mean United Arab Emirates. LFV operates in an industry that is under- economic advantages for airlines, and going great change. Continued digitalisation reduce their environmental impact. Infrastructure of the airspace is important for the development of systems As part of the COOPANS alliance LFV, An effective aviation infrastructure is a and approaches. As the first certified service together with other air navigation service prerequisite for availability and Sweden's provider, LFV has almost two years’ experi- providers, continues to harmonise systems competitiveness. In 2016, LFV invested ence of digital remote air traffic manage- and develop new concepts for air traffic approximately SEK 160 million in upgrades ment. With over 6,400 hours’ operations, management. This will mean greater and the development of new solutions for LFV continues to develop Remote Tower capacity, lower costs and a reduction of air traffic management and administrative Services (RTS). LFV's control centre in aviation's environmental impact.

8 LFV ANNUAL REPORT 2016 DIRECTOR-GENERAL'S STATEMENT

“It is very gratifying that LFV has received several awards and prizes during the year for its work with RTS.”

Corporate culture, values and brand During the year, LFV has commenced work to implement a new brand plat- form, LFV's Navigator. This is part of the work to develop our corporate culture and establish values. An initiative is also being undertaken to develop LFV's leaders through clarifying the role and responsi- bilities of leadership and linking it to LFV’s overarching change process.

With a focus on aviation safety For LFV, aviation safety is the foundation of operations. In 2015, a cross-functional pro- ject was started that has a focus on aviation safety in order to harness the recommen- dations yielded by internal and external analyses. The project was concluded at the end of 2016 and resulted in improved communication, updated training and a new organisation for aviation safety tasks.

Thank you After just over three years, I am now leaving my role as Director-General. I welcome my successor and I would like to thank our customers, partners and suppliers, and of course all my LFV colleagues, for a fine cooperation.

Olle Sundin Director-General

LFV ANNUAL REPORT 2016 9 The development of airspaces, aviation and technological opportunities makes various forms of cooperation – partnerships, alliances, companies – increasingly important.

10 LFV ANNUAL REPORT 2016 OPERATING ENVIRONMENT AND MARKET

2016 A RECORD YEAR FOR AVIATION

The number of aircraft movements in Swedish airspace increased in 2016 and is expected to see continued growth in the coming years, albeit at fairly low levels. At the same time, EU requirements on reduced charges to airlines entail continued demands to further streamline air navigation services.

Air traffic continues to increase LFV is at the forefront of this European The second reference period, RP2, will In 2016, the number of movements in harmonisation. Through the jointly-owned run until the end of 2019 and means that Swedish airspace increased by 2 per cent company NUAC, LFV and Denmark's Naviair the fixed-price revenues for en route to approximately 726,000. All traffic catego- provide air navigation services in joint operations will decrease every year. ries increased, international by 3 per cent, Danish-Swedish airspace. The COOPANS domestic by 2 per cent and overflights by alliance is coordinating the development New forms of cooperation 1 per cent. The largest increases were and implementation of a joint air traffic The development of airspaces, aviation and in traffic to and from Arlanda and for management system. technological opportunities makes various overflights in northern Sweden. Overflights forms of cooperation – partnerships, con- are traffic that either takes off or lands High demands on efficiency and delivery sortia, alliances, companies – increasingly in Sweden. There has also been a shift of In the EU, the programme SESAR (Single important. Several air traffic management air traffic over the Baltic Sea further into European Sky ATM Research) aims to make providers have far-reaching partnerships Sweden, which gives longer distances in air traffic management more efficient. with technology suppliers in order to Swedish airspace. Developed in the early 2000s, the overall optimise efficiency and utility for customers The number of movements is not objectives are to: regardless of whether these are airports or increasing to the same extent as the num- • triple the capacity of the airspace. The airlines. During the year, LFV has started a ber of passengers, which is due to higher need for increased capacity is mainly jointly owned company together with SAAB, passenger load factors and larger aircrafts. concentrated to the heavily trafficked SAAB Digital Air Traffic Solutions AB, in Swedavia reported almost 40 million pas- airspace over north-western Europe order to develop, market, sell and conduct sengers at its ten airports, an increase of (United Kingdom, France, Germany, the remotely operated air navigation services. 5 per cent compared with 2015. Benelux countries). Traffic in Swedish airspace is expected to • maintain or improve aviation safety, Straight routes for more efficient airspace see continued growth, albeit at low levels. irrespective of the increase in traffic. For airlines, straighter routes mean shorter • halve the cost of air traffic management. travel times, lower fuel costs and a reduced A borderless airspace • decrease the environmental impact of environmental impact. The EU has a vision of a borderless airspace, each flight by 10 per cent. LFV collaborates with air traffic manage- Single European Sky. The USA's unified air ment providers from eight different coun- traffic management is the role model. In Each country establishes its own national tries in northern Europe in the Borealis order to streamline air traffic in Europe, objectives within these four areas. Alliance. The aim is to find areas where there must be cooperation between states For the first reference period, RP1, additional streamlining can be carried and coordination between civil and military which ended on 31 December 2014, LFV out in order to benefit our customers and aviation, like there is in Sweden. achieved all of the objectives. As regards LFV as an air navigation service provider. the reduced charge, the requirement is Borealis' next big objective is to introduce DISTRIBUTION OF TRAFFIC, % directed towards air navigation service straight routes in northern Europe by providers because they are responsible for 2021. A step towards this goal was taken Overflights, 42 Domestic, 21 the greatest share of the en route charge. in June 2016 when straight routes were At the same time, it is the states that established between the Danish-Swedish determine the charge. The route charge is airspace and the airspace block NEFAB decided annually by the Member States of East (Estonia, Finland and Latvia). To date, Eurocontrol's Standing Committee, and in only Sweden, Denmark and Ireland have Sweden it is the Swedish Transport Agency offered straight routes. Inter- national, 37 that announces the charge.

LFV ANNUAL REPORT 2016 11 STRATEGY AND OBJECTIVES

Since 2014, LFV has pursued a comprehensive change process to ensure that LFV is competitive, efficient and attractive in the future. This programme for change is called Position 2019.

LFV operates in an industry that (like many • A greater number of drones in the others) is undergoing great change. The airspace places new demands on FOCUS operating environment is changing, and regulation and air navigation services. AREAS 2016 LFV's conditions are affected by political • A changed security policy situation. decisions, regulations from government CORPORATE CULTURE agencies, the European Commission and LFV's journey of change • Businesslike the development of the national/inter- 2014 saw the start of LFV's journey of • Commitment and drive national market. Our operations must be change to achieve Position 2019. Position • Simplification and streamlining inclined to change and must constantly 2019 stands for LFV being business like • Solution-oriented adapt to new conditions. and competitive in all areas and driving LFV's customers are demanding that the market forward with new technology. • Brand platform we streamline and improve our delivery. LFV's programme for change is to be Markets that were previously monopolies implemented by 2019 and LFV shall have AVIATION SAFETY CULTURE have been opened up to competition in achieved its financial goals. At the same • A reporting, fair and several locations in Europe and many time, efforts to develop LFV's corporate learning culture changes have already been made in LFV's culture has made it more businesslike with • Safety commitment home market, Sweden. a focus on customer benefit. Aviation safety is the foundation of operations, and LFV’s • Communication Trends in the operating aviation safety remains very high. • Resources, skills and conditions environment that affect LFV • Systematic safety management • Moderate traffic development in LFV’s business plan 2016–2020 Europe, but strong growth in the Middle All five perspectives have a number of main INTERNATIONAL GROWTH East and Asia. objectives with associated sub-goals and • Still relatively low oil prices. activities. Every unit has its own operational • Expanded market knowledge • Continued revenue control from the plan with goals and activities that support • Focus on priority markets, EU through legislation on reduced the main objectives of the business plan. products and operational assignments en route charges. The objectives are broken down by function • Enhanced harmonisation and integration and by unit. LFV's managers and specialists • Digital air traffic management of air navigation services in Europe. have individual target contracts. LFV's top • Increased demands and regulations from priority is to maintain and develop good COMPETITIVENESS the operating environment, e.g. through relationships with its customers, both • Reduced costs the EU, the European Aviation Safety nationally and internationally. LFV is also • Increased efficiency Agency and the UN aviation body ICAO. to offer smart innovative solutions for • Greater competition for aviation the aviation of both today and tomorrow. • Greater drive towards digitalisation related services. Through active stakeholder dialogues and • Increased digitalisation affects the high quality and delivery performance, LFV • Stronger delivery capacity development of services and places is well positioned to continue being a lead- higher demands on information security. ing actor in air traffic management services.

12 LFV ANNUAL REPORT 2016 STRATEGY AND OBJECTIVES

LFV'S FIVE PERSPECTIVES AND TWELVE MAIN OBJECTIVES 2016 – 2020

Corporate Operations and Economy Customers and Employees culture delivery sales

• Leadership and • Proactive efforts to • Long-term fulfil- • Achievement of sales • A performance collegiality with a continuously develop ment of the own- and sustainability culture that customer focus aviation safety. er's financial goals. targets on the Swedish prioritises target and businesslike • Maintenance of and international fulfilment and conduct based on goals from the EU markets. develops employee aviation safety. performance plan • Establishment of RTS skills on the basis of FOCUS operational needs. AREAS 2016 regarding delays. (Remote Tower • Active work to reduce Services) in Sweden • Committed environmental impact. and an RTS offer employees and internationally. being an attractive • Improvement of employer. competitiveness for Good and trustful the product portfolio. relationships with stakeholders and • Harnessing of digitali- customers. sation to increase competitiveness.

LFV’s five perspectives term fulfilment of both external demands ings, customer groups and various events. • Corporate culture on cost and charge reductions and the International business and the commercial • Operations and delivery owner's financial goals. The owner's goal is market for air traffic management services • Economy for return on equity over a business cycle have not developed according to plan; this • Customers and sales to amount to 4 per cent and for the equity/ is partly due to deregulations not being • Employees assets ratio in the long term to be at least implemented or becoming delayed. LFV has 15 per cent. been involved in several tender procedures For Corporate culture, a new brand platform Profit/loss after financial items for 2016 but has not won business to the desired has been implemented during the year. amounts to SEK 14 million, and the return extent. The 2017 goal for international For Operations and delivery, work on avi- on equity for the year is thereby lower than business will be revised. A major initiative to ation safety has been an important focus the owner's goal. Viewed over a business develop international business and position area. LFV has achieved its aviation safety cycle, the goal is still met. The equity/ ourselves is the company jointly owned with objectives and developed the process for assets ratio at year end was 11 per cent. SAAB, SAAB Digital Air Traffic Solutions AB, following up and steering its aviation safety It is assessed that the owner's goal for which is intended to market, sell, develop work. There has been a paradigm shift in the equity/assets ratio is not possible to and conduct digital remotely operated air approach and steering so that the focus is achieve with the current model of financing traffic management. on proactivity, with follow-up from board the pension liability in the balance sheet. Many initiatives and investments are level to the operational activities. The coming year holds major challenges, being carried out to develop collegiality LFV pursues continuous environmental for which reason there will continue to be and leadership. Target contracts, pro- and sustainability management. Care for a cost focus and streamlining. grammes for leader profiles, follow-up of the environment is a part of our daily work. For Customer and sales, efforts have been the results from employee surveys, work- LFV is conducting a comprehensive made to continue developing good relation- place meetings and work with LFV’s brand efficiency programme to achieve the long- ships. Examples include customer meet- platform are important parts of this work.

LFV ANNUAL REPORT 2016 13 VIGNETTE

CUSTOMER FOCUS

LFV is to be a reliable and flexible partner that helps customers to develop their operations. By being solution-oriented, committed and innovative, we create conditions to develop long-term relationships with customers and other stakeholders. LFV is to offer smart solutions for the aviation of tomorrow.

LFV is a leading actor in an industry that is An attractive partner for the future LFV's investment in research and devel- undergoing great changes, both nation- In 2016, LFV continued to build on the opment contributes to greater safety, cost ally and internationally. Conditions are new brand platform with a focus on cus- efficiency and capacity, less environmental changing at an accelerating pace, and the tomer needs and expectations. Being an impact and to the development of new customer's expectation of sustainable and attractive partner for the future requires and existing products and services. LFV is efficient deliveries is in focus. In order to skilled and knowledgeable employees recognised and respected nationally and meet customer needs and continue leading who are solution-oriented, committed globally for a high level of innovation with and driving development, LFV seeks part- nd innovative. a capacity to drive established and well nerships and alliances, nationally and inter- LFV's customer promise states: “We functioning concepts forward. nationally. LFV is to offer smart solutions help our customers to position them- LFV continuously develops new for the aviation of tomorrow – and to be selves”. This means always looking to our approaches to increase its efficiency. the actor that customers choose and want customers' best interests and working with A current example is the training of air to continue doing business with. aviation safety, innovation and effective traffic controllers for authorisation in LFV's customers are divided into five approaches in order to develop services more sectors to enable greater flexibility delivery areas: and products for the aviation of today according to the present traffic situation. • En route and tomorrow. • The Swedish Armed Forces Aviation safety is LFV's top priority and Cooperation and partnerships • The deregulated Swedish market is included in all processes. This is achieved In order to develop smart solutions and • Swedavia through interaction between humans and offer air traffic management together with • The international market technology, regulations and organisation. other interesting products and services,

14 LFV ANNUAL REPORT 2016 CUSTOMER FOCUS

CUSTOMERS AND STAKEHOLDERS MEETINGS IMPORTANT ISSUES

AIRPORTS • Customer meetings • Local operational meetings • Information exchange • Follow-up of agreements • Follow-up of delivery • Aviation safety meetings • Delivery reliability • Aviation safety • Airport development and new services THE SWEDISH ARMED FORCES • Strategic, tactical and operational meetings • Technical infrastructure, agreements and follow-up at all levels • Information exchange and exercise planning to meet the Swedish Armed Forces' particular needs AIRLINES • Strategic meetings about 5 times/year • Economy and capacity • Tactical meetings with airlines 4 times/year • Operational meetings PILOTS • Experience exchange • Pilots and air traffic controllers meet LFV'S OWNER • Four-monthly meetings and other meetings • Objectives, strategies and follow-up of operations with the owner's unit at the Ministry of Enterprise and Innovation • Interim reports and annual reports EMPLOYEES AND MANAGERS • Workplace meetings • Information meetings • LFV’s change process • Values and corporate culture • Employee survey • Leadership forum • Operational information • Intranet TRADE UNION REPRESENTATIVES • Group collaboration • Local collaboration • LFV’s change process • Values and corporate culture • Trade union day with the participation of • Operational information • Strategic and operational questions group management GENERAL PUBLIC/MEDIA • lfv.se • Annual report • Press releases • LFV’s mission, role and areas of responsibility • Social media • LFV's offer and services SUPPLIERS AND PARTNERS • Agreement and follow-up meetings • Delivery • Quality • Cooperation SUPERVISORY AUTHORITY • Supervision and follow-up • LFV's delivery • Quality • Certificate compliance • Charges SWEDISH TRANSPORT AGENCY • Consultation meetings AND EUROCONTROL

LFV's new values are intended to be a guide for its work, decisions and strategies. LFV's objective is for customers and stakeholders to perceive LFV's employees as solution-oriented, committed and innovative in order to contribute to the development of our customers’ business and to be a reliable and flexible partner.

SOLUTION- COMMITTED INNOVATIVE ORIENTED

both traditional tower services and Together with various partners, we partici- development and improvement of remote operation, LFV cooperates with a pate in seminars focusing on remote oper- LFV’s services. LFV has also established variety of actors. ations. LFV has also had a large number of contacts with the airlines that handle visitors from all over the world who have information dissemination. Customer events and customer meetings visited the control centre in Sundsvall to LFV's customer managers follow up deliv- see the research and innovation that form LFV meets its customers on the web eries and performance and are responsible the basis for a entirely new way of working Early 2016 saw the launch of the new for developing customer relationships. with air traffic management. lfv.se, which focuses on LFV's offers to During the year, LFV has arranged customers and stakeholders. The site several meetings with both existing and LFV develops its relationships with pilots also contains information for the general potential customers. LFV attended global LFV's controllers are in contact with public, the media and others interested in industry congresses, such as World ATM airline pilots in their day-to-day air traffic LFV's operations. in Madrid and ATC Global in Beijing, to management, and these pilots are an Information for flight planning by present services and develop relationships important stakeholder group for LFV. airlines and pilots on LFV's site AROWeb for the future. One example is the customer group has also been modernised and developed. LFV's exhibition stand at World ATM formed almost twenty years ago at the The number of page views on AROWeb in Madrid received considerable attention, control centre in Stockholm in order to amounted to just over three million in 2016. with live broadcasts direct from Sundsvall promote understanding between control- enabling visitors to view remotely oper- lers and pilots. The group's discussions ated air traffic management in real time. provide a concrete contribution to the

LFV ANNUAL REPORT 2016 15 THE ENVIRONMENT

SUSTAINABLE AVIATION

LFV affects the environment directly through its own operations and indirectly through emissions from the aircraft for which LFV provides air navigation services. LFV's environmental manage- ment is an important part of its ambition to conduct long-term sustainable operations that create value for all stakeholders.

LFV has identified three areas with energy use and business travel. Business significant environmental impact: travel by rental car uses environmentally • emissions resulting from operational air friendly vehicles in the first instance. navigation services LFV has operations in many locations in • emissions from business travel Sweden and extensive international work. • emissions from energy consumption 1600tonnes was LFV's contribution To reduce travel, priority is given to virtual to the CO2 reduction. meetings, which increased by about 80 per Education, knowledge and processes cent in 2016. Our employees knowledge of LFV's envi- LFV's environmental management system The company cars and staff cars that ronmental impact and of what they can do is certified according to ISO 14001, and LFV offers are environmentally friendly to decrease it is essential. For this reason, LFV coordinates environmental manage- vehicles. When renting a car, it is routine all new employees at LFV are to undergo a ment in order to develop services and to choose environmentally friendly basic environmental training programme, approaches that reduce both direct and vehicles when possible. 56 per cent of all which is then repeated at least every other indirect environmental impact. rental cars were environmentally friendly year. This basic training was updated in LFV is covered by the Act on energy audits, vehicles. LFV mainly consumes energy for 2015, and 660 employees received training and work on this commenced in 2016. An the operation and heating of its own or in 2016. In addition to this mandatory initial step describes energy use broken down rented premises and continuously reviews basic training that covers all employees, by operations, buildings and transports. The rental agreements and energy consump- all future operational managers are audit forms the basis for the priorities and tion. For its headquarters in Norrköping, to undergo training that includes the planning of further work in 2017. LFV has signed a green tenancy contract. environment. LFV’s controllers also are trained in how to manage air traffic in an Direct environmental impact Indirect environmental impact environmentally friendly way. LFV's own emissions come mainly from LFV works with the development of

16 LFV ANNUAL REPORT 2016 THE ENVIRONMENTVIGNETTE

LFV has a focus on CDM system at Stockholm Arlanda Airport the environment For a number of years, Swedavia has been working to introduce a CDM system, Collab- orative Decision Making. The system is intended to share relevant information between LFV is to contribute to a actors at the airport, such as exact arrival and departure times, in order to improve reduction in carbon dioxide coordination and reduce waiting times before take-off. LFV's employees at Arlanda have emissions from aviation in played a key role in this work and have actively participated in its implementation. Swedish airspace.

LFV is to work actively to reduce its own carbon dioxide emissions. Study of routes provides an opportunity to reduce emissions Two students on the logistics programme at Linköping University have carried out LFV is to work actively a degree project on the environmental effects when flights are planned around a to reduce its energy country's airspace in order to reduce en route costs. For example, a flight from Asia consumption. to Western Europe may be planned with the longer route over the Baltic States and Poland instead of straight across Sweden. The study shows that the extra distance

increases emissions by approximately 5, 900 tonnes of CO2 annually. From a European perspective, emissions are considerably greater.

airspace, procedures and systems support air traffic in the court’s verdict provide tion prior to its application for a new

in order to create better conditions for opportunities for major reductions of CO2 environmental permit. reducing emissions from aviation. The emissions. However, Swedavia Landvet- effect of air navigation services on avia- ter has applied for consideration by the Better environmental follow-up tion's total emissions is around 6 per cent, Supreme Court with reference to some of Together with the Swedish Transport and the goal is to reduce carbon dioxide the conditions in the environment court Agency (TS) and the Swedish Defence emissions in Swedish airspace by an verdict, and so it has not yet been possible Research Agency (FOI), LFV is running a average of 1,000 tonnes per year over the to take any of the changed conditions in project that aims to improve calculations period 2014–2019. The implementation the verdict into operation. of emissions from Swedish aviation. Under of the CDM system (Collaborative Decision For Swedavia Arlanda, LFV has provided the Climate Reporting Ordinance, TS is Making) at Arlanda is calculated to have route expertise in a number of investiga- responsible for the annual calculation of contributed to a saving of 522 tonnes of tions, including an application to the Land Swedish aviation emissions, and enlists the fuel, which corresponds to approximately and Environment Court of Appeal for an help of FOI. Contributions from LFV's radar

1,600 tonnes of CO2. amendment to the condition covering data can be used to refine the model for As one of nine members, LFV is part of the take-off of low-speed traffic. LFV also calculations. the Borealis Alliance, which runs a compre- assists in investigations of steeper glide Introducing a fuel module into LFV's envi- hensive project for straighter routes in its path angles and changed patterns of ronmental follow-up tool GAIA can enable members' airspace, Free Route Airspace, runway use. LFV to review the quality of FOI’s annual FRA. Fully implemented, it will yield Several of the condition changes accom- calculations. This can contribute to deeper significant fuel savings and thereby reduce panying Arlanda’s new environmental and advanced insights into how the environ-

emissions of carbon dioxide. permit in 2015 can lead to reduced CO2 mental impact of aviation can be reduced. emissions, e.g. opportunities to land on a Expert assistance for environmental different runway at night and to shorten LFV buys carbon offsets permit considerations certain routes. However, these have not In order to become carbon neutral for LFV has long provided airport owners yet been taken into operation. the emissions arising from LFV's own oper- with its route expertise in cases concerning On behalf of Swedavia, LFV has also ations, LFV buys certificates from projects environmental permits. performed an analysis of the environmen- that generate equivalent reductions in In spring 2016, LFV provided expertise tal efficiency of flight operations at Åre emissions, at the same time as they aim to for Swedavia Landvetter’s proceedings at Östersund Airport. promote social and economic progress in the Land and Environment Court of Appeal. LFV has provided Karlstad Airport with the developing countries in which they are The conditions for the management of expertise in the form of a technical descrip- carried out.

LFV ANNUAL REPORT 2016 17 AVIATION SAFETY

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LFV's goal is for the aviation safety index to 3be less than 3. AVIATION SAFETY

Based on the foundation of aviation safety, LFV works to continuously maintain and enhance its high aviation safety. LFV's overarching goal is to conduct its operations in such a way that the objectives of aviation safety are achieved. All employees at LFV have an aviation safety responsibility related and linked to their roles, responsibilities, mandates and assignments. Aviation safety is LFV's DNA.

Aviation safety is LFV's top priority, and transponder, runway incursions, airspace for the part of its operations that are work on aviation safety permeates all incursions, drones and technology. conducted remotely. The biggest change relevant processes. Aviation safety work compared with a conventional tower is has traditionally focused on investigating LFV’s aviation safety index the handling of the visual presentation. events that have already happened in The aviation safety index (ASI) is used to This shows traffic to the controller on order to find the cause so that they can be continuously control LFV's exposure to 360-degree screens instead of through prevented from happening again. risk. Separation minima infringements and the window of a control tower. Based on For LFV, it is important to continue to runway incursions are assessed on the almost two years’ experience of remotely develop its aviation safety work and move basis of severity and how LFV has affected operated air traffic management, the the focus from being reactive to being the events. disruption plan for loss of the visual proactive, linked to increased volumes of The assessments are made by means presentation has been revised and clari- traffic and new demands. of Risk Analysis Tool, RAT, a tool that has fied. During the year, no event has been This means moving the focus from been developed by Eurocontrol. Data is reported that deviates from traditional single events that deviate from the normal set in relation to the number of aircraft tower services. to learning and gaining experience from movements handled by LFV to form an everything that functions well in day-to- aviation safety index. LFV's goal is for ASI Runway Incursion programme concluded day operations. to be less than three. The goal was met LFV has worked on a project together with Aviation safety work is to permeate the for 2016, meaning that LFV's aviation Swedavia, the Swedish Armed Forces and entire organisation and be a natural part of safety is very high. the air navigation service provider ACR. our processes and working methods. LFV The project was concluded in spring 2016 has identified six focus areas: separation Remote Tower Services and aviation safety and the result of the work was submitted minima infringements, flying without a LFV particularly monitors deviation reports to the Swedish Transport Agency in April.

18 LFV ANNUAL REPORT 2016 AVIATION SAFETY

AVIATION SAFETY INDEX ––– 2013 ––– 2014 ––– 2015 ––– 2016 aviation safety strategies. Members of the 4 committee are the Director-General, Head of Operations, Head of Safety Department, Safety Manager, Head of Systems and 3 LFV's goal is for ASI to be less than 3 Development and the Director of HR. The Safety Department is responsible for coordinating and preparing documen- 2 tation for FSK, and LFV's Safety Manager has responsibility for overarching aviation safety issues. Every operational unit at LFV 1 has specially designated persons respon- sible for the coherence of aviation safety work, while every person with operational 0 duties is responsible for aviation safety Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec linked to their position and tasks. Briefing LFV continuously follows developments in aviation safety and sets an aviation safety index for every and debriefing before and after a shift is month. LFV's goal is for the index to be less than three. also part of our aviation safety culture and LFV's local operational work.

Monitoring All recommendations were adopted with- All reporting from LFV's various operations out remark, and work on an implementa- Aviation safety is collected, analysed and processed. tion plan is in progress. is LFV's top Conclusions and recommendations then form the basis for improvements and Drones priority and is developments with respect to approaches Drone operations is a relatively new and aviation safety issues. phenomenon in the aviation industry. included in all LFV's aviation safety culture encourages The project “RPAS in the control zone” all employees to report things that are a (RPAS is an established abbreviation for processes. This is deviation from the normal. These reports drones) is intended to highlight the possi- achieved through are important in aviation safety work bilities for handling drones in the control and form the basis for measures to raise zone without being forced to close the interaction aviation safety. The reporting tendency is airport, as is the case with the regulations continuously monitored, and the reports applicable today. between humans form the basis for deeper analysis. During The project focuses on scheduled flight the year, more than 20 investigations of and existing airspace in order to quickly and technology, incidents were performed in order to find solutions to today's problems in air- regulations analyse influencing factors and implement space close to airports. measures to raise aviation safety. and organisation. Investigations are performed according The aviation safety culture project to a model that supports investigators in In 2015–2016, LFV ran a cross-functional ational unit at LFV, aviation safety is an seeking causes and influencing factors in project in order to preserve and strengthen unbroken chain of responsibility. For other a broader context instead of focusing on its already good aviation safety culture. group units, responsibility is delegated, individual performance. Among other things, the project resulted and everyone at LFV is required to have a LFV's employees write about 2,200 in a new definition of aviation safety, a new good knowledge of aviation safety and of reports per year, which corresponds to organisation for the work and new working how their work can affect aviation safety. 0.3 per cent of all the movements that forms. The basic training for all employees LFV has organised the work of aviation LFV handled in 2016. was reviewed and a structure developed safety at all levels, both strategically and for communicating aviation safety issues operationally. The overarching level has International partnerships linked to messages, channels and target the Aviation Safety Committee (FSK) and LFV participates actively in European avia- groups. The project was concluded in a Safety Department that coordinates the tion safety work through bodies including summer 2016 and its activities were taken work of the operational units. Eurocontrol and CANSO. Safety groups over by line managers. The Aviation Safety Committee (FSK) within these organisations collaborate on steers and follows up aviation safety the development and dissemination of LFV’s organisation for aviation safety levels and is the decision-making body best practices and the development of EU From LFV's Board to the Director-General for aviation safety partnerships and the regulations, in dialogue with the European and group management to every oper- focus of LFV's long-term work and for Aviation Safety Agency (EASA).

LFV ANNUAL REPORT 2016 19 INNOVATION

SMART SOLUTIONS AND INNOVATIONS

LFV uses technology to develop smart solutions for the aviation of tomorrow. In partnership or independently, LFV pursues intensive research to achieve efficient and sustainable air traffic management and better utilisation of both Swedish and international airspace. This is done while maintaining or increasing safety.

Research and innovation is rooted in a exchange between aircraft and ground when new aircraft types are introduced. number of strategic development areas centre, efficient climb and descent profiles, For the airlines, it is important to be able to that are based on LFV's future challenges. increased automation in air traffic -man fly the straightest route at the right altitude The goal is to develop new concepts and agement systems, information exchange as this is the most efficient method from solutions with a clear benefit that increases between various actors and remotely both a cost and environmental perspective. safety, efficiency, capacity, availability and operated solutions. The effect on emissions and noise levels sustainability. Work is conducted both is becoming increasingly important for all nationally and as part of the European Increased digitalisation actors to take into account. research programme SESAR. For LFV, which is a technology-intensive The question of how air navigation Examples of current research areas enterprise that is highly dependent on services are to be designed the day include efficient arrival and depar- real-time systems and sensors, digitalisa- unmanned craft coexist with ordinary ture sequence, increased information tion can contribute to increased delivery aircraft such as aeroplanes and helicopters capacity, innovation and cost efficiency. is also a priority. The digitalisation of air navigation services at airports increases efficiency, availability and safety. The digitalisation For a number of years, air traffic management has been operated remotely, of air navigation representing the biggest change in a relatively conservative industry for many services at airports years. Digitalised information is sent to a centre where the controller’s work is based increases efficiency, on visualisation on 360-degree screens availability and instead of in a control tower at an airport as previously. Digitalisation of aeronautical safety. information also means that data becomes available to all users quickly and cost effec- tively via the internet. This creates new Increasing automation business and cooperation opportunities. LFV is seeing an increasing degree of There are further opportunities for automation in all areas, and technological developing en route traffic management, developments are advancing quickly as THE 2016 LIU SCHOLARSHIP for example, by sending data via the regards visualisation, support for decision- For a number of years, LFV has awarded an internet from sensors and systems to making, analysis and follow-up. Identifying innovation scholarship to a student or em- controllers’ workplaces or positions in a what this means for recruitment and ployee at Linköping University to highlight research and innovation associated with air standardised, safe and efficient manner. training is a priority. LFV and the Swedish traffic control and aviation. This prize winner Maritime Administration are working for 2016 was Prithiviraj Muthumanickam, together with Linköping University to a doctoral student at the Department of New demands on airspace Science and Technology, Linköping University. Optimising the infrastructure in the air can develop a concept for training for auto- His research has, among other things, looked streamline and maximise use. Airspace mation. The project runs over four years at workloads when an air traffic controller conditions change in the case of, e.g. new and is funded by the Swedish Transport works in a control centre remotely managing air traffic control at several airports. destinations, major new construction and Administration.

20 LFV ANNUAL REPORT 2016 VIGNETTE

Optimal staffing Staffing planning is an important part of the work to streamline the production of air navigation services. By building math- ematical models, various scenarios can be evaluated and staffed optimally while also improving the follow-up of planning and production. KODIC is an example of a project that has proved the value of, and REMOTE OPERATION AND DIGITALISATION developed the basic conditions for, an efficient utilisation of personnel to staff a There is great interest in Remote Tower Services around the world number of airports and thereby optimisa- among airports, air traffic management providers and technology tion of resource planning. suppliers. LFV was first in the world to introduce operational approval for remotely operated air traffic control. Cooperation and strategic partners LFV has cooperation with Linköping Uni- On 21 April 2015, the world's first aircraft landed at Örnsköldsvik Airport that was versity, and in 2016 around ten projects managed from a control centre in Sundsvall. The industry is undergoing great were carried out together with senior change, and digitalisation, new working forms and innovation will be decisive for researchers and doctoral students. coping with expectations on increased efficiency and cost reductions. The Swedish Transport Administration In late November, Sundsvall Timrå Airport commenced a gradual transition to and Horizon 2020, the EU Framework RTS, and as of the first quarter with RTS in 2017, all air traffic there will be remote Programme for Research and Innovation, operated. Next in turn is Linköping City Airport, which is planned for the second are the major funders of LFV's research. quarter of 2017. Vinnova supports and finances various LFV has also received several prizes and awards for its work with air traffic man- research projects in Swedish airspace, agement, and a large number of visitors have been to Sundsvall during the year in and LFV has a partnership with Vinnova. order to see its development, digitalisation and new working forms. LFV also has the LFV also runs several important world's first air traffic controller approved for digital remote air traffic management. cooperation projects together with SAAB, In 2016, Swedavia and LFV signed a letter of intent to investigate the conditions Eurocontrol and Innaxis, among others. for remote air traffic management at the Swedavia airports in Kiruna, The SESAR programme SAAB Digital Air Umeå, Östersund, Visby and LFV actively participates in SESAR, Single Traffic Solutions Malmö. In early 2017, LFV’s Board European Sky ATM Research, the major tasked the Director-General with European research programme for air is an important part continuing this work with the aim of traffic management. Several SESAR signing an agreement in the spring. projects have carried out validations and of LFV's strategic The plan is to build a Remote tests, with the results confirming that Tower Centre adjacent to LFV's these innovations can be built on further operational control centre at Arlanda, which in order to develop new concepts and development and would entail several coordination solutions within air traffic management. effects with existing operations, but A large proportion of the research business. also a location closer to Swedavia’s conducted goes on to implementation central management function. The under the SESAR Deployment Manager first airport is planned to be taken into operation in 2018/2019. that controls the sequence and schedule LFV and SAAB previously have a far-reaching cooperation for the development of for Europe's implementation of these new remotely operated air traffic management. This includes SAAB's technical plat- solutions for air traffic management. form used at LFV's control centre in Sundsvall. In order to continue operating and Research areas that are deemed developing the air traffic management service, SAAB and LFV have formed a joint important, but whose solutions are not company, SAAB Digital Air Traffic Solutions AB. The company is an important part sufficiently mature for implementation, of LFV's strategic development of operations and commercial business. are pursued further as part of the SESAR The company's mission is to market, sell, develop and conduct digital remotely 2020 programme. operated air traffic management.

LFV ANNUAL REPORT 2016 21 COOPERATION AND PARTNERSHIPS

If LFV is to deliver smart solutions for the aviation of tomorrow, partner- ships and alliances are strategically important. This will enable LFV to offer customers innovative and competitive products and concepts.

} Alliance } Partnership } Company } Agencies

LFV LFV delivers air navigation services in Sweden at 20 airports and controls aviation in Swedish airspace from its control centres in Stockholm and Malmö. 1,100 employees, turnover in 2016 was COOPANS SEK 3.1 billion. A partnership between the five air navigation service providers in Sweden, Denmark, Ireland, Austria and Croatia for coordinating the EUROCONTROL development of a joint air traffic Eurocontrol is an organisation management system. The work of for aviation safety that has almost COOPANS received an award at the 40 states as members. Eurocontrol industry congress, World ATM, in has no legislative powers but Madrid in 2016. works to harmonise and develop air navigation services in its member countries.

A6 Consists of providers of air SESAR – SINGLE EUROPEAN SKY traffic management services In Europe, the aviation industry in twelve European countries. works together to meet expected The purpose of the alliance is increases in traffic and to develop to pursue the development of technical and operational condi- ELTEL European aviation within the SESAR programme. tions for the airspace. LFV partici- LFV has outsourced its support pates in the EU programme for the technical systems for SESAR, Single European Sky ATM air traffic management to Eltel Research, through COOPANS. Networks. LFV's control centres in Stockholm and Malmö are staffed around the clock with technical watch supervisors.

NUAC LFV's and Danish Naviair’s joint company NUAC handles operations EASA at the control centres in Stockholm, European Aviation Safety Malmö and Copenhagen. NUAC Agency. EASA is continuously runs several strategic projects, with assuming responsibility for more aims including the streamlining of and more of the supervisory systems and working forms. duties previously performed by the European countries’ own aviation safety agencies.

22 LFV ANNUAL REPORT 2016 COOPERATION AND PARTNERSHIPS

THE SWEDISH ARMED FORCES Civil and military air navigation services have been integrated since 1978. Air navigation services are provided for military aviation at both air bases and in other BOREALIS parts of the airspace. The Swedish An alliance of nine northern Armed Forces does not have its European providers of air traffic own air navigation services. management services. The goal for 2021 is to create GAL ANS straight routes within the entire LFV has a partnership with alliance in order to develop GAL (Global Aerospace sustainability from the Logistics) in the United Arab environmental perspective. Emirates, where LFV is a subcontractor providing air traffic management services.

SWEDAVIA State-owned company for operating and developing ten airports from Kiruna in the north to Malmö in the south. LFV delivers air THE SWEDISH navigation services at these TRANSPORT AGENCY airports and has close coop- Produces regulations, issues eration with Swedavia. permits and monitors compli- ance. LFV collaborates with ENTRY POINT NORTH – EPN the Swedish Transport Agency An ATS academy for air traffic on the design of regulations control owned by air traffic manage- and controls for aviation. ment providers in four countries. Its purpose is to coordinate and streamline training programmes, but also to secure development opportunities in the area of training. LFV was involved in starting EPN.

CANSO Civil Air Navigation Services Organisation is a global interest organisation mainly for provid- ers of air navigation services. SAAB DIGITAL AIR Together, CANSO's members TRAFFIC SOLUTIONS AB handle over 85 per cent of the SAAB and LFV have long cooperated world’s air traffic. on the development of remotely operated air traffic management. In 2016, a jointly owned company was formed to develop, market, sell and pursue technology and operational expertise nationally and internationally.

ICAO The International Civil Aviation NAVIAIR Organization is a UN agency tasked Denmark's air navigation service with increasing aviation safety through provider tasked with respon- common regulations in areas including sibility for air traffic control in air navigation services. ICAO also pur- Danish airspace. LFV and Naviair sues issues such as airport design, the have a joint company, NUAC, certification of pilots and controllers and a far-reaching partnership. and the airworthiness of aircraft. Most of the world's countries are members of ICAO.

LFV ANNUAL REPORT 2016 23 EFFICIENT APPROACHES

100Punctuality in 2016 was EFFICIENT APPROACHES over 99.9 per cent.

A focus on the efficient function of all parts of operations and their contribution to LFV’s delivery to customers creates customer benefit and value.

LFV's operational activities in Swedish started a joint project office, the Joint Pro- of the system, with more than 6,400 logged airspace have functioned well in 2016, with gramme Office, JPO. Its aim is to reduce the hours of operations at the end of 2016. high quality and availability. 99.9 per cent cost base and increase efficiency by coordi- In 2016, air traffic management at of en route flights were carried out without nating technical initiatives and processes. Sundsvall Timrå Airport was moved over to any delays caused by the air navigation ser- RTC, and in 2017 Linköping City Airport will vice and thereby comply with EU require- Remote air traffic management be the third airport to be remotely oper- ments on availability. Since 21 April 2015, Örnsköldsvik Airport ated from Sundsvall. In 2016, an in-depth has been remotely operated from the feasibility study commenced regarding the Authorisations in several sectors control centre in Sundsvall. This was the conditions for remotely operated air traffic Training air traffic controllers for author- start of a major change in the industry, and management of the airports in Malmö, isation in several sectors increases LFV leads the development of remotely Visby, Östersund, Umeå and Kiruna. efficiency. Having several authorisations operated traffic management globally. Our In early 2017, LFV’s Board gave the increases flexibility according to the pres- controllers now have extensive experience Director-General a mandate to move ent traffic situation. The control centre in forward in the negotiations with Swedavia, Stockholm has now implemented the new with the ambition of signing an agreement. approach, which facilitates optimal staff- In 2017, Linköping ing of the sectors handled by the control Optimisation of Stockholm’s airspace centre’s air traffic controllers. Correspond- City Airport In Autumn 2016, a project started for a ing work is being done at LFV's control more efficient utilisation of the airspace centre in Malmö. will be the third over Stockholm. The region is undergoing rapid change with extensive new con- Joint programme for airport to be struction and in-migration, which places more efficient processes remotely operated new demands on an efficient use of the air- As part of the NUAC cooperation, LFV and space just as when building new roads and Naviair (LFV’s Danish counterpart) have from Sundsvall. changing routes on the ground to achieve

24 LFV ANNUAL REPORT 2016 With LFV's programme for digitalisation, LFV can develop new smart services and DRONES – COLLABORATION IN THE AIRSPACE

solutions. More and more people are flying drones – unmanned aircraft used for everything from goods transport to photography. The regulations are currently being reviewed in order to guarantee efficient, safe and as good flows as possible. The project sustainable airspaces. aims, among other things, to produce new requirements specifications for the air- LFV's primary role is to deliver aviation safety in Swedish airspace and at Swedish space and a plan for implementation. The airports – every hour, around the clock, every day of the year. This is achieved by work is expected to be completed early in LFV's 800 air traffic controllers at 20 control towers and three control centres sep- the third quarter of 2017. arating aircraft horizontally and vertically. Every year, LFV handles around 700,000 aircraft movements in Swedish airspace. Standardised tower environments It is for reasons of safety that traffic LFV supports Swedavia in its work to har- at an airport is stopped when there are monise and standardise the tower equip- The title indications of drones being in the control ment at Arlanda, Bromma and Landvetter. zone – the area around the airport in which The use of standards makes it easier and Drone Traffic approaches and climb-outs take place. This more efficient to maintain, develop and is also the reason why LFV, which handles replace equipment. Controller drones from an air traffic management and may become a aviation safety perspective, requests that New tower at Ronneby Airport in 2016 every drone operator have permission from LFV provides air navigation services for the reality in 2017. and communication with the tower before Swedish Armed Forces and Swedavia at flying into or out of a control zone. Ronneby Airport. On 5 February 2016, the new control tower was taken into opera- New regulations tion. It is more centrally located than the LFV works to make it possible for as many as possible to utilise airspace in an old one, which increases efficiency when efficient, safe and sustainable manner. For this to become a reality, the regulations infrastructure and other buildings for the for drones must be amended, and this is also in progress, both at the national and two helicopter divisions will be completed international levels. during 2017. LFV does not want to prevent anyone from flying, whether ordinary aeroplanes, helicopters or drones. The goal is to create regulations that make it possible for Programme for digitalisation everyone flying to utilise our airspace in a safe and efficient manner. LFV also With LFV's programme for digitalisation, provides the drone map service to facilitate the planning of drone flight. LFV makes LFV can develop new smart services and flying possible, but always puts safety first. solutions. Coordinating administrative IT development with the development Drone Traffic Controller of the operational systems increases the Yes, this title may become a reality in 2017. When business magazineVeckans efficiency and benefit of digitalisation. The Affärer, listed the hottest job titles in 2017, Drone Traffic Controller was in the operations manual for air traffic controllers top ten. Just as an air traffic controller creates order in air traffic, a Drone Traffic will commence digitalisation in 2017. Controller is to keep track of drone traffic.

LFV ANNUAL REPORT 2016 25 EMPLOYEES

THE CUSTOMER'S NEEDS ARE A COMPASS IN DAY-TO-DAY OPERATIONS

LFV's new brand platform builds on insights into customer needs and is intended to serve as a compass in the day-to-day operations of employees. The characteristics of being solution- oriented, committed and innovative all contribute to a successful change process.

Customer focus and commitment build All controllers undergo various recurrent launched that has a more explicit adapta- a strong brand and a successful business training courses and certifications linked tion to target groups and developed forms in the long term. LFV is to be an attrac- to certificates and area of responsibility. for dialogue and communication. The staff tive employer and a flexible and reliable LFV has in-house training to some extent, magazine has been modernised and its partner that helps customers to develop but also purchases training from the ATS editorial content developed. Every work- their business. academy Entry Point North, a training place holds several workplace meetings company owned by the air traffic manage- during the year. Chats with management Corporate culture and values ment providers of four countries. have been introduced on the intranet with The work to implement LFV's new brand LFV also offers employees many comment functions. Group management platform – LFV's Navigator – was com- opportunities to develop, either in their also meets employees around LFV's oper- menced during the year. The Navigator own role or by trying new duties. Develop- ations. Digitalisation, remote air traffic builds on insights into customer needs and ment, innovation and research are often management, LFV’s Navigator, corporate how they want LFV to function as a sup- conducted in the form of projects involving culture and values have been in focus plier and partner. The Navigator becomes many employees in both project groups during the year. a compass in day-to-day operations for and reference groups. Group management meets trade union decisions and investments but also for representatives in forums for group-wide behaviour and values. New values have Leadership and values issues. There are also corresponding been produced that make a clearer link LFV's leaders are important ambassa- forums at the local level. to customer needs and LFV’s overarching dors for the change process, and clear purpose – smart solutions for the aviation leadership is decisive for driving change Employee survey of tomorrow. LFV’s values reflect how LFV and development. During the year, a This year's employee survey yielded a wants to be perceived by all our stake- new programme has been developed to generally positive response. The response holders: LFV is to be solution-oriented, strengthen the role of leadership in the rate has increased from 77 to 84 per cent. committed and innovative. change process. By clarifying expectations The changes between the last two years' LFV's corporate culture has a key role in and mandates, and offering concrete surveys are quite small, although there the change process that LFV and the entire tools for feedback and development, it is are large variations between different industry for air traffic management are in intended that leadership will be developed units. LFV is undergoing a major change, the midst of. and strengthened. Group management and increasing clarity about why LFV also invites all leaders to a strategy and must change and develop is important for Recruitment, training and development development forum a couple of times creating security in the uncertainty that LFV strives to recruit employees with dif- every year. New leader profiles have been characterises industries in change and ferent backgrounds, skills and experiences. produced on the basis of LFV's Navigator deregulation. The satisfied employee index The profession of air traffic controller and will be introduced during 2017. is at 85, the same as the year before. The is subject to a comprehensive regulatory leadership also has good ratings and is at framework and special training courses Dialogue and participation 72 (72). The commitment index is a little with approved tests and security checks. During the year, a new intranet was lower and is at 71 (73). The vast majority

26 LFV ANNUAL REPORT 2016 EMPLOYEES

SATISFIED EMPLOYEE INDEX

100 85 85 85 Goal 85 80

60

40

20

0 2014 2015 2016

LEADERSHIP INDEX 80 69 72 72 Goal 72 70 60 50 40 30 20 10 0 2014 2015 2016

COMMITMENT INDEX

80 72 73 71 Goal 75 70 60 50 40 30 20 10 0 2014 2015 2016

LFV ANNUAL REPORT 2016 27 EMPLOYEES

are satisfied with the support and feedback of moving air traffic management services NUMBER OF FULL-TIME EQUIVALENT from their immediate manager, but there is from traditional towers to a control centre EMPLOYEES (983), OF WHICH, %: a need for group management to be more in Stockholm. Several visits have been visible out in operations and available for made at each place and it is important Other Operational staff, 46 air traffic questions and dialogue. work that will continue in 2017. controllers, 54 Work environment and health Target contracts During the year, several managers have Many of LFV's employees today have participated in training in labour law and individual target contracts that are used collective agreements. New managers jointly by managers and employees to undergo work environment training to follow up performance and outcomes. gain knowledge and understanding of The employee survey measures how NUMBER OF EMPLOYEES (1,143), important issues about how to achieve a feedback functions, which is important OF WHICH, %: good work environment and about which for enabling an employee to develop and measures and initiatives can and should be take greater responsibility. LFV sees target Men, 56 Women, 44 taken in various situations. All managers contracts as an important tool for steering also receive the employee survey's results and managing its operations. Target con- for their own units. Together with the tracts are applicable for managers employees, they go through their results and qualified administrators. and produce action plans. These are also followed up. HR's employees are available Skills supply to support this work. Skills supply plans are updated on a con- All employees are covered by health tinuous basis, and succession planning has ABSENCE DUE TO ILLNESS (2.7 %), OF WHICH: insurance and health and wellness allow- been implemented for several units. ances. There is also opportunity to receive 50> years, 51 <29 years, 17 help anonymously in difficult situations. Gender equality LFV also has peer supporters who can LFV has submitted its gender equality be contacted if something has happened plan and had it approved by the Equality entailing that an individual employee Ombudsman (DO). LFV’s Board has five needs support. In the first instance, this men and four women, and group man- applies to the operational units. agement has an equal number of men 30-49 years, 32 Work on the psychosocial work environ- and women. Group management consists ment has also been done at the five work- of ten people. Gender equality and equal places in the feasibility study being carried treatment are priority issues for LFV. out by LFV and Swedavia on the possibility

Positive in the survey Less positive: LFV is investing in: + Good opportunities for – Energy and commitment. • further enhancing its leadership, professional development. – Confidence in senior management. • developing information, communication + Cooperation between the groups – Pride has decreased. and dialogue, has increased. – Less satisfaction as regards getting • group management is out more and meets + Knowledge of overarching goals and information from management in time. employees in day-to-day operations, Position 2019 has increased. – There is a need to become better • highlighting best practices more clearly + Feedback from managers has improved. at implementing values and in internal and external channels, + Clarity on where LFV is headed the brand platform. • focusing on corporate culture, values has increased. and brand in group-wide training and in meetings + Access to aviation safety for all employees, information is good. • developing its communication about external factors driving the need for change linked to customers and stakeholders, • developing customer focus and customer insight.

28 LFV ANNUAL REPORT 2016 BOARD OF DIRECTORS’ REPORT

BOARD OF DIRECTORS’ REPORT

LFV’s role is to provide safe, efficient and environmentally adapted air navigation services for civil and military aviation. LFV also has to work to ensure that the transport policy objectives are achieved.

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

• The number of movements in Swedish into an agreement with Swedavia regard- • On 29 June, LFV and Saab announced airspace increased by 2 per cent for a ing a transition to remotely operated air the formation of their joint company total of approximately 726,259. The traffic management at the five airports. SAAB Digital Air Traffic Solutions AB. number of movements was the highest The company’s mission is to market, sell, ever recorded and exceeded the previous • In May there were three technology develop and conduct digital, remotely record year of 2008. events that affected LFV’s delivery to operated air traffic management. The customers. These events have been inves- new company strengthens LFV’s poten- • Profit after financial items amounts to SEK tigated together with our partners and tial to be a leader in the digitisation of 14 million. The low interest rate situation measures have been taken to strengthen air traffic management. has resulted in a continued increase in the the infrastructure’s robustness. Apart pension debt and accounts for a net figure from these events, LFV has continued to • On 18 October, LFV’s first Wide Area of approximately SEK -70 million. maintain a high level of delivery. Multilateration (WAM) system was put into operation. WAM is a surveillance • LFV’s aviation safety objectives have been • On 23 June, a Free Route Airspace was sensor which enables an aircraft’s posi- met and the number of events to which established between the Danish-Swedish tion to be determined through triangula- the air navigation service contributed is airspace and Finland, Estonia and Latvia. tion, which means higher precision and very low. Free Route Airspaces entail economic a long-term reduction of costs compared advantages for airlines and reduced to traditional radar technology. • In March 2016, LFV and Swedavia signed environmental impact. a Letter of Intent concerning an inves- tigation into the conditions for a joint development of air navigation services at the airports in Kiruna, Umeå, Öster- sund, Visby and Malmö based on digital development. In January 2017, the Board authorised the Director-General to enter

LFV ANNUAL REPORT 2016 29 BOARD OF DIRECTORS’ REPORT

GENERAL INFORMATION ABOUT THE ENTERPRISE AND SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

LFV’s role is to provide safe, company LFV Holding AB, its wholly owned control centre in Copenhagen. NUAC efficient and environmentally subsidiaries LFV Aviation Consulting AB rents the operational staffing resources and LFV Norway AS, and the associated required to undertake this role from LFV adapted air navigation services companies Entry Point North AB, the newly and Naviair. LFV and Naviair also make for civil and military aviation. formed SAAB Digital Air Traffic Solutions AB their control centres and other infrastruc- LFV also has to work to ensure and NUAC HB. LFV Aviation Consulting is ture available. During the year, LFV and that the transport policy LFV’s subsidiary for international consult- SAAB have together formed SAAB Digital objectives are achieved. ing services within civil aviation. LFV has Air Traffic Solutions AB, where LFV owns extensive and broad experience of large 41 per cent and SAAB 59 per cent, and Luftfartsverket (LFV) has been instructed and successful projects both within the whose operations started on 1 September to develop its business models for airports areas of air navigation services and airports 2016. Through this company the work owned or controlled by the Swedish State in many parts of the world. LFV Norway is continued with managing, developing with the aim of, for example, achieving AS was established in 2015 to represent a and driving the digitalisation of remotely a distinct range of services and good presence in the Norwegian market, but has operated air traffic management. The com- efficiency. not yet commenced any activities. pany offers total solutions by combining The state-owned enterprise LFV provides Entry Point North AB, of which 25 per LFV’s unique operational expertise within air navigation services in Sweden and cent is owned by LFV – together with the RTS, Remote Tower Services, with SAAB’S around the world. Danish Naviair, Norway’s Avinor and the leading technology and global organisation. In 2016, LFV provided air navigation ser- Irish Aviation Authority – provides air vices at 21 airports spread across Sweden, navigation training, primarily to the owner Certifications at two control centres, in Stockholm and organisations, but also to other custom- LFV is certified by the Swedish Transport Malmö, and one centre for remotely oper- ers. The associated company Entry Point Agency in accordance with the EU regula- ated air traffic management in Sundsvall. North AB group includes the wholly owned tions concerning common requirements During the year, operations at Göteborg City subsidiary Entry Point North Ireland Ltd, for the provision of air navigation services. Airport have been wound up. as well as 51 per cent of the Hungarian LFV is also certified in accordance with In 2016, LFV had a turnover of SEK 3.1 subsidiary Entry Point Central KFT – the the ISO standards 9001 and 14001 for (3.4) billion and the number of full-time remaining 49 per cent is owned by Hungaro quality management and environmental equivalent employees was 983 (1,012). Control Plc, which is in turn owned by the management, respectively. LFV has the The Government’s instructions for LFV Hungarian State. Swedish Transport Agency’s approval to (SFS 2010:184) state that LFV and other NUAC HB is a subcontractor to LFV and train air traffic management staff, design companies over which the state has a direct the Danish air navigation service provider airspaces and carry out flight inspection or indirect decisive influence, together form Naviair. LFV and Naviair each own a 50 per of, for example, navigation aids. a state-owned enterprise group. cent stake. NUAC is responsible for the par- ent companies’ remit to provide en route LFV’s lines of business Composition of the LFV Group air navigation services in Danish-Swedish En route air navigation services The Group consists of the state-owned airspace from the Swedish control centres En route air navigation services is LFV’s enterprise, the wholly owned holding in Stockholm and Malmö and the Danish largest line of business and includes the

30 LFV ANNUAL REPORT 2016 The number of aircraft movements in Swedish airspace increased by 2 per cent in 2016 and amounted to more than 726,000 movements, 726which is the greatest volume of traffic that has been handled in Swedish airspace during a single year. The previous peak year of 2008 was exceeded by 64 movements.

REVENUE PER LINE OF BUSINESS, % Local air navigation services recent years, in connection with procure- Local air navigation services is the air ments, stopped operating at a number of Commercial and Other services, 9 En route, 60 navigation service provided from the airports. On 1 January 2016, LFV ceased R&I, 2 airports’ control tower and independent operations in Borlänge and Gällivare, and Flight in- terminal control centres for civil and mili- this year has seen a winding up of opera- formation services, 4 tary aviation in the airports’ control zones, tions at Göteborg City Airport. This autumn, i.e. the area at and in direct connection to Kristianstad Österlen Airport put its air

Local air the airports, as well as during approach- navigation services out to tender. The con- navigation es and climb-outs. Local air navigation tract was awarded to LFV who continues to services, 25 services also includes remotely operated provide air traffic control at the airport. air traffic management services, Remote Tower Services (RTS), at the control centre Flight information services in Sundsvall. The customers are state, Flight information services includes flight air navigation services provided for civil municipal, private and military airports. information and weather presentation. and military aviation routes (en route), Operations are conducted with exclusive The customers are the airlines and air i.e. outside the airport areas. The prod- right at Swedavia and Swedish Armed carriers operating in Swedish airspace uct is supplied from LFV control centres Forces airports, while the Swedish market and also the Swedish Armed Forces. in Stockholm and Malmö. This employs is otherwise exposed to competition. Operations comprise about 4 per cent of infrastructure owned by LFV in the form of In 2016 local air navigation services LFV’s turnover and are financed by route control centres, radar stations, navigation constituted about 25 per cent of LFV’s turn- charges as well as compensation from aids, operational systems and more. Since over. The operations at Stockholm Arlanda the Swedish Armed Forces relating to the 2012, the operational activities in the are financed by terminal charges which, as military part of the operations. Danish-Swedish airspace block are carried with en route charges, are regulated by the out via the joint company NUAC HB. The EU’s performance plans. For 2016, the goal Research and Innovation customers are the airlines and air carriers of unit costs for terminal services at Stock- LFV conducts research and innovation operating in Swedish airspace and also the holm Arlanda has not been fully achieved. (R&I) within the field of aviation, especially Swedish Armed Forces. At Swedish Armed Forces airports, the within the framework of the European En route air navigation services Swedish Armed Forces finances the costs research programme for air traffic manage- accounts for about 60 per cent of LFV’s incurred by LFV for providing the services. ment, Single European Sky ATM Research turnover in 2016 and is mainly financed At other airports, operations are financed (SESAR). Research and innovation consti- by route charges and to a smaller extent in part by the airports that have entered tute about 2 per cent of LFV’s operations. by compensation from the Swedish agreements regarding the services and also The financial goal is for the costs to be Armed Forces for the services provided through route charges to varying degrees – covered through external financing. LFV’s for military aviation. The route charges are from 0 up to 75 per cent. At the regulated R&I operations are mainly financed by EU regulated through the EU’s performance airports, cost-based pricing is applied. funding, the Swedish Transport Adminis- plans, which impose requirements on The competitive market is characterised tration’s R&I portfolio and Vinnova, and continuous streamlining. by strong price pressure and LFV has in reported revenue from grants amounted

LFV ANNUAL REPORT 2016 31 BOARD OF DIRECTORS’ REPORT

to approximately SEK 58 million in 2016. The system regulates the route and LFV is running a comprehensive change LFV has an important role in the national terminal charges at Stockholm Arlanda. process called Position 2019. LFV is steering group with strategic expertise in Aside from the en route navigation services business like and competitive in all areas the field of aviation. carried out at the control centres and the and drives the market forward with new infrastructure, the route charges finance technology. Linked to this process, we Commercial and Other services flight information services and a significant have created positions and strategy charts Commercial and Other services include part of the local air navigation services for LFV’s five operational areas: en route, the renting out of air traffic controllers provided from the airports’ control tower the Swedish Armed Forces, Swedavia, and other staff resources, flight inspec- and terminal controls. Overall, these the Swedish competitive market and tion, technical maintenance services charges generate around 80 per cent of the international market. An efficiency and other technology-related products, LFV’s turnover. programme is being implemented as a part consulting services and administrative 2016 was the second year of reference of the change programme, with the aim services. Commercial and Other services period 2 in the EU’s system of performance of reducing costs by SEK 350 million over are provided both in Sweden and on the plans. The outcome is preliminary for both the course of the period 2013–2019. The international market. Collectively, these 2015 and 2016, but indicates that the objec- efficiency programme has up until 2016 account for 9 per cent of LFV’s turnover in tives concerning aviation safety and capacity largely adhered to the plan. During the 2016. The services are provided in compet- have been achieved by a reasonable margin. year, LFV has made savings for example itive markets. Profitability varies between After revision of the environmental within the areas of training, management different products and markets. LFV has a objective, which is set on an annual basis, functions and administration. long term goal to increase turnover and it has been shown that LFV achieved the earnings from commercial products. objective in 2015 but not in 2016. The Air traffic and charges The part relating to the international objective is very ambitious, and small The number of aircraft movements in market had sales totalling 40 million in disruptions carry significant impact. The Swedish airspace increased by 2 per cent 2016, with the largest markets being deviation is mainly due to weather and in 2016 and amounted to more than the United Arab Emirates and Norway. military exercises. 726,000 movements, which is the greatest Revenues from the international export In regard to cost efficiency, the objec- volume of traffic that has been handled in business are lower in 2016 compared to tive is achieved for en route, excluding Swedish airspace during a single year. The 2015, primarily due to a reduced level of uncontrollable pension costs. However, previous peak year of 2008 was exceeded new sales and a lower profit share from for terminal services at Stockholm Arlanda by 64 movements. the operations in the United Arab Emirates. Airport, the objective was not achieved International traffic showed the biggest One of LFV’s strategic objectives is how- for 2015 and 2016, mostly due to lower increase with 3.4 per cent, domestic ever to expand its international operations. inflation than what was forecast. A final increased by 1.5 per cent and overflights Markets of interest to us are, for example, assessment will not take place until the Norway, the United Kingdom, Germany end of the reference period, which will be NUMBER OF MOVEMENTS (thousands) and the Middle East. in 2020 at the earliest. For LFV, the objective related to cost effi- 750

Performance plan and ciency is the main challenge. The objective 730 726 efficiency programme that applies to the period 2015–2019 is 712 710 706 705 Within the EU, air navigation service that fixed price costs are to be reduced by 694 689 providers are regulated by comprehensive an average of 2.4 per cent per year. In the 690

regulations. This includes a number of ele- current situation, the assessment is that 670 ments such as certification requirements, the objectives regarding cost efficiency 650 requirements for technical harmonisation will not be met in the remaining years of 2011 2012 2013 2014 2015 2016 and the creation of functional airspace reference period 2, i.e. 2017–2019. blocks crossing national borders. The work with updating the regulatory ROUTE CHARGES (SEK/service unit) An additional part of these regulations framework and establishing objectives for 700 is that the European Commission adopts the coming reference period, starting in 662 664 660 performance plans that set targets for air 2020, has begun. LFV is actively involved in 633 640 navigation service providers in terms of efforts to influence the design of the third 620 609

aviation safety, capacity, the environment reference period, among other things, to 579 580 and cost efficiency. The performance achieve a more developed management plans encompass en route navigation ser- model where objectives are tailored to the 540

vices and terminal services at Stockholm individual circumstances of each state and 500 Arlanda Airport. service provider. 2011 2012 2013 2014 2015 2016

32 LFV ANNUAL REPORT 2016 BOARD OF DIRECTORS’ REPORT

by 0.9 per cent. Overflights represent more and conduct digital, remotely operated are transferred gradually to the new than 40 per cent of the total volume of air traffic management. Active marketing centre starting in 2019. The work is now traffic and consist of traffic that does not efforts have begun. In December, SAAB entering a valuation phase which includes take off or land in Sweden. The largest Digital Air Traffic Solutions AB signed a the signing of contracts, procurements, increase was at the end of the year, pri- Letter of Intent with Scandinavian Moun- in-depth dialogue with the authorities and marily in traffic to and from Arlanda and tains Airport AB regarding the provision of stakeholders and validation of develop- for overflights in northern Sweden. There remotely operated air traffic management. ment initiatives. has also been a shift of Baltic Sea air traffic In April 2015, LFV commissioned further in over Sweden, which has resulted the first remotely operated air traffic The international market in longer distances in Swedish airspace. In management service in the world. Since Since 2013, LFV has been in partnerships the long term, continued growth in traffic then, air traffic at Örnsköldsvik Airport has with GAL (Global Aerospace Logistics), oper- in Swedish airspace is anticipated. been remotely managed from a centre in ating air navigation services at five airports The number of service units – which Sundsvall, and for the period 2015–2016, in the United Arab Emirates. In recent years, is the unit that forms the basis for the LFV has a total of around 6,400 hours of air traffic has increased significantly in the invoicing of route charges and is calcu- operations experience. area. The agreement with GAL has resulted lated as a combination of the number of LFV’s centre in Sundsvall and RTS have in additional tasks in the region that involve flights, aircraft weight and distance flown received much international attention. technology consultancy services and – increased by 1.1 per cent in 2016 thanks In conjunction with the global air traffic procedure and airspace design. During the to more flights, but with shorter distances management exhibition, the World ATM year, there have been discussions about the and/or lighter aircraft. Congress in Madrid, in March 2016, LFV prospects for the continued partnership and On 1 January 2016, Sweden’s route received two industry awards for its extended collaboration. charge was reduced by 4.9 per cent. Just innovative work with developing remotely In Norway, LFV has continued during the under 80 per cent of the charge relates operated towers. The awards were handed year to provide services regarding flight to LFV’s operations. Other air navigation out by Jane’s Airport Review and SESAR inspection. LFV has signed a renewed services actors, government agencies and Single European Sky. contract for flight inspection at Avinor’s Swedish airports account for the remain- Since 15 November 2016, traffic airports. The contract period is five years ing part financed by route charges. LFV’s management at Sundsvall-Timrå Airport is with an option for two additional years. efficiency measures are a prerequisite for also handled from the centre in Sundsvall. LFV has also participated in the pro- and a major contribution to it having been Linköping City Airport has also signed a con- curement of air traffic services at Torp possible to reduce Sweden’s charge for tract regarding remotely operated air traffic Sandefjord Airport, but this contract was three years in a row. For 2017, however, management, with its deployment date won by another provider. The Norwegian the charge will be increased slightly, by planned for the second quarter of 2017. market for air navigation services is about to 0.2 per cent, which relates to settlements The premises in Sundsvall have grown be deregulated. LFV has established a sub- for prior years and not to increasing costs. over the year and there is therefore room sidiary, LFV Norway AS, for the purposes of Sweden’s charge is still high in comparison to expand the services to more airports in monitoring market developments and pro- with its neighbouring countries, which is the future. viding services on the Norwegian market. mainly due to differences in the charging In parallel with the operation, LFV is In competition with international consul- structure. Swedish route charges finance developing what is known as “multiple tancy firms, LFV won the contract to pro- a large proportion of local air navigation mode”, i.e. technology that will allow air duce a master plan for Rwanda’s airspace. services at airports. traffic controllers to manage air traffic at Another example of consulting services several airports in parallel. during the year concerns an assignment in Remotely operated air In March 2016, LFV and Swedavia AB Thailand regarding support in connection traffic management signed a Letter of Intent concerning a with preparations for the deployment of Since 2006, LFV and SAAB have been col- joint investigation into the conditions for the air traffic control system TopSky. laborating on the development of remotely remotely operated air traffic management operated air traffic management, Remote at the airports in Kiruna, Umeå, Östersund, The Swedish Armed Forces Tower Services (RTS). SAAB has supplied Visby and Malmö. The aim is to create con- In Sweden, unlike the rest of the world, the the technical equipment. LFV has devel- ditions for the digital airport of the future civil and military air navigation services are oped the operational methodology and and partly to lower costs for airspace users. entirely integrated and LFV is in charge of air also helped with product development. There is a proposal for LFV to invest in navigation services at all stages of prepar- On 1 September 2016, LFV and SAAB’s joint building a centre for remotely operated air edness for both civil and military aviation. company SAAB Digital Air Traffic Solutions traffic management as well as in technical LFV enjoys a close collaboration with the AB commenced business activity. The com- equipment. Furthermore, the proposal Swedish Armed Forces, which aims to create pany’s mission is to market, sell, develop suggests that the operational activities effective and robust air navigation services

LFV ANNUAL REPORT 2016 33 BOARD OF DIRECTORS’ REPORT

for both civil and military aviation at all number of measures to increase security tentatively been classified as severity A or stages of preparedness. This collaboration over the course of the year. The security B. In 2016, 84 (59) incidents were reported also involves training LFV’s air traffic control- work will be intensified over time in light of on the runway, which is an increase com- lers and training the Swedish Armed Forces’ the changing global situation, but also as a pared with the previous year but the same reserve officers in air navigation services. result of the requirements with resuming level as in 2014. LFV is deemed to have LFV participated in the Swedish Armed overall defence planning. contributed to 11 (9) incidents. Forces leadership exercise in 2016, as one LFV is working actively with information In 2016 there has been 35 (23) separa- of several representatives of the Swedish security and Cyber Security.​​ LFV is charged tion minima infringements. LFV is deemed authorities. The exercise is aimed at with providing safe air navigation services. to have directly contributed to 20 (18). training to lead operations in all emergency This requires that information is always Separation minima infringements refer to situations. Participating agencies included available and accurate. LFV’s work with situations where two aircraft come too the county administrative boards, the preventing information security incidents close to each other. For operations con- Swedish Transport Administration, the builds on the agency having, prior to an ducted within NUAC’s Swedish organisation Swedish Transport Agency, the Swedish incident occurring, managed potential risks – i.e. the control centres in Stockholm and Energy Agency, the Police Authority and that may impact air navigation services. Malmö – the objective for 2016 was for Swedish Customs. the number of events per 100,000 flying The new air traffic control tower in Aviation safety hours in which the air navigation service Ronneby was taken into operation at the LFV’s primary objective for aviation safety was directly involved and for which the beginning of the year. The next major pro- is for LFV to work proactively to continu- severity of the event was judged to be A, B ject is a new tower at the Swedish Defence ously develop flight safety. LFV is not to or C was to be a maximum of 1 for each of Materiel Administration’ test site Vidsel. contribute to any aviation safety related ACC and APP. NUAC fulfils this objective as Tower construction is in full swing and is incident that results in people being the number of incidents per 100,000 flying expected to be completed during 2017. injured or killed. hours amounted to 0.28 and 0.00. Since 2012, LFV has been a civil aviation LFV has achieved the high aviation safety The aviation safety index, which is based authority with specific responsibility for objectives set for 2016 and the reporting on risk classifications of separation minima emergency preparedness and in states of tendency remains high. In 2016, there infringements and runway incursions in heightened preparedness. LFV also has the were 2,220 (1,990) disruption reports relation to the number of movements, role of Duty Officer. registered. During the year, a new and measures LFV’s risk exposure on the basis even more systematic investigation meth- of the severity of the incidents and repeti- Planning for civil defence odology was introduced for aviation safety tion of the event. The goal is for the flight In December 2015 the government issued events in order to be able to analyse the safety index to be below 3, which it has planning guidelines instructing agencies events and the underlying causes in more done throughout the year, and it was 1.2 with special responsibilities prior to and depth. LFV’s focus areas for aviation safety in December 2016. in states of heightened preparedness to work include runway incursions, separation Events that involve foreign military resume planning for preparedness within minima infringements, airspace intrusions, aircraft operating without active tran- the context of civil defence. drones, flying without transponders and sponders within Swedish airspace, and As a provider of air navigation services technical disruptions. therefore not appearing on air traffic for both civilian and military aviation, LFV Through the project Runway Incursion control’s instruments, represent an avia- has an important role in the planning of Prevention Programme, and together tion safety problem. Ever since Roskilde’s the civil defence. During the year, a num- with other air navigation service provid- primary radar signal was integrated with ber of activities have been carried out and ers, airports and airlines over the past the Malmö control centre in the previous started, several of them in collaboration two years, LFV has worked to reduce the year, more aircraft without transponders with other agencies and actors within the number of events and the risks associated are visible. To extend the radar coverage transport sector. LFV’s assessment is that a with runway incursions. The project was further, LFV is investing in a new primary subset of the data presented in the report completed in the spring; the results have radar in southern Sweden. is confidential and should be handled with been submitted to the Swedish Transport The number of unmanned aircraft, respect to this. LFV is therefore choosing to Agency and the work on an implementa- known as UAVs (Unmanned Aerial Vehicles) compile a separate report for the Ministry tion plan is underway. or drones, is increasing, and disruptions of Enterprise and Innovation. With regard to Runway Incursion, LFV’s caused by UAVs that enter controlled objective for 2016 was to ensure that only airspace without permission is a growing LFV’s security work a maximum of seven events with ATM problem. LFV has provided a special map During 2016, the security policy situation grants classified as severity A or B took with the aim of increasing safety and mak- in Sweden has developed in a negative place, of which a maximum of two may be ing it easier for UAV pilots to determine way, which has meant that LFV has taken a A events. During the year, one event has where to fly without disrupting regular air

34 LFV ANNUAL REPORT 2016 BOARD OF DIRECTORS’ REPORT

traffic. A project is underway, RPAS in the per flight, which is better than EU’s target A replacement and modernisation project control zone, which highlights the possi- for Swedish-Danish airspace, which was for a number of LFV’s radar stations have bilities for handling drones in the control 0.10 minutes per flight. begun. The new radar systems will include zone (the area around an airport where For LFV, aviation safety is always of support for “Mode S” for identifying air- approaches and climb-outs take place) primary importance. When LFV cannot craft, which is a legal requirement entering without being forced to close the airport, deliver an entirely safe air navigation into force in 2020. In October LFV’s first as is the case with the regulations applica- service, the capacity of the aviation system WAM system was taken into operation, ble today. New regulations for unmanned is reduced. Three technology events which is a monitoring sensor that enables aircraft are currently being drafted by the occurred during the second quarter 2016 an aircraft’s position to be determined European Aviation Safety Agency (EASA). which affected LFV’s delivery to cus- through triangulation. The technology has Work is being pursued nationally through tomers. They had no effect on aviation a higher accuracy than traditional radar. the Swedish Transport Agency to establish safety as LFV could phase out the traffic a new national regulatory framework in in a controlled manner, but the airspace Environment order to adapt to the coming EU regula- capacity was impacted and therefore our LFV affects the environment directly tions scheduled to be introduced in the customers, airlines, airports and travellers. through its own operations and indirectly coming years. The most comprehensive event occurred through noise and emissions generated The aviation safety culture project on 19 May when LFV could not provide by the aircraft for which LFV provides undertaken in the last two years has been any capacity in Stockholm’s airspace for air navigation services. By managing the completed, and work on the implementa- about two hours. As a consequence of aircraft in an way which is as environmen- tion of the remaining activities has -con this, capacity was affected in large areas tally friendly as possible, LFV contributes tinued within the line organisation. The of Swedish airspace during the rest of the to reducing the environmental impact. LFV project has helped to create conditions traffic day. All the events have been inves- develops airspace, procedures and systems for the continuous development of safety tigated and measures have been taken to support in order to create better condi- culture and resulted in several activities strengthen procedures and processes as tions for reducing emissions from aviation. within different areas aimed at develop- well as infrastructure robustness. The environmental work is conducted ing and improving the already impressive Apart from these events, LFV has been in a structured and systematic manner aviation safety culture that characterises able to maintain a high level of delivery to and is supported by LFV’s environmental LFV. Among other things, basic training has air carriers and airports. Delivery capacity management system. LFV’s objective is been reviewed and a structure for commu- en route shows that almost 100 per cent to provide the conditions for an average nication has been developed. of the flights could be carried out with- annual reduction in carbon dioxide emis- The operations manual contains all out delay. Agreed levels of capacity and sions into the Swedish airspace of 1,000 the instructions for overall operational availability have been delivered to airport tonnes in the period 2014–2019. For 2016 activities. In 2016, the restructuring of customers and the Swedish Armed Forces. the outcome is around 1,638 tonnes. For the operations manual was approved and 2014 and 2015 the corresponding values initiated. Among other things, the aim is, Infrastructure were 1,185 and 500 tonnes. to a greater extent than before, follow the COOPANS (Cooperation between ANS For many years, LFV has assisted airports structure of ICAO Doc 444 (PANS-ATM, providers) is a partnership between with expert support on issues concerning Procedures for Air Navigation Services – Air the five air navigation service providers air navigation services. The work involves Traffic Management), the regulations that in Sweden, Denmark, Ireland, Austria LFV, in collaboration with airports, finding most affect the operations manual, and and Croatia, all of which have the same solutions that create the conditions for to facilitate the management of amend- systems and equipment. Through joint reducing emissions without exposing more ments to governing regulations. The work requirement specifications and common residents to noise levels above guideline is scheduled for completion during the development, effective solutions and high values. In May 2015, an environmental first quarter of 2017. In connection with level of cost efficiency are ensured. Work is judgement concerning Stockholm Arlanda the restructuring, a big step has also been ongoing with further development of the Airport was laid down and the new envi- taken to digitise the operations manual. air traffic control system TopSky, entailing ronmental permit includes requirements improvements in functionality, as well as regarding the reduction of emissions into Capacity and delivery implementation of new EU requirements. the air. LFV has prepared an adaptation Operational activities have functioned The latest system upgrade was launched in to these new environmental conditions well over the course of the year, with 99.9 January 2017. that came into effect on 7 January 2016. per cent of all flights en route in Swedish Aside from investment in a new primary In 2016, LFV has also conducted thorough airspace taking place without any delays radar in southern Sweden, so as to extend environmental analyses of air traffic to and caused by the air navigation service. The the radar coverage further, LFV is making from airports. average delay amounted to 0.05 minutes additional investments in infrastructure. For several years, Swedavia at Stockholm

LFV ANNUAL REPORT 2016 35 BOARD OF DIRECTORS’ REPORT

Arlanda Airport has worked with deploy- involves choosing a mode of transport that different partnerships with other industry ment of a CDM system (Collaborative uses as little fossil fuel as possible. The actors, as well as with universities and re- Decision Making). The overall aim is to use company cars and staff cars that LFV offers search institutes, both nationally and inter- the system to better share information are environmentally friendly vehicles. nationally. The work is based on a number among stakeholders at the airport, for When renting a car, it is routine to choose of strategic development areas with the example, regarding arrival and departure environmentally friendly vehicles when goal of developing new concepts and solu- times. An important feature of the system practically possible. In 2016, about 56 per tions that aim to increase safety, efficiency, is to more accurately coordinate when the cent of the cars LFV hired were eco-cars. capacity, accessibility and sustainability. departing aircraft is to start taxiing so as to On the energy side, great importance In addition to research and innovation, reduce waiting time before starting. LFV is attached to reducing energy con- continuous efforts are also being pursued has participated actively in the implemen- sumption, but also to changing energy to develop and implement new solutions, tation project. The implementation of the sources to renewable energy. In 2016, LFV new technology and new products. CDM system at Arlanda is calculated to used 100% green electricity. By making Over the last few years, LFV has focused have contributed to an annual saving of investments and purchases of goods and on the major European programme Single 522 tonnes of fuel, which corresponds to services with as low an energy consump- European Sky ATM Research (SESAR). LFV

approximately 1,638 tonnes of CO2. tion as possible, energy consumption also cooperates with, among others, KTH On 23 June 2016, a Free Route Airspace is reduced in the long term. In the LFV and Chalmers, and together with Linköping (FRA) was established between the building for training courses at Malmö University and other foreign universities. Danish-Swedish airspace and Finland, Airport, windows have been replaced at In 2016, all projects within SESAR 1 Estonia and Latvia. Free Route Airspaces the end of the year. Calculations show that have been completed. A large proportion entail economic advantages for airlines energy consumption in terms of heating in of the research conducted is sent to the and reduced environmental impact. An the property should decline by 2 per cent deployment manager, which is the pro- important project within the Borealis thanks to the new energy-efficient win- gramme that controls the sequence and Alliance is to establish a common FRA in dows. Furthermore, ongoing adjustments schedule for Europe’s implementation of members’ airspace. At present there is to the heating and ventilation systems these technical solutions. The subsequent some kind of FRA established in seven of and replacement of lighting contribute to development programme, SESAR 2020, has the nine airspaces, but work is ongoing to reduced energy consumption. As a result begun, in which both LFV and COOPANS expand the FRA. of these measures, the year’s energy will participate. LFV has also contributed in other savings in LFV’s own properties amounted Great focus is on research that supports important environmental activities in 2016, to just over 2.6 per cent. LFV’s objective is new technology within remotely operated such as environmental analysis of flight to decrease energy use by 2 per cent per air traffic management, digitalisation and operations at an airport, the introduction year in the period 2012–2019. increased robustness in infrastructure. of a fuel module in LFV’s environmental LFV is subject to the Act on Energy LFV conducts projects within areas such monitoring tool, assisting airport compa- Audits, and work has commenced in 2016 as automation and remotely operated nies with route expertise in environmental in this respect. The first step of the audit is solutions as well as SWIM (System Wide permit processes and training in fuel man- completed through a description of energy Information Management), where LFV is a agement, green air traffic management, for use broken down by operations, buildings world leader. air traffic controllers. and transports. This first step then provides DRIWS (Digital runway incursion warning The direct impact from LFV’s operations the basis for prioritisation and planning of system) is a project concerning digital con- mainly comprises consumption of energy continued auditing in 2017 and onwards. trol and surveillance, “geofencing”, of vehi- for operation and heating of LFV’s premises The measures implemented to reduce cles at an airport instead of the light signals and the energy consumption from running emissions from LFV’s own operations are currently being used to prevent runway the operational systems used by LFV for air not sufficient to achieve climate neutral- incursions. The project has been com- traffic management, in addition to emis- ity. LFV therefore buys certificates from pleted and a feasibility study has begun sions from business-related travel. There projects aimed at emission reductions regarding use of the results at an airport. is also minor impact from waste and use in developing countries and which also Furthermore, feasibility studies are under- of chemicals. The majority of chemical use contribute to social and economic devel- way concerning the ability to remotely occurs in the offset part of LFV’s printing opment. Certificates are purchased in control more functions at an airport such house, which has been phased out in 2016. amounts equivalent to emissions gener- as check-in, baggage handling, etc. The goal is to actively reduce emissions ated by LFV’s activities. In order to work to ensure optimal at the various levels within LFV. In the staffing planning, which is important for case of business-related travel, it involves Research and innovation the efficiency of air navigation services, the reducing the amount of trips by replacing Research and innovation takes place in- project KODIC, Competence capacity and physical meetings with virtual ones. It also house, but also within the scope of several optimisation of digital flight control centre,

36 LFV ANNUAL REPORT 2016 BOARD OF DIRECTORS’ REPORT

is being conducted and is based on mathe- that applies to the central government interest rates, the performance plan’s matical models to optimise traffic flow. administration, LFV has previously signed requirements for continued cost reduc- a local agreement to manage these funds tions and exposure to competition on the Employees (Security Funds). Both of these aim to sup- Swedish tower market. In addition, LFV The number of full-time equivalent port employee development and promote a is now incurring additional costs relating employees has decreased compared to longer work life. In the autumn, there to, for example, aviation safety measures, last year and amounts to 983 (1,012). The has been local negotiations on wages strengthening of infrastructure robustness number of employees has decreased in and terms of employment based on the and measures to increase capacity in order recent years, and at year-end the figure conditions of the central agreement, which to respond to traffic growth in some air- was 1,143 (1,166). A small part of the has been concluded between the Swedish space sectors and during certain periods. decline is explained by operational staff Agency for Government Employers and The assessment of the current situation who have left through a merger or acquisi- the unions at this level. Negotiations will is that there is a risk for that the objectives tion due to operational assignments in two continue in 2017. in the performance plan for cost develop- towers having been switched to another During the year, LFV has introduced a ment will not fully be achievable for operator from 1 January 2016. In addition, new and integrated methodology for car- 2017–2019. The assessment is that it will the decrease is a result of the reorganisa- rying out risk analyses in connection with be more difficult than earlier anticipated tion and efficiency work having continued organisational changes that affect aviation to implement streamlining measures and the number of new and replacement safety and work environment. Remotely within operational activities. LFV intends recruitments in the event of retirement operated air traffic management involves to continue to actively participate in or people leaving having declined. Total some new approaches, but may also mean efforts to influence the design of the third absence due to illness for 2016 amounted moving to another location. To address reference period. to 2.71 per cent (3.06). LFV is continually and structure the related questions and LFV’s greatest risks are deemed to be engaged in preventive work and imple- comments, LFV has conducted local risk that LFV will fail to complete the change ments various measures and activities analyses in the spring that have encom- programme and that the efficiency require- to minimise absence due to illness. The passed both aviation safety, psychosocial ments in the third reference period will be percentage of total sick leave relating to work and relocation. These were followed set at too high a level and without regard to continuous absence of 60 days or more has up in the autumn and represent a further individual circumstances. The future devel- decreased compared to last year. contribution to the continuing work. opment of LFV’s business is also heavily In 2016, the central state parties signed LFV’s annual employee survey was dependent on developments in air traffic a new pension agreement (PA 16) for conducted during the autumn. After the volumes and the international market. all employees in the state. This means results were compiled, Group manage- changes for those born in 1988 or later ment established an action plan within in the form of a transition from a defined eight different areas where the focus will benefit to a defined contribution pension be on measures and activities. Examples scheme. Retirement age is also affected include increased clarity in relation to with the option for the employee to decisions and strategies, continued work choose to retire between 61–67 years of on the brand platform and values,and ​​ age instead of at a fixed age. The agree- efforts towards developing cooperation ment also means that the non-protected at all levels. pension rights for air traffic controllers To develop leadership within LFV, a from the age of 60 has ceased for people revised leader profile has been developed born in 1988 or later. For people born where the focus is on behaviour, clearer before 1988, the same pension benefits expectations, motivation and commitment essentially apply as in the previously appli- so as to drive change forward and actively cable agreement (PA03) with a defined contribute to the business objectives. benefit pension scheme. The leader profile will be implemented In the spring, an agreement was signed throughout the organisation in 2017. on what should apply for those working within the operations and who are subject Expected future developments and to a permanent loss of entitlement due significant risks and uncertainty factors to medical or capacity reasons. From LFV will continue to pursue the change 1 October 2016, funds are being reserved process within the framework of Position in a reorganisation fund for this purpose. 2019. LFV is working to meet the chal- With support from the agreement lenges that have arisen in part as a result concerning local reorganisation funds of external factors such as inflation and

LFV ANNUAL REPORT 2016 37 VIGNETTE

FINANCIAL REPORTS

38 LFV ANNUAL REPORT 2016 COMMENTS ON THE INCOME STATEMENTVIGNETTE

COMMENTS ON THE INCOME STATEMENT Unless otherwise stated, all amounts are reported in SEK (millions). Information in brackets concerns the previous year.

Profit for the LFV Group (LFV) after finan- pension cost increase that affect the route support/staff leasing. The revenue level for cial items amounts to SEK 14 million (39), charges were approximately SEK 200 these is unchanged compared to 2017. a decrease of SEK 25 million compared to million higher in 2015 than in 2016, hence During the year, LFV received EU 2015. The year’s profit after tax equiva- a reduction in turnover between years. grants (INEA Call 2014 and 2015) relating lent amounts to SEK 9 million (30). The LFV’s revenue for en route air naviga- to the financing of development activities, earnings trend both in 2015 and 2016 has tion services is based on the number of primarily within RTS (remotely operated been strongly influenced by the historically service units, which have increased by air traffic management), the Borealis low interest rates which affected both years 1.1 per cent compared to 2015 and impact cooperation and COOPANS. Grants for negatively through increased pension costs LFV’s revenue positively. On 1 January research and innovation are also obtained and diminished opportunities for a return on 2016, however, the Swedish route charge from the Swedish Transport Administra- LFV’s cash and cash equivalents. was reduced by 4.9 per cent, partly due to tion to develop and improve the efficiency the ongoing streamlining. The low infla- of air navigation services. Operating revenue tion also impacts the indexation of route Operating revenue amounts to SEK 3,149 charges negatively. Operating expenses million (3,364), a decrease of SEK 215 Charges for local air navigation services Operating expenses amount to SEK 2,911 million. The air traffic-related aviation at state-owned, military, municipal and million (2,868). An increase in costs FINANCIAL REPORTS revenue has decreased by SEK 263 million private airports remain at the same level as mainly due to price and wage increases. to SEK 2,202 million (2,465), of which the previous year. Staff costs increased by SEK 58 million around SEK 200 million is due to effects Other operating revenue amounted to to SEK 1,567 million (1,509), which related to the financing of costs exempted SEK 947 million (899). This includes com- is largely due to the fact that last year from risk sharing (uncontrollable costs) pensation from the associated company included significant one-time cost decreases within the system of charges for en route NUAC in the amount of SEK 714 million. relating to the release of previously air navigation services. These charges An equivalent amount can also be found reserved reorganisation costs. The year’s are set by the European Commission for under “Various external costs” as LFV normal wage rate increases are largely the multi annual reference periods. The purchases air traffic management from offset by a decrease in the volume of staff current reference period (RP2) relates to NUAC, at the same time as it receives pay- by approximately 30 FTEs compared to the period 2015–2019. Deviations from ments for staff and services rendered. The the previous year. the set charges are only permitted in revenue has increased compared to 2015 One factor that also had an impact on some specific cases. One deviation that is due to higher staff costs. costs in 2016 is the discounting rate that the permitted is uncontrollable changes with Revenues from international operations National Government Employee Pensions respect to pension costs. Pension costs for are dominated by the assignments in Board (SPV) annually sets in November both 2015 and 2016 have risen sharply due the United Arab Emirates and Norway. and which is applied when calculating the to interest rate changes in the calculation Revenues have declined compared to the present value of accrued pension rights and basis that affect state-owned enterprises’ previous year mainly due to a decrease in state-owned enterprises’ pension liability. In pension liability. However, the parts of the the number of new assignments and lower 2016, SPV decided to lower the interest rate earnings from LFV’s operations in Abu floor determined in November 2015 from Dhabi resulting from uncertainty in the 0.0 per cent to -0.3 per cent. A reduction of PROFIT/LOSS AFTER FINANCIAL ITEMS forecast and thus a cautious assessment 0.3 percentage points means a cost increase of the year’s profit share. The subsidiary for LFV of nearly SEK 350 million, most of 100 95 LFV Aviation Consulting AB reports which for accounting purposes is classified 82 80 overdue receivables attributable to this as a financial cost. About 80 per cent of

60 assignment, and billing and credit periods the additional cost is financed through the are relatively long. system of charges, but where the remaining 39 40 Domestic commercial assignments con- approximately SEK -70 million directly 20 sist primarily of various airport contracts affects earnings. 14 9 (flight inspection, obstacle analysis, proce- Miscellaneous external costs amount 0 2012 2013 2014 2015 2016 dure design etc.) and general consultancy to SEK 1,195 million (1,155). The cost

LFV ANNUAL REPORT 2016 39 VIGNETTEINCOME STATEMENT

INCOME STATEMENT

SEK (millions) NOTE GROUP STATE-OWNED ENTERPRISE 2016 2015 2016 2015 OPERATING REVENUE Aviation revenue 1 2,202 2,465 2,202 2,465 Other operating revenue 2 947 899 932 874 TOTAL OPERATING REVENUE 3,149 3,364 3,134 3,339

OPERATING EXPENSES Staff costs 3 -1,567 -1,509 -1,563 -1,501 Miscellaneous external costs 4 -1,195 -1,155 -1,188 -1,151 Depreciation and write-downs of tangible and intangible fixed assets 5 -148 -204 -148 -204 TOTAL OPERATING EXPENSES -2,911 -2,868 -2,899 -2,856

Income from holdings in associated companies 6 0 2 – – OPERATING PROFIT 238 498 235 484

INCOME FROM FINANCIAL INVESTMENTS Dividends from subsidiaries – – – – Interest income 7 7 10 7 9 Interest expenses and similar items 8 -231 -468 -231 -468 TOTAL FINANCIAL ITEMS -224 -459 -224 -459

Profit/loss after financial items 14 39 10 25 Tax/tax equivalent on profit for the year 9 -4 -9 -3 -7

PROFIT/LOSS FOR THE YEAR 9 30 7 18

increase is derived entirely from increased Financial items LFV Holding AB costs for operations conducted through The sum of financial items amounted to The holding unit’s turnover amounts to NUAC, which is largely offset by a corre- SEK -224 million (-459). The dominant SEK 40 million (57) and the profit after sponding revenue increase. Otherwise, the item in net financial income consists of financial items is SEK 3 million (14). The costs are unchanged from the previous year the interest portion of the year’s change in turnover and profit mainly derive from the and relate mainly to the costs of operation, pension liability. Net changes in interest rate subsidiary LFV Aviation Consulting AB. maintenance and technical support of oper- and the calculation basis entail, however, Annual accounts for financial year 2016 for ational systems for air traffic management that the financial cost is SEK 235 million the LFV Holding AB and its subsidiaries and administrative support. lower in 2016 compared to 2015. and associated companies have not yet been Depreciation is significantly lower than As a result of the interest rate situation, adopted at the respective annual general in 2015 and amounts to SEK 148 million the interest income on LFV’s cash and cash meetings. (204). In 2015, cancellations, write-downs equivalents was very low in the last two and extra depreciation were made with a years. The interest income amounted to total value of SEK 56 million, which corre- SEK 7 million (10) in 2016. sponds to the cost reduction.

40 LFV ANNUAL REPORT 2016 COMMENTS ON THE BALANCE SHEET AND FUNDS STATEMENTSVIGNETTE

COMMENTS ON THE BALANCE SHEET AND FUNDS STATEMENTS Unless otherwise stated, all amounts are reported in SEK (millions). Information in brackets concerns the previous year.

Fixed assets and investments up to 2 per cent from the forecast in the sion provisions, including special payroll tax, LFV’s investments in 2016 amounted to performance plan. Between 2 and 10 per amount to SEK 5,803 million (5,192) as at 31 a total of SEK 161 million (108), of which cent, the provider carries 30 per cent of the December 2016, which is an increase of SEK tangible fixed assets accounted for SEK risk. In addition, there are exceptions made 611 million compared with 31 December 136 million and the acquisition of shares for uncontrollable cost increases. In the 2015. This is change consists of indexation in associated companies accounted for case of Sweden, changes to pension costs and interest of net SEK -45 million (-4), pen- SEK 25 million (0). fall into this category. LFV has allocated sion payments SEK -78 million (-69), accrued The year’s largest investment project previous years’ and this year’s recyclable pension benefits for the year SEK 391 million was the ongoing development and adapta- deficit to periods, which is reported next (349), reversed ÅPF liability resulting from tion of the air traffic management system to the items Other long-term receivables transfer of operations SEK 0 million (2) and within the COOPANS cooperation, SEK and Other non-interest-bearing long-term the effect of changes to the calculation basis 20 million. Other major projects during the liabilities. The long-term receivables have SEK 343 million (584). year have been the expansion of the centre increased this year from SEK 825 million for remotely operated air traffic management to SEK 937 million. Of this change, SEK Tax and dividend in Sundsvall, SEK 16 million, and technical 176 million relates to the allocation of risk Tax equivalent for the year amounts to SEK 4 installations to implement remote operation between LFV and the airlines in line with million (9), SEK 1 million (2) of which con- from Sundsvall. the national performance plan for 2016 and cerns tax in subsidiaries. The tax equivalent is During the year, shares were acquired in SEK -64 million relates to a reduction in calculated in accordance with the Govern- the newly formed company SAAB Digital previous years’ receivables. The long-term ment guidelines. LFV will issue a dividend Air Traffic Solutions AB in the amount of other non-interest-bearing liabilities have for financial year 2016 equivalent to 15 per SEK 25 million. decreased this year from SEK 444 million cent of income after tax equivalent. For 2016, the budget for investments in to SEK 273 million. Of this change, SEK tangible fixed assets amounted to a total -25 million relates to the allocation of risk Return on equity and solidity of SEK 200 million. The year’s result was between LFV and the airlines in line with The Government’s financial targets for LFV more than SEK 60 million lower than the national performance plan for 2016 and are that the return on equity after tax equiv- planned, due primarily to delays in planned SEK -149 million relates to a reduction in alent over a business cycle amounts to 4 per new investments and upgrades in radar previous years’ liabilities. cent and that the equity/assets ratio equates systems, as the procurement process became to 15 per cent in the long term. The return on very extensive and thus delayed. The Cash and cash equivalents equity on 31 December 2016 was 1 per cent planned expansions for remotely operated The liquidity of the LFV group remains good. (4) and the equity/assets ratio was 11 per air traffic management have gone somewhat Cash and cash equivalents amount to SEK cent (12). The fact that the return on equity slower than planned. 4,890 million (4,348), an increase of SEK in 2016 does not reach the target is due to During the year, oversight and inventory 542 million from the end of the previous the effects of lower interest rate levels in the of fixed assets has resulted in the reclassi- year. Of cash and cash equivalents, SEK basis for calculating the pension liability. fication of previous years’ investments in 100 million (700) was invested in short-term operating systems, from tangible to intangi- commercial paper and SEK 62 million (0) Funds statement ble fixed assets, as well as cancellations of was invested in short-term bonds maturing Cash flow for the year is positive and approximately SEK 7 million. in 2017. amounts to SEK 542 million. The cash flow from continuing operations amounts to SEK Long-term receivables and liabilities Pension provisions +813 million (+888). The cash flow from LFV’s revenue attributable to en route In November 2016, the National Government investment activities is positive for 2016 operations adheres to a charging model Employee Pensions Board (SPV) decided on as a result of long-term investments being within the EU that involves risk being a new calculation basis for pension provisions divested during the year. The change in allocated between air navigation service for state-owned enterprises’ commitments receivables and other non-interest-bearing providers and airlines. concerning pension provisions as of 1 Janu- liabilities attributable to the charging model The conditions are set out in a perfor- ary 2016. The gross rate was set at -0.3 per for route charges has resulted in a net impact mance plan for a given reference period. cent (0.0) and, following deductions for yield on cash flow for the year of approximately The allocation of risk is applied with respect tax of 0.1 per cent (0.1) and overheads of 0.2 SEK -272 million (-360). The change that to deviations relative to a designated traffic per cent (0.2), the net rate amounts to -0.6 per is reported under financing activities also forecast, with the provider being respon- cent (-0.3). LFV applies 2017’s calculation includes the portion classified as current in sible for the entire risk for deviations of basis in the annual accounts for 2016. Pen- the balance sheet.

LFV ANNUAL REPORT 2016 41 VIGNETTEBALANCE SHEET

BALANCE SHEET

SEK (millions) NOTE GROUP STATE-OWNED ENTERPRISE ASSETS 31/12/2016 31/12/2015 31/12/2016 31/12/2015 FIXED ASSETS Intangible fixed assets Programme rights and other intangible fixed assets 10 284 33 284 33 Total intangible fixed assets 284 33 284 33

Tangible fixed assets Buildings 11 170 180 170 180 Electrical installations 11 18 21 18 21 Telecommunications equipment 11 400 598 400 598 Vehicles 11 10 15 10 15 Leased fixed assets 11 4 3 4 3 Fixed assets under construction 11 192 238 192 238 Total tangible fixed assets 793 1,055 793 1,055

Financial fixed assets Holdings in subsidiaries 12 – – 75 75 Holdings in associated companies 13 38 13 – – Other long-term securities 16 – 164 – 164 Other long-term receivables 14 937 825 934 822 Total financial fixed assets 975 1,003 1,009 1,062

TOTAL FIXED ASSETS 2,052 2,090 2,087 2,149

CURRENT ASSETS Stock 0 1 0 1

Current receivables Accounts receivable 83 87 59 63 Receivables from subsidiaries – – 4 6 Receivables from associated companies 128 145 128 145 Tax receivables 2 – – – Other receivables 252 177 251 175 Prepaid costs and accrued revenue 15 214 202 199 183 Total current receivables 680 611 641 572

Short-term investments 16 162 700 162 700 Cash and bank balances 4,728 3,648 4,681 3,576 TOTAL CURRENT ASSETS 5,570 4,959 5,485 4,849

TOTAL ASSETS 7,623 7,049 7,571 6,998

42 LFV ANNUAL REPORT 2016 BALANCEVIGNETTE SHEET

BALANCE SHEET Continued

SEK (millions) NOTE GROUP STATE-OWNED ENTERPRISE EQUITY AND LIABILITIES 31/12/2016 31/12/2015 31/12/2016 31/12/2015 EQUITY Restricted equity 17 Government equity 202 202 202 202 Restricted reserves 272 272 252 252 TOTAL RESTRICTED CAPITAL 474 474 454 454

Unrestricted equity 17 Profit/loss brought forward 369 344 342 328 Profit/loss for the year 9 30 7 18 Total unrestricted equity 379 373 349 346 TOTAL EQUITY 852 847 803 800

PROVISIONS Interest-bearing provisions Pension provisions 18 5,803 5,192 5,803 5,192 Non-interest-bearing provisions Other provisions 19 46 67 46 67 TOTAL PROVISIONS 5,849 5,260 5,848 5,259

LONG-TERM LIABILITIES Interest-bearing liabilities Liabilities to leasing companies 20 4 4 4 4 Non-interest-bearing liabilities Other non-interest-bearing liabilities 21 273 444 273 444 TOTAL LONG-TERM LIABILITIES 278 448 278 448

CURRENT LIABILITIES Non-interest-bearing liabilities Accounts payable 81 71 80 70 Liabilities with subsidiaries – – 0 1 Liabilities with associated companies 136 135 136 135 Tax liabilities 11 10 11 8 Other non-interest-bearing liabilities 257 130 257 130 Accrued costs and deferred revenue 22 160 149 159 147 TOTAL CURRENT LIABILITIES 644 494 643 490 TOTAL EQUITY AND LIABILITIES 7,623 7,049 7,571 6,998

MEMORANDUM ITEMS Contingent liabilities 23 2 2 17 17 Pledged collateral None None None None

LFV ANNUAL REPORT 2016 43 VIGNETTEFUNDS STATEMENT

FUNDS STATEMENT

SEK (millions) GROUP STATE-OWNED ENTERPRISE Jan–Dec 2016 Jan–Dec 2015 Jan–Dec 2016 Jan–Dec 2015 Operations Profit/loss after financial items 14 39 10 25 Adjustments for items not included in the cash flow etc. 737 988 737 989 751 1,027 747 1,014 Tax equivalent -5 -9 – -7 Cash flow from continuing operations before changes to working capital 746 1,018 747 1,007

Cash flow from changes to working capital Change in stock 1 0 1 0 Change in current receivables 5 -82 3 -58 Change in current liabilities 61 -48 62 -49 Cash flow from changes to working capital 813 888 813 900

Investment activities Change in intangible and tangible fixed assets -139 -108 -139 -108 Change in financial assets 164 -13 164 -11 Change in group and associated companies -25 -1 – – Cash flow from investment activities 1 -122 25 -119

Financing activities Change in long-term receivables -184 -268 -184 -268 Change in long-term liabilities -87 -92 -87 -92 Cash flow from financing activities -271 -360 -271 -360

CASH FLOW FOR THE YEAR 542 406 567 420 Cash and cash equivalents brought forward 4,348 3,942 4,275 3,855 Cash and cash equivalents carried forward 4,890 4,348 4,843 4,275

44 LFV ANNUAL REPORT 2016 ACCOUNTING AND VALUATION PRINCIPLESVIGNETTE

ACCOUNTING AND VALUATION PRINCIPLES

Accounting principles Subsidiaries LFV’s research and innovation activities, LFV’s accounts for the state-owned Companies in which LFV directly or indi- which are mainly financed by EU grants enterprise and the group comply with the rectly holds more than half of the votes for and appropriations from the Swedish Ordinance (2000:605) concerning Annual all shares or otherwise exercises a decisive Transport Administration and Vinnova, Reports and Budget Documentation, the influence are classified as subsidiaries turned over approximately SEK 70 million Swedish National Financial Management and are consolidated in the consolidated last year. Turnover in the international Authority’s regulations and general advice accounts. The consolidated accounts are market amounted to SEK 57 million. and the requirement for generally accepted drawn up in accordance with the acquisition Approximately 80 per cent of the interna- accounting principles as per the Bookkeep- method. The acquisition date is the date on tional turnover originates in Abu Dhabi ing Ordinance (2000:606). To the extent which the decisive influence was obtained. and Norway. that there is no benchmark directly aimed Subsidiaries in other countries draw up at state-owned enterprises, LFV applies, their annual accounts in foreign currency. At Revenue recognition in the way reported in each of the sections the time of consolidation, the items in these The revenues are recognised to the extent below, the valuation rules set out in the subsidiaries’ balance sheets and income state- it is probable that future economic benefits Swedish Accounting Standards Board’s ments are recalculated using the exchange will fall to the Group and these benefits can General Guidelines BFNAR 2012:1 Annual rate on the accounting date or the spot rate on be calculated in a reliable manner. In the Accounts and Consolidated Accounts (K3). the day each business transaction took place. consolidated accounts, internal group sales LFV’s subsidiaries draw up annual The exchange rate differences that arise are eliminated. The principles applied are reports in accordance with the Swedish are reported in accumulated exchange rate essentially consistent with BFNAR 2012:1 Annual Accounts Act and BFNAR 2012:1 differences in the group’s equity. (K3), Chapter 23 Revenue, which the Annual Accounts and Consolidated subsidiaries apply to revenue recognition. Accounts (K3). Associated companies Revenue is reported at the real value of The accounting principles are unchanged Companies in which the state-owned what has been received or will be received, compared with the previous year. enterprise or LFV Holding AB can exercise net of discounts given. significant influence as a result of holding Grants are recognised as revenue from Format and supplementary information between 20 per cent and 50 per cent of the grants upon receipt if the purpose of the Income statements, balance sheets and votes are reported as associated compa- grant is for it to be used at LFV. Unused funds statements have been formatted in nies. Associated companies are reported in grants are allocated to cover future costs. accordance with the rules that apply to accordance with the equity method in the Interest and dividends are reported as rev- state-owned enterprises and state-owned group accounts. enue when it is probable that the Group will enterprise groups. be receiving the economic benefits associated Reporting for lines of business with the transaction and that the income can Consolidated accounts and geographical markets be calculated in a reliable manner. LFV draws up consolidated accounts. The LFV has operations in five different opera- consolidated accounts include the state- tional areas: en route, the Swedish Armed Valuation of work in progress owned enterprise and the group companies Forces, Swedavia, the Swedish competitive For work with a fixed price, the income and in which the state-owned enterprise directly market and the international market. LFV expenditure attributable to work in progress or indirectly holds more than half of all has the sole right to the majority of these is reported as revenue or costs relative to the votes for all of the shares or otherwise operations – en route, the Swedish Armed its degree of completion on the accounting exercises a decisive influence (subsidiaries), Forces and Swedavia. Operations are date (percentage-of-completion method) as well as the other companies (associated finances primarily through the EU-regulated The percentage of completion is determined companies) in which the state-owned enter- route and terminal charges and through by comparing the employed expenditure on prise has a significant influence as a result contracts with the Swedish Armed Forces. the accounting date with the estimated total of shareholdings. Outstanding accounts In 2016, these revenues equated to about expenditure. In cases where the outcome between group companies are eliminated in 90 per cent of the total turnover of LFV, of a work in progress cannot be calcu- their entirety. excluding internal group dealings between lated with reasonable certainty, revenue is The principles used for the group’s the state-owned enterprise and NUAC HB. reported only to the extent equivalent to the reporting of deferred tax are described The services provided mainly constitute air expenditure incurred on the work in pro- under the heading Taxes and tax equivalent. traffic management services. gress that will probably be reimbursed by

LFV ANNUAL REPORT 2016 45 ACCOUNTING AND VALUATION PRINCIPLES

the purchaser. Known or anticipated losses licenses and other software whose useful Stock are expensed immediately. life is greater than three years, as well as Stock is valued according to the principle of For a work in progress in an open externally acquired materials and services lowest value at the lower of the acquisition account, the income that is attributable to a for the development and production of value and the net sales value. work in progress is reported as revenue at intangible assets when they generally meet the rate the work is conducted and/or the the criteria to be recognised as an asset. Financial instruments material is supplied or used. Expenditure on internal development Financial instruments that are held primarily (LFV’s own time spent) is entered as a to generate yield or appreciation are valued at General valuation principles current cost. actual value, unless otherwise indicated below. Unless otherwise stated below, assets, liabil- Expenditure on research may not be set up The actual value is determined on the basis of ities and provisions have been valued at as an asset. Linear depreciation takes place the instrument’s market value. The change in their acquisition value. according to a plan over the course of the value since the previous balance sheet date is asset’s useful life. The useful life of an intan- recognised in the income statement. Fixed assets gible fixed asset amounts to more than five Financial instruments, that are not held to Tangible fixed assets years in cases where it can be determined generate yield or appreciation, are valued at Tangible fixed assets have been valued at with reasonable certainty that the useful life amortised cost using the effective interest their acquisition value with deductions for is longer, which is mainly the case for opera- method, except for shares in wholly and planned depreciation. Where appropriate, tional air traffic management systems. partly owned companies, financial guarantee write-downs are performed in the way contracts and leases agreements. indicated below. Planned depreciation is Planned depreciation The following financial instruments shall calculated by allocating acquisition value to Installations in the field 15–30 years not be valued at actual value: periods in a linear fashion over the course Buildings 15–30 years 1. financial instruments held to maturity; of the assessed useful life. Electrical installations 5–20 years 2. loans receivable and other receivables Depreciation begins when an asset is Telecommunications equipment 5–15 years arising from the business and which are ready to be used for its intended purpose. Vehicles, machinery not held for trading purposes, When an asset includes significant compo- and equipment 3–15 years 3. shares and participations in wholly or nents with different useful lives, the rules Intangible assets 3-12 years partly owned companies, and regarding what is known as component Leased assets 3–5 years 4. liabilities, except for liabilities included depreciation are applied. The depreciation as part of a trading portfolio. periods are continuously reassessed. When there are indications that an asset’s Current investment projects are reported value has decreased, the potential need for Financial instruments held to maturity are under the heading Fixed assets under a write-down is tested by applying ESV’s financial assets and financial liabilities that construction, found under tangible fixed general advice, Chapter 5, Section 5, have fixed or determinable payments and assets. The item in part includes assets of Write-downs. fixed maturities, and which the agency an intangible nature that will be reported as intends to keep until maturity. Loans receiv- intangible fixed assets in conjunction with Leasing able and receivables are financial assets them being utilised and capitalised under Leasing is classified as either financial with fixed or determinable payments but each installation item. or operational leasing. Classification is which are not derivative instruments. performed by applying the ESV’s general Amortised cost is the amount at which Intangible fixed assets advice concerning financial leasing. a financial asset or financial liability is rec- LFV applies ESV’s regulations and general Agreements classified as financial leasing, ognised after acquisition with regard to: advice concerning reporting of expenditure mainly vehicles, are recognised as assets • allocation of interest accrued using the on research and development. Expenditure at nominal cost value with deductions for effective interest method, on development which is of significant planned depreciation, and obligations to • repayment of principal, and value to the business in future years shall pay future leasing fees are recognised • any write-downs. be admitted as an intangible fixed asset if as liabilities. all the conditions specified in the regu- Expenditure on operational lease agree- A financial asset or a financial liability lations exist. Intangible assets reported ments are expensed in a linear fashion over is reported in the balance sheet when the by LFV include expenses for purchased the lease period. Group becomes a party to the financial

46 LFV ANNUAL REPORT 2016 ACCOUNTING AND VALUATION PRINCIPLESVIGNETTE

instrument’s contractual terms and condi- have been informed. Future commitments trollers aged 60–65. For controllers born tions, regardless of how the instrument is concerning agreements with employees in 1988 or later, PA16 does not include the valued. Purchases and sales are reported concerning occupational pensions or partial exception relating to temporary retirement per trade date. pensions, leave of absence with salary pension from age 60. The pension liability and those who have been made redundant is calculated by the National Government Accounts receivable due to a shortage of work where a future Employee Pensions Board (SPV) according Accounts receivable are entered at the commitment through the Swedish Job to the job security grounds and entails that amount by which they are assessed to flow Security Foundation may be invoked are pension rights are calculated at present in. Provisions for the feared risk of losses also reported under provisions. value. The calculation is based on the in terms of outstanding accounts receiva- The Group computes the present value of current interest rate as per SPV’s board’s ble have taken place following individual liabilities that are pending settlement after decision on the actuarial grounds for calcu- assessment. more than twelve months. The increase in lating the pension liability. the provision that is due to the passing of The defined-benefit part is adjusted Receivables and liabilities in time is reported as an interest charge. upward annually with the change in the foreign currencies price base amount. The current value of the Monetary receivables and liabilities in Pensions pension liability, as of 31 December 2016, foreign currencies are recalculated at the As of 1 January 2016, a new pension has been calculated in accordance with the exchange rate on the accounting date. agreement applies for the state, PA 16, calculation basis for 2017. The gross rate of Monetary receivables and liabilities that are which consists of two divisions. Division I -0.3 per cent has been used, with deductions forward covered are recognised based on involves a pension scheme that is defined- for estimated yield tax of 0.1 per cent and the forward rate. contribution in its entirety and applies to overheads of 0.2 per cent, i.e. the net rate is Non-monetary receivables and liabil- employees born in 1988 and later. Division -0.6 per cent. The current value of the pen- ities are recognised at the rate at time of II involves defined benefits and to some sion liability, as of 31 December 2015, was acquisition. Revaluation of non-monetary extent a defined contribution, and it corre- calculated in accordance with the calculation items in foreign currencies are reported sponds to the PA03 agreement and applies basis for 2016, which means a gross rate of at the exchange rate on the date when the to employees born before 1988. PA16 thus 0.0 per cent, with deductions for estimated revaluation occurs. entails a change to the state pension system yield tax of 0.3 per cent and overheads of Exchange rate differences are recog- that fully impacts employees born in 1988 0.2 per cent (net rate -0.3 per cent). nised in the income statement for the year and later, meaning a shift to a defined- The gross rate is calculated by the in which they arise. Exchange gains are contribution pension plan. Employees Swedish Financial Supervisory Authority reported as financial revenue and exchange born before 1988 have been transferred to as an average of the interest rates for long- losses as financial costs under the heading PA16 with some adjustments, but retain a term real interest rate bond 1034, which where the difference has arisen. defined-benefit pension. matures in 2028, for the period 1 October For the comparison year, the previous to 30 September the year before. However, Provisions and contingent liabilities pension agreement PA 03 applied to gov- SPV has in the last two years abandoned the A provision is defined as a liability with an ernment employees born in 1943 or later. use of the Swedish Financial Supervisory uncertain amount and/or date when it will Defined-benefit pensions in accordance Authority’s rate and has instead decided on be settled. A provision is reported in the with PA 03 apply to employees born from a interest rate floor of -0.3 (0.0) per cent for balance sheet when 1943 to 1973 or employees with an annual the state-owned enterprises. 1. the Group has an obligation (legal or income of at least 7.5 times the income base The year’s provisions for the pension lia- informal) as a result of a past event, amount (SEK 435,750 in 2015). People bility have been reported as costs together 2. it is probable that an outflow of resources born prior to 1943 who have a retirement with the premiums paid. The interest por- will be required to settle the obligation, age of 65 are covered by PA-91. For air tion of the year’s pension costs are reported and traffic controllers, PA-91 applies if they under financial items. The interest portion 3. a reliable estimation of the amount can were born prior to 1948. includes the index-linking of pension be made. The pension liability includes defined- benefits and a change to the calculation Provisions for restructuring are made when benefit retirement pensions, survivor’s basis as a result of changed interest rate there is an approved and comprehensive pensions, disability pensions and tempo- assumptions. The pension liability includes restructuring plan and the affected people rary retirement pensions for air traffic con- commitments with respect to both active

LFV ANNUAL REPORT 2016 47 VIGNETTEACCOUNTING AND VALUATION PRINCIPLES

staff and pensioners. One hundred per cent for fiscal arrangements equivalent to the operating costs for 2016 is SEK 30,000. of conditional commitments with respect balance sheet allocations a limited company With regard to rounding off amounts stated to staff who have a retirement age prior can utilise with supplements for non- in the annual report, the figures reported to 65 are included in the liability as these deductible items and non-taxable revenue. have in some cases been rounded off, which pension provisions are judged to become Deductions are also made for the income means that tables, graphs and calculations fully utilised. tax paid by subsidiaries. do not always tally. Figures between 0 The state-owned enterprise pays special The state-owned enterprises reports and 0.5 are reported in tables as 0. A dash payroll tax on pension payments. Provi- liabilities regarding the calculated tax indicates that there is no value. sions for special payroll tax have therefore equivalent for the financial year. The final been reported on the pension liability at the amount of tax equivalent for the year that is financial year end. to be paid will be confirmed by the Govern- Liabilities for pensioners that LFV has ment in conjunction with the ratification of pursuant to the above are reported under LFV’s annual report for 2016. Provisions. Both the state-owned enterprise and the Group recognise deferred tax on differences Contingent liabilities between reported values and values for tax Contingent liabilities are recognised obli- purposes and temporary differences, as well gations arising from past events but which as deferred tax as a result of intended appro- are not recognised as a liability or provision priation calculated on the year’s income. because that obligation cannot be meas- The equity part of, on the one hand, the ured with sufficient reliability, or it is not subsidiaries untaxed reserves and, on the probable that an outflow of resources will other, the utilised part of the state-owned be required to settle the obligation. enterprise’s opportunity to over-depreciate Contingent liabilities are also recognised assets is included in the restricted reserves potential obligations arising from past that are reported partly in the state-owned events and whose existence is confirmed company’s accounts, partly in the consoli- only by one or more uncertain future events, dated accounts. not wholly within the agency’s control, LFV pays special payroll tax on pension occurring or not occurring. costs and is liable for value added tax in accordance with the Swedish Value Added Taxes, tax equivalent and dividend Tax Act. Since 2009, LFV has not had LFV’s subsidiaries recognise current taxes the right to deduct VAT attributable to and thus pay income tax. The corporation exercising its official authority, which refers tax rate in Sweden is 22 per cent. to LFV’s imposition of air traffic charges. The state-owned enterprise LFV has However, LFV receives compensation for no tax liability for income tax, but LFV input VAT as per the Ordinance (2002:831) applies10 the chapter in ESV’s Special concerning Authorities’ Rights to Compen- provisions for state-owned enterprises and sation for Input VAT. complies with the Government’s regulations For 2016, LFV will pay a dividend concerning what is known as tax equivalent, equivalent to 15 per cent of its profit after which means that state-owned enterprises tax. The final amount of the dividend are to provide an amount to the central gov- will be confirmed by the Government in ernment equivalent to the income tax that conjunction with the ratification of LFV’s would have been payable had the organisa- annual report for 2016. tion been a limited company. The current tax equivalent for the year is Other calculated on the basis of the profit reported The limit for allocations in the annual in the group accounts with deductions accounts of accrued operating revenue and

48 LFV ANNUAL REPORT 2016 NOTES

NOTES Amounts are listed in SEK (millions) unless otherwise stated.

Note 1: Aviation revenue SALARIES AND REMUNERATION STATE-OWNED BOARDS, THE DIRECTOR-GENERAL AND CEOS OTHER EMPLOYEES GROUP ENTERPRISE 2016 2015 2016 2015 2016 2015 2016 2015 State-owned enterprise 2 2 766 756 Route charges 1,747 1,990 1,747 1,990 Subsidiaries 0 0 4 7 Terminal charges 144 167 144 167 Total for the group 2 2 770 763 Remuneration for air traffic services 311 308 311 308 Total 2,202 2,465 2,202 2,465 SALARIES/FEES FOR THE BOARD OF DIRECTORS AND DIRECTOR-GENERAL IN SEK Olle Sundin, Director-General 01/01/16–31/12/16 1,591,024 Note 2: Other operating revenue Olson Jan, chair 01/01/16–31/12/16 105,000 Hafström Marie, Deputy Chair 01/01/16–31/12/16 30,000 STATE-OWNED Andrén Eva, director 01/01/16–31/12/16 30,000 GROUP ENTERPRISE Davidson Johan, director 01/01/16–31/12/16 30,000 2016 2015 2016 2015 Helgesson Mats, director 01/01/16–31/12/16 30,000 Rent and leaseholds 12 12 12 12 Hvittfeldt Ann-Christine, director 01/07/16–31/12/16 15,000 Commercial services 800 754 824 786 Nilsson Per, director 01/01/16–31/12/16 30,000 Grants obtained 88 68 88 68 Sylvander Marcela, director 01/01/16–30/06/16 15,000 Service exports 40 57 – – Bredberg Anne-Marie, Other 8 8 8 8 staff representative 01/01/16–31/12/16 30,000 Total 947 899 932 874 Lennartsson Peter, staff representative 01/01/16–31/12/16 30,000 The group companies’ proportion of the state-owned enterprise’s external costs, 2.5% (3.3)

ABSENCE DUE TO ILLNESS (%) STATE-OWNED ENTERPRISE Note 3: Staff costs and information about staff, Director-General, board and auditors. 2016 2015 Total absence due to illness as STATE-OWNED a proportion of normal working hours 2.71 3.06 GROUP ENTERPRISE Proportion of total absence 2016 2015 2016 2015 due to illness representing continuous Salaries 772 765 768 758 absence of 60 days or more 41.82 60.50 Social security costs 776 769 776 767 Absence due to illness distributed by gender: Other staff costs 19 -25 18 -25 Men 1.60 1.44 Women 4.13 5.13 Total 1,567 1,509 1,563 1,501 Absence due to illness distributed by age group: 29 or younger 1.19 1.24 Social security costs include 528 525 528 525 pension costs, including 30–49 years 2.26 2.43 payroll tax of 50 or younger 3.55 4.43

AUDITOR’S FEES Swedish National Audit Office Note 4: Miscellaneous external costs – Audit assignment 0 1 0 1 STATE-OWNED KPMG GROUP ENTERPRISE – Audit assignment 0 0 – – 2016 2015 2016 2015 – Other assignment 1 1 1 1 Cost of onward sales 35 35 11 5 Transcendent Group – 0 – 0 Cost of property and rent 66 66 66 66 PwC Materials, maintenance, – Audit assignment 1 0 1 0 transport 129 123 129 123 Total 2 2 2 1 Travel costs 21 20 20 20 Outside services 896 863 916 891 Administrative costs 49 48 46 47 Total 1,195 1,155 1,188 1,151

The group companies’ proportion of the state-owned enterprise’s external costs, 0.1 % (0.3)

LFV ANNUAL REPORT 2016 49 NOTES

Note 5: Depreciation and write-downs Note 8: Interest charges and similar items

STATE-OWNED STATE-OWNED GROUP ENTERPRISE GROUP ENTERPRISE 2016 2015 2016 2015 2016 2015 2016 2015 Depreciation Interest charges to banks – – Intangible assets 37 1 37 1 Interest portion of the change in Buildings 12 15 12 15 pension liability for the year 231 466 231 466 Electrical installations 3 3 3 3 Interest charges Telecommunications equipment 84 177 84 177 for financial leasing 0 0 0 0 Vehicles, machinery and Other financial costs 0 2 0 2 equipment 4 4 4 4 Total 231 468 231 468 Leased equipment 1 1 1 1

Write-downs Note 9: Tax/tax equivalent on profit for the year Intangible assets – – – – Buildings – 0 – 0 GROUP Electrical installations 0 – 0 – 2016 2015 Telecommunications equipment 6 2 6 2 Tax equivalent for the year Vehicles, machinery and Group profit/loss before tax 14 39 equipment 0 1 0 1 Deduction for associated companies’ share -0 -2 Work in progress – – – – Profit/loss after associated companies’ share 14 37 Leased equipment 0 – – 0 Reported tax for the year -4 -9 Total 148 204 148 204 of which tax in subsidiaries -1 -2 Profit/loss after tax 9 30

Note 6: Income from holdings in associated companies Intangible fixed assets STATE-OWNED Note 10: GROUP ENTERPRISE STATE-OWNED 2016 2015 2016 2015 GROUP ENTERPRISE Associated companies: 2016 2015 2016 2015 Entry Point North AB Acquisition value Share in associated brought forward 50 17 50 17 company profits 1 2 – – Acquisitions for the year 61 33 61 33 NUAC HB Sales/disposals -3 – -3 – Share in associated Reclassifications 480 – 480 – company profits 0 0 – – SAAB Digital Air Traffic Acquisition value 589 50 589 50 Solutions AB carried forward Share in associated company profits -1 – – – Depreciation and Total 0 2 – – write-downs brought forward -17 -17 -17 -17 Depreciation for the year -37 -1 -37 -1 Sales/disposals 3 – 3 – Reclassifications -253 – -253 – Note 7: Interest income

STATE-OWNED Accumulated depreciation and -304 -17 -304 -17 GROUP ENTERPRISE write-downs carried forward 2016 2015 2016 2015 Interest income from Planned residual 284 33 284 33 cash and bank balances 0 0 0 0 value carried forward Interest income from short-term investments 4 6 4 6 The useful life of intangible fixed assets amounts to more than five years in Interest income from cases where it can be determined with reasonable certainty that the useful short-term receivables 0 – 0 – life is longer, which is mainly the case for operational air traffic management Other financial revenue 2 4 2 3 systems. Total 7 10 7 9

50 LFV ANNUAL REPORT 2016 NOTES

Note 11: Tangible fixed assets

STATE-OWNED STATE-OWNED GROUP ENTERPRISE GROUP ENTERPRISE 2016 2015 2016 2015 2016 2015 2016 2015 BUILDINGS VEHICLES, MACHINERY, ETC. Acquisition value Acquisition value brought forward 444 444 444 444 brought forward 80 84 80 84 Acquisitions for the year 3 – 3 – Acquisitions for the year 0 8 0 8 Sales/disposals -2 -1 -2 -1 Sales/disposals -25 -12 -25 -12 Acquisition value 444 444 444 444 Reclassifications -5 – -5 – carried forward Acquisition value 51 80 51 80 carried forward Depreciation and write-downs brought forward -264 -249 -264 -249 Depreciation and Depreciation for the year -12 -15 -12 -15 write-downs brought forward -65 -72 -65 -72 Write-downs for the year – 0 – 0 Depreciation for the year -4 -4 -4 -4 Sales/disposals 2 1 2 1 Write-downs for the year 0 -1 0 -1 Depreciation and -274 -264 -274 -264 Sales/disposals 25 12 25 12 write-downs carried forward Reclassifications 4 – 4 – Accumulated depreciation and -41 -65 -41 -65 Planned residual value 170 180 170 180 write-downs carried forward carried forward Planned residual value 10 15 10 15 carried forward ELECTRICAL INSTALLATIONS Acquisition value brought forward 72 72 72 72 LEASED FIXED ASSETS Acquisitions for the year 0 – 0 – Acquisition value Sales/disposals 0 – 0 – brought forward 6 7 6 7 Acquisition value 72 72 72 72 Acquisitions for the year 3 0 3 0 carried forward Sales/disposals -3 -2 -3 -2 Acquisition value 6 6 6 6 Depreciation and carried forward write-downs brought forward -51 -48 -51 -48 Depreciation for the year -3 -3 -3 -3 Depreciation and Write-downs for the year 0 – 0 – write-downs brought forward -3 -3 -3 -3 Sales/disposals 0 – 0 – Depreciation for the year -1 -1 -1 -1 Accumulated depreciation and -54 -51 -54 -51 Write-downs for the year – 0 – 0 write-downs carried forward Sales/disposals 2 2 2 2 Other adjustments – -1 – -1 Planned residual value 18 21 18 21 Accumulated depreciation and -2 -3 -2 -3 carried forward write-downs carried forward

TELECOMMUNICATIONS EQUIPMENT Planned residual value 4 3 4 3 carried forward Acquisition value brought forward 2,082 2,055 2,082 2,055 Acquisitions for the year 118 50 118 50 FIXED ASSETS UNDER CONSTRUCTION Sales/disposals -112 -23 -112 -23 Acquisition value Reclassifications -475 – -475 – brought forward 238 221 238 221 Acquisition value 1,613 2,082 1,613 2,082 Acquisitions for the year 137 108 137 108 carried forward Completed fixed assets -183 -91 -183 -91 Acquisition value 192 238 192 238 Depreciation and carried forward write-downs brought forward -1,484 -1,328 -1,484 -1,328 Depreciation for the year -84 -178 -84 -178 Write-downs for the year -4 -2 -4 -2 Sales/disposals 110 23 110 23 Reclassifications 249 – 249 – Accumulated depreciation and -1,213 -1,484 -1,213 -1,484 write-downs carried forward

Planned residual value 400 598 400 598 carried forward

LFV ANNUAL REPORT 2016 51 NOTES NOTES

Note 12: Holdings in subsidiaries

PERCENTAGE NUMBER HOLDING NOMINAL BOOK C.I.N. SHARES OF SHARE CAPITAL VALUE VALUE Direct holdings Holding in group company, the state-owned enterprise – LFV Holding AB 556374-8432 75,000 100 75 75

Indirect holdings (via LFV Holdings AB) Holding in group company LFV Aviation Consulting AB 556193-1469 3,000 100 3 – LFV Norway AS 915,874,770 100 100 300 –

Note 13: Holdings in associated companies

STATE-OWNED GROUP ENTERPRISE 2016 2015 2016 2015 Accumulated shares of profits etc. At the beginning of the year 13 12 – – Share of associated companies’ net profit/loss for the year 0 2 – – Change in associated companies’ equity etc. 25 -1 – – Total 38 13 – –

Book value 38 13 – –

Holdings in associated company – Specification of the state-owned enterprise’s and the group’s holdings in associated companies

PERCENTAGE SHARE OF NUMBER HOLDING NOMINAL ADJUSTED C.I.N. SHARES OF SHARE CAPITAL VALUE EQUITY BOOK VALUE Specification of the state-owned enterprise’s and the group’s holdings in associated STATE-OWNED companies GROUP ENTERPRISE Indirect holdings (via LFV Holdings AB) NUAC HB 969745-6433 – 50 0 0 0 – Entry Point North AB 556682-8272 100,000 25 14 14 14 – SAAB Digital Air Traffic Solutions AB 559060-0747 205 41 24 24 24 – Indirect holdings (via EPN AB) Entry Point Central Kft 23399583 51 118 0 0 – 143 38 –

Shares of profit/loss from associated companies are reported in the consolidated income statement in two items. One is the profit/loss before tax, the other the tax paid by associated company, which is reported together with the group’s taxes (see Note 9).

Note 14: Other long-term receivables Note 15: Prepaid costs and accrued revenue

STATE-OWNED STATE-OWNED GROUP ENTERPRISE GROUP ENTERPRISE 2016 2015 2016 2015 2016 2015 2016 2015 At the beginning of the year 825 52 822 52 Other prepaid costs 38 22 38 22 Reclassification – 505 – 505 Accrued revenue, other 176 180 161 161 Additional items 176 474 176 471 Total 214 202 199 183 Settlement Eurocontrol -64 -206 -64 -206 Other long-term receivables – 3 – – Total 937 825 934 822

52 LFV ANNUAL REPORT 2016 NOTES NOTES

Note 16: Long-term and short-term investments Note 19: Other provisions

STATE-OWNED STATE-OWNED GROUP ENTERPRISE GROUP ENTERPRISE 2016 2015 2016 2015 2016 2015 2016 2015 Short-term Restructuring costs 17 35 17 35 Commercial paper 100 700 100 700 Other provisions 29 32 29 32 Bond 62 – 62 – Total 46 67 46 67 Total 162 700 162 700

Long-term Corporate bonds – 164 – 164 Total – 164 – 164 Note 20: Liabilities to leasing companies

STATE-OWNED GROUP ENTERPRISE 2016 2015 2016 2015 Leasing companies 4 4 4 4 Note 17: Restricted reserves and unrestricted equity

STATE-OWNED GROUP ENTERPRISE Un- Un- Restricted restricted Restricted restricted Note 21: Other non-interest-bearing liabilities reserves equity reserves equity Sum at the beginning of the STATE-OWNED year according to the adopted GROUP ENTERPRISE balance sheet 272 373 252 346 2016 2015 2016 2015 Dividend – -4 – -4 Security funds 28 26 28 26 Changes attributable to the Reorganisation fund 0 – 0 – group’s associated companies – – – – Liability to Eurocontrol 245 418 245 418 Transfer between unrestricted Total 273 444 273 444 and restricted equity – 1 – – Profit/loss for the year – 9 – 7 Sum at the end of the year 272 379 252 349

Note 22: Accrued costs and deferred revenue

STATE-OWNED Note 18: Pension provisions GROUP ENTERPRISE 2016 2015 2016 2015 STATE-OWNED Salaries and remuneration 5 – 5 – GROUP ENTERPRISE Holiday pay liability 62 62 62 62 2016 2015 2016 2015 Social security contributions 46 44 46 44 At the beginning of the year 5,192 4,334 5,192 4,334 Other accrued costs 45 34 45 34 Pension provisions for the year 391 347 391 347 Deferred revenue 1 8 1 8 Pension payments for the year -78 -69 -78 -69 Total 160 149 159 147 Indexation and interest -45 -4 -45 -4 Change due to altered calculation basis 343 584 343 584 Total 5,803* 5,192* 5,803* 5,192* Note 23: Contingent liabilities * In the annual report for the state, other actuarial grounds for calculating the STATE-OWNED pension liability are used. This means that LFV’s pension liability in the annual GROUP ENTERPRISE report for the state in 2016 amounted to SEK 4,496 million (4,104) (of which 2016 2015 2016 2015 SEK 878 million (801) was special payroll tax). Security for the pension commitments of LFV Airport Center AB 2 2 2 2 Security for subsidiaries (LFV Aviation Consulting AB) – – 15 15 Total 2 2 17 17

LFV ANNUAL REPORT 2016 53 REPORTING IN ACCORDANCE WITH THE PERFORMANCE PLAN

REPORTING IN ACCORDANCE WITH THE PERFORMANCE PLAN In accordance with the EU’s Single European Sky (SES) legislation, performance targets have been set with respect to en route air navigation services and terminal Arlanda for the second reference period (RP2), 2015–2019. The following table presents the targets for the Danish-Swedish airspace block (DK-SE FAB) and LFV’s preliminary follow-up of these for 2015 and 2016.

TARGET AREAS – CPI CPI (definition) TARGET 2016 OUTCOME 2016 TARGET 2015 OUTCOME 2015 AVIATION SAFETY (according to the RAT methodology)

AREA: Danish-Swedish airspace Aviation safety incidents 100 % 100 % 100 % 100 %

Maturity of SMS – Safety management system – Safety culture (scale A= lowest, E=highest) Danish-Swedish airspace Maturity according to survey C C AREA: LFV Maturity according to survey C D C D

Maturity of SMS – Safety management system – Other Danish-Swedish airspace Maturity according to survey C C AREA: LFV Maturity according to survey C C C C

ENVIRONMENT Average horizontal en route efficiency En route Danish-Swedish airspace Discrepancy between distance flown 1.20 % 1.20% and the straightest distance. AREA: LFV Discrepancy between distance flown 1.21% 1.19% and the straightest distance.

CAPACITY En route ATFM delays – minutes per flight

AREA: En route Danish-Swedish airspace Delays caused by air navigation services 0.10 0.05 0.10 0.02 Terminal ATFM delays – minutes per flight AREA: Terminal Arlanda Delays caused by air navigation services 0.35 0.22 0.35 0.07

COST EFFICIENCY (Sweden), SEK Unit cost, Sweden 569.89 585.00 AREA: En route Unit cost, LFV 440.70 483.77 457.11 565.77 (- excl. costs exempted from risk sharing) (420.49) (435.01) Unit cost, Sweden 1,144.61 1,212.76 AREA: Terminal Arlanda Unit cost, LFV 810.45 969.85 856.93 1,142.53 (- excl. costs exempted from risk sharing) (815,31) (862.70)

Aviation safety The objective is very ambitious and explanations for the pension provisions resulting from the reduction in The target at the EU level is that the RAT method- discrepancy include the weather and military exercises. interest rates. The lower outcome listed in parenthe- ology be introduced from 2017. For LFV, however, the ses is exclusive of these costs. The costs exempted performance plan’s target is that this methodology Capacity from risk sharing are settled financially at the end shall be fully introduced in 2015. LFV has achieved this The target relates to air traffic delays caused by air of RP2, which means that final reconciliation will target. In addition to the use of the RAT methodology, navigation services. The performance plan’s capacity only take place in 2020 at the earliest. If exempted there are targets relating to the assessed degree of target with respect to average delays en route applies pension costs are not taken into account, the target maturity according to a survey concerning the safety to the Danish-Swedish functional airspace block in for en route was achieved in 2016. However, the management system, divided up into safety culture its entirety. The outcome for 2016 indicates that LFV target for terminal has not been achieved due to and other. LFV’s degree of maturity meets the set contributed to the target being achieved. The capacity inflation having been lower than planned, which targets. These targets only come into force at the EU target for terminal Arlanda was also achieved by a affects the indexing of the target for the unit cost level from 2019. comfortable margin. that is established in the fixed price. The outcome for 2015 has been adjusted based on LFV’s report to the Environment Cost efficiency Swedish Transport Agency in spring 2016. The target The objective is for the discrepancy between actual Objectives for cost efficiency are set at the national for terminal Arlanda has thus not been reached. distance flown and the straightest distance to be level and measure real unit costs in the 2012 price Over the course of 2016, LFV has participated in the measured. The outcome for 2015 has been updated level. There was a high outcome for both en route and Swedish Transport Agency’s consultations. by the EU and now the target level is achieved. The terminal Arlanda in 2016 as this contains costs outcome for 2016 differs slightly from the target level. exempted from risk sharing regarding additional

54 LFV ANNUAL REPORT 2016 REPORTING IN ACCORDANCE WITH THE PERFORMANCE PLAN REPORTING IN ACCORDANCE WITH THE APPROPRIATION DIRECTIONS

REPORTING IN ACCORDANCE WITH THE APPROPRIATION DIRECTIONS The following is a summary report of Luftfartsverket’s (LFV’s) efforts to ensure transport policy objectives are achieved, and of the assignments and the remit and objectives set out in the appropriation direc- tions. A more detailed account of the results of LFV’s operations in 2016 can be found in other parts of the annual report.

Transport policy objectives air navigation safety and capacity in for 2016 was 1 per cent. There has been As per the Ordinance (2010:184) with 2016. The environmental objective has not a continued detrimental impact on LFV’s instructions for Luftfartsverket, we are to reached for 2016. The objectives regarding profit in 2016 as a result of the low interest work to ensure that the transport policy cost efficiency have partially been achieved. rate situation, which has involved both an objectives are archived. Aviation plays an LFV has continued to work actively on increase in pension costs and lower interest important role in making it possible for research and innovation with the aim of revenue. This has partly been compensated businesses and citizens throughout the developing new technologies of signifi- for by the growth in traffic and by a contin- entire country to transport passengers and cance to its operations and thus contribute ued active effort to reduce costs. cargo, both within the country and around to achieving long-term targets with respect LFV’s financial target with respect to the the world. Especially for many small towns, to safety, efficiency and environmental equity/assets ratio is that it amounts in the there is no realistic alternative to flying that adaptation. LFV is pursuing a change long term to at least 15 per cent. As of 31 can ensure quick and efficient communi- programme in order to improve efficiency, December 2016, the equity/asset ratio rose cations. LFV has an important role in the ensure competitiveness and reduce the unit to 11 per cent. The reason for the target aviation sector. A safe, efficient and envi- cost of air navigation services. not being reached for 2016 is the increased ronmentally adapted air navigation service pension liability resulting from the prevail- is essential to well-functioning aviation. Presentation of investment projects ing interest rate situation. In the event of a LFV contributes to the functional objec- In the three-year plan for 2017–2020, LFV future rise in the discounting rate, a reduc- tive – which involves making travel and presents particularly extensive investment tion of the pension liability is expected and transport accessible – by providing safe, projects during the three years of over SEK in the long run, LFV endeavours to redeem efficient and environmentally adapted air 50 million, along with cost and schedule. all or part of the pension liability and navigation services throughout the entire switch to paying premiums instead. If and country, which is a prerequisite for the Remit in accordance with when such a pension liability redemption accessibility aviation provides. the appropriation directions can be realised is uncertain in the current LFV contributes to the consideration As per the appropriation directions for situation and also depends to a large extent objective – which deals with safety, the 2016, LFV is to develop its business on interest rate development. environment and health – by offering safe models for airports owned or controlled air traffic services that take the environ- by the Swedish State with the aim of, for ment into consideration to the greatest example, achieving a distinct range of possible extent. The system is set up so as services and good efficiency. to prevent LFV contributing to anyone be- In 2016 LFV, together with Swedavia, ing killed or seriously injured. By optimis- has conducted an investigation into the ing routes and the flow of traffic, LFV is conditions for establishing remotely oper- contributing to reducing the environmental ated air traffic management at the airports impact of aviation. in Malmö, Visby, Östersund, Umeå and LFV plays an active role in the current Kiruna. The work is now progressing into effort to develop the European system a valuation phase. The goal is for remotely of air navigation services in a way that operated air traffic management to result in makes it possible to manage the long-term operational and financial benefits. growth in air traffic to be managed, while achieving the targets of improved aviation Targets pursuant to safety, reduced costs and minimised envi- the appropriation directions ronmental impact. LFV’s financial target with respect to In accordance with Reporting in Accord- return on equity is that it, after tax equiv- ance with the Performance Plan (p 54), alent over a business cycle, shall amount LFV achieved the EU targets regarding to 4 per cent of equity. Return on equity

LFV ANNUAL REPORT 2016 55 RISKS

RISKS

Internal controls is the process that, with reasonable certainty, ensures that an agency fulfils its mission and objectives in accord- ance with the requirements of government regulation. The process includes the stages of risk analysis, control measures, monitoring, documentation and assessment.

LFV’s risk process is based on set primary Pension liability considered to be low, taking into consider- objectives. Risk management is integrated LFV secures the majority of its pension ation the activities being conducted and the into operational planning and risks are obligations through balance sheet provi- framework set out in the financial policy. monitored continuously. The process of sions. Reductions in the discounting risk management includes operations as rate have significant and direct impact LFV’s protection against fraud etc. well as processes and projects. on earnings. All in all, LFV protection against fraud, A redemption of the pension liability corruption, bribery and other irregular- Risks would reduce the risk, but current interest ities is assessed as good. LFV’s core Position 2019 rates combined with the conditions in operations are regulated and supervised To achieve Position 2019, LFV is imple- general mean that such a redemption is not by the Swedish Transport Agency. LFV’s menting an efficiency programme. During feasible in the current situation. organisational structure, procedural rules the past year, changing conditions have and delegation, regulations, instructions, entailed risks and delays in activities, Aviation safety processes, etc. are defined and document- which requires compensation by way of In 2016, there were 33 events involving ed. In addition, there are further documents new measures. drones in the air around Swedish airports. and a digital staff handbook that contribute Streamlining activities are followed up Drones are a priority focus area within to clearly setting out the regulations and as part of LFV’s operational management. LFV’s aviation safety work. approach with regard to these matters. All Over the past year, several events have instructions and documents are published Performance plan occurred over the Baltic Sea with foreign on the intranet. Current information about The conditions for route charges are set military having flown without a transponder. corruption, fraud, bribery and other irreg- out in a so-called performance plan. To LFV has taken several measures. Among ularities is published via the intranet and achieve the objectives, requirements are other things, an investment has been made communicated when new employees are set for cost reductions. LFV has so far in a primary radar installation that will taken on and when managers are trained. fulfilled these requirements, but the risk contribute to better radar coverage. In 2017, further training initiatives will be of not being able to achieve the additional carried out. savings required is great. Ahead of the Financial risks forthcoming reference period 3, which LFV’s financial activities and financial risks Other risk reporting will commence in 2020, LFV is trying are managed on the basis of a financial In 2016 LFV submitted a risk and vul- to influence the design of the regulatory policy approved by the board of directors. nerability analysis to the Swedish Civil framework, among other things, for This policy sets out the framework for the Contingencies Agency (MSB). LFV is the greater consideration to be given to the air financial risk LFV may be exposed to with- agency assigned special responsibility for navigation service providers’ individual in the areas of investments, currency trading emergency preparedness in accordance circumstances when targets are set. and financial and operational leasing. with ordinance (2006:942) on Emergency Deviations in traffic volume and the LFV has significant surplus liquidity. Preparedness and Heightened State of inflation index also affect revenues. To limit the credit risk, there is regulation Alert. LFV also prepares an annual safety of counter-parties, instruments, maturity analysis that has a bearing on the protec- Cyber security and allowed investment. tion of national security and terrorism in New dynamic cyber security threats, com- LFV has operating costs and high accordance with the Protective Security bined with an increasing use of IT, increase operating revenue in foreign currency, Ordinance (1996:633). the risk exposure to infringements and/or which entails exchange risks. Inflows and impact on our technical systems. outflows of foreign currency are hedged LFV is working to address and limit the according to policy. impact of these threats. The risk value of the financial risks is

56 LFV ANNUAL REPORT 2016 RISKS DIVIDEND PROPOSAL

DIVIDEND PROPOSAL

Luftfartsverket has to yield a dividend of 15 per cent of the year’s We certify that this annual report provides a true and fair picture of profit. A profit of SEK 9 million is being reported for 2016. It is the organisation’s profits and of its costs, revenue and Luftfartsver- therefore proposed that a dividend of SEK 1 million be paid. Tax ket’s financial position. for the year amounts to SEK 4 million. Tax payable amounts to Furthermore, we deem the internal controls at Luftfartsverket to SEK 4 million. be satisfactory.

Norrköping, 16 February 2017

Jan Olson, Olle Sundin, chair director-general

Ann-Marie Bredberg Mats Helgesson

Eva Andrén Marie Hafström

Peter Lennartsson Johan Davidson

Ann-Christine Hvittfeldt Per Nilsson

The Swedish National Audit Office’s audit report concerning this annual report has been submitted in February 2017.

Stefan Andersson Andreas Andersson

LFV ANNUAL REPORT 2016 57 AUDIT REPORT

AUDIT REPORT FOR LUFTFARTSVERKET 2016

REPORT ON THE the obligatory and can be found on pages due to impropriety or error, and to submit ANNUAL REPORT 1–28. Senior management is responsible an audit report containing SNAO’s state- WITH CONSOLIDATED for this information. ments. Reasonable certainty is a high level ACCOUNTS Our statements regarding the annual of certainty, but is no guarantee that the audit report with consolidated accounts do not carried out in accordance with the ISSAI and Statements cover this information and we do not issue the RRI will always detect the presence of a In accordance with Section 5 of the Audit- any statements supporting this information. material inaccuracy. Inaccuracies may arise ing of State Activities, etc. Act (2002:1022), In connection with our audit of the annual due to impropriety or error and are consid- the Swedish National Audit Office (SNAO) report with consolidated accounts, it is ered material if they, individually or together, has audited the annual report and consol- our responsibility to read the information can reasonably be expected to impact on the idated accounts for the Luftfartsverket identified above and consider whether it is financial decision the user makes on the basis (LFV) for 2016, dated 16/02/2017. significantly inconsistent with the annual of the annual report. According to the SNAO’s assessment, report, with consolidated accounts or with As part of an audit in accordance with LFV has: the knowledge we have otherwise obtained the ISSAI, we use professional judgement • drawn up the annual report and consoli- during the audit, as well as to assess and employ a professional scepticism dated accounts in accordance with the whether the information in general appears throughout the audit. In addition: Ordinance (2000:605) concerning Annual to contain serious inaccuracies. • we identify and assess the risks of Reports and Budget Documentation, If, based on the work carried out with material inaccuracies in the annual report, instructions, appropriation directions and regard to this information, we conclude regardless of whether they are due to government decisions specific to LFV. that the information contains a serious impropriety or error, structure and • in all material respects provided a true error; we are obligated to report this. We conduct our audit procedures, inter alia, and fair picture of LFV and the group’s have nothing to report in this regard. based on these risks, and obtain evidence financial results, financing and financial that is sufficient and appropriate to con- position as of 31 December 2016. The senior management’s stitute grounds for our statements. The • submitted a directors’ report and other responsibility for the annual report risk of not detecting a material inaccuracy information that is consistent with and LFV’s senior management is responsible for resulting from impropriety is higher supports a true and fair picture in the drawing up an annual report that provides a than that of a material inaccuracy due to annual report as a whole. true and fair picture in accordance with the error, because impropriety may involve Ordinance (2000:605) concerning Annual acting in collusion, forgery, deliberate Grounds for the statements Reports and Budget Documentation and in omissions, misinformation or failure to The SNAO has carried out the audit in ac- accordance with instructions, appropriation implement internal controls. cordance with the International Standards directions and other decisions concerning of Supreme Audit Institutions (ISSAI) for LFV. LFV’s senior management are also • we obtain an understanding of that part of financial auditing and the SNAO’s instruc- responsible for ensuring that the internal the LFV’s internal control that is relevant tions for auditing profit and loss account- controls they deem necessary are in place, for our audit in order to structure audit ing and other information in the annual in order to draw up an annual report that procedures that are appropriate given report (RRI). Our responsibility according does not contain material inaccuracies, the circumstances, but not for stating an to these standards is described in more de- regardless of whether these are due to opinion about the effectiveness of LFV’s tail in the section entitled Auditor’s respon- impropriety or error. In preparing the annual internal controls. sibility. We are independent of the LFV report, the senior management is respon- in accordance with the ISSAI 30 Code of sible for the assessment of LFV’s ability • we evaluate the appropriateness of Ethics and have fulfilled our commitments to continue operations. They highlight, as accounting principles used and the rea- pursuant to these ethical rules. We believe applicable, circumstances that may affect sonableness of management’s accounting that the audit evidence we have obtained the ability to continue operations and to use estimates and related disclosures. is sufficient and appropriate to provide a the going concern assumption, unless there basis for the SNAO’s statements. are special reasons not to do it. • we draw a conclusion on the appropri- ateness of management using the going Information beyond the annual Auditor’s responsibility concern assumption in preparing the annual financial report Our goal is to achieve a reasonable degree report. We also draw a conclusion, based The annual report with consolidated of certainty that the annual report as a whole on the acquired audit evidence, on whether accounts contains information beyond is free from material inaccuracies, whether there are any material uncertainty factors

58 LFV ANNUAL REPORT 2016 AUDIT REPORT

related to such events or circumstances that has in all material respects used appropri- Grounds for the statements may lead to significant doubts about the ations and revenue in accordance with the We have carried out the audit in accord- LFV’s ability to continue operations. If we purposes determined by the Riksdag and in ance with the ISSAI and the RRI. Our conclude that there is a material uncertainty compliance with the applicable regulations. responsibility in this respect is described in factor, we shall in the audit report draw more detail in the section entitled Auditor’s attention to the disclosures in the annual Grounds for the statements responsibility. report concerning the material uncertainty We have carried out the audit in accord- We believe that the evidence we have factor and the assessment made or, if such ance with the ISSAI and the RRI. Our obtained is sufficient and appropriate to information is insufficient, modify our responsibility in this respect is described in provide a basis for the SNAO’s statements. statements on the annual report. more detail in the section entitled Auditor’s responsibility. Senior management’s responsibility • we evaluate the overall presentation, We believe that the audit evidence we In accordance with the requirements in structure and content of the annual report, have obtained is sufficient and appropriate to the Ordinance (2000:605) concerning including the disclosures, and whether provide a basis for the SNAO’s statements. Annual Reports and Budget Documenta- the annual report reproduces the under- tion, instructions, appropriation directions lying transactions and events in a way Senior management’s responsibility and government decisions specific to LFV, that provides a true and fair picture. LFV’s senior management are responsible LFV’s senior management is responsible for ensuring that the use of and accounts for providing an opinion concerning the As part of the audit in accordance with the concerning appropriated funds and revenue internal controls at LFV. RRI, we also plan and implement the audit takes place in accordance with the appli- in order to: cable regulations and the financial terms Auditor’s responsibility • collect sufficient and appropriate audit stated in the appropriation directions and Our responsibility is to express an opinion evidence that the material information government decisions specific to LFV. regarding the annual report, based on our of a financial or non-financial nature audit. We have carried out the audit in submitted in the directors’ report has Auditor’s responsibility accordance with the ISSAI and the RRI. been drawn up with the aim of convey- Our responsibility is to audit LFV’s annual During the planning and implementation of ing, together with the other parts of the report in accordance with the ISSAI and the audit, we took into account those aspects annual report, a true and fair picture of the RRI. As per our auditing standards, we of the internal controls that are relevant the organisation based on the regulations. have to take into account legal and regula- to how LFV draws up its annual report in tory compliance and any effects of material order to provide a true and fair picture. Our • implement necessary procedures regard- digressions from applicable regulations responsibility does not include making a ing other information to ascertain that on the financial parts of the annual report. statement on the effectiveness of LFV’s this is consistent with the other parts of Our responsibility also includes review- internal controls. Our statement regarding the annual report and free from material ing whether the senior management’s senior management’s assessment of the in- errors, based on our knowledge of LFV. administration complies with the appli- ternal controls is based on the procedures we cable regulations and specific decisions. have used in order to audit the annual report Our communication with senior manage- In addition to the regulations and specific and, consequently, they do not have the same ment encompasses matters such as the decisions that have a direct impact on the certainty as an opinion based on an audit. planned scope and focus of the audit and accounts, this also encompasses regula- significant results of the audit, including tions pertaining directly to the use of funds Chief auditor Stefan Andersson made the any significant deficiencies in the internal over which the Riksdag and the Govern- decision in this case. Assignment leader controls that we identify. ment decide1. On the basis of the audit Andreas Andersson submitted a report. performed on the annual report, we submit an opinion concerning LFV’s compliance REPORT ON OTHER with these regulations. Stefan Andersson REQUIREMENTS IN ACCORDANCE WITH LAWS AND OTHER THE SENIOR MANAGE- Andreas Andersson STATUTES MENT’SASSESSMENT OF INTERNAL CONTROLS Copy for information purposes: The senior management’s responsibility for Luftfartsverket, Ministry of Enterprise and adhering to applicable regulations concern- Opinion Innovation, Budget Department of the ing the use of appropriations and revenue. Our audit of the annual report has not Ministry of Finance detected anything that would indicate that senior management have not complied with 1) The Appropriations Ordinance (2011:223), the Fees Opinion Ordinance (1992:191), the Lending and Security Ordinance It is the SNAO’s understanding, based on the Internal Control Ordinance (2007:603) (2011:211), the Supply of Capital Ordinance (2011:210), the Transfer of State Real Estate Ordinance (1996:1190), the our audit of the annual report, that LFV in their assessment of internal controls. Transfer of State Movable Assets Ordinance(1996:1191).

LFV ANNUAL REPORT 2016 59 BOARD OF DIRECTORS

Per Nilsson Ann-Marie Bredberg Olle Sundin Year of birth: 1967. Year of birth: 1963. Year of birth: 1951. Director since: 2014. Employee since: 1986. Director since: 2013. Current position: Director, staff repre- Director-General of LFV. Deputy Director- sentative since: 2010. Directorships: General of Swedish Current position: Chair of LFV Customs. Chair of the ST union LFV Aviation Consulting Previous positions: within Air Traffic Control AB, LFV Holding AB, Chief of Staff at Swedish at LFV/NUAC. NUAC HB and Borealis. Customs, Deputy Directorships: Director Director of LFV and Director of the Tax and of Entry Point North AB Entry Point North AB. Customs Department of and NUAC HB Previous positions: the Ministry of Finance. (employees’ Several senior Education: Economics, representative). positions at Swedavia Linköping University. Education: Air traffic and LFV, including Air- controller. port Director and Head of Division, Head of Operations Arlanda. Education: Air traffic controller, studies at Stockholm University.

Jan Olson Johan Davidson Ann-Christine Hvittfeldt Year of birth: 1950. Year of birth: 1972. Year of birth: 1966. Chair since: 2013. Director since: 2013. Director since: 2016. Directorships: Current position: Current position: Director of Svedab AB, Chief economist at Several directorships, Öresundsbrokonsortiet the Swedish Pharmacy and director of Green AS and Arlandabanan Association. Several Cargo AB. Infrastructure AB. directorships within Previous positions: Previous positions: the central government. Volvo Logistics, Hemtex, Senior management Previous positions: Speedcargo. positions at SAS and SJ. Include political advisor Education: Agneberg Head of business and assistant head of Economics High School, development at SJ coordination in the Bergaskolan Export 2003–2012, CEO 2012. Swedish Prime & Import Int Trade, Education: Economics, Minister’s Office. University of Gothenburg Stockholm University. Education: Studies Transport economy and include economy at material supply. Stockholm University.

Mats Helgesson Eva Andrén Marie Hafström Peter Lennartsson Year of birth: Year of birth: Year of birth: 1944. Year of birth: 1972. 1964. 1964. Deputy chair since: Employee since: 1994. Director since: Director since: 2010. Director, staff repre- 2015. 2013. Directorships: Direc- sentative since: 2010. Current position: Current position: tor of the Swedish Current position: Head of the Vice President of Institute for the Study Air traffic Swedish Air Force. Procurement of Legal History. controller and 1st Previous posi- at at Ericsson, Previous positions: Deputy Chair tions: Director in the senior Several senior of the ST union. Test & Evaluation management positions in the Education: Air traffic FMV, Command- group of the central government controller. ing Officer of F17, business area sector. Positions Chief of Staff Networks. on several central Tactical Air Staff, Previous posi- government boards Head of Aviation tions: Several and commissions of in the Swedish senior positions inquiry. DG of the Air Force. at Ericsson Swedish Coast Guard Education: Study since 1995. 1996–2005. DG and programmes Education: Eco- deputy head of the in the Swedish nomics, Swedish Armed Forc- Armed Forces. Umeå University. es 2005–2008. MBA Uppsala Education: LLB Lund University. University. Trained as a judge Svea Court of Appeal.

60 LFV ANNUAL REPORT 2016 GROUP MANAGEMENT

Olle Sundin Anna Helena Wåhlin Anna Falck Year of birth: 1951. Year of birth: 1962. Year of birth: 1961. Director since: 2013. Head of Production. Director of HR. Director-General of LFV. Employee since: 1982. Employee since: 2012. Directorships: Directorships: Director Directorships: Chair of LFV of LFV Aviation Director of LFV Holding LFV Aviation Consulting Consulting AB. AB, LFV Aviation AB, LFV Holding AB, Previous positions: Consulting AB and Entry NUAC HB and Borealis. Air traffic controller Point North AB. Director of LFV and and supervisor Previous positions: Entry Point North AB. at ATS Arlanda. Several Head of Administration Previous positions: senior positions at LFV. at the Swedish National Several senior Education: Air traffic Police Board, Head of positions at Swedavia controller. Negotiations at SAS, and LFV, Head of Negotiations including Airport and Deputy CEO of Director and Head of Grafiska Företagens Division, Head of Förbund. Operations Arlanda. Education: LLB, Education: Air traffic Uppsala University. controller, studies at Stockholm University.

Ulf Thibblin Elisabeth Lindgren Andria Kemi Year of birth: 1958. Year of birth: 1963. Year of birth: 1977. Technical Director. Director of Business Development Employee since: 2013. Communications. Manager Previous positions: Employee since: 2014. Employee since: 2015. Several senior positions Directorships: Director Previous positions: at Saab and Ericsson, of Svenskt Flyg, Head of business including Director Magelungen AB, Svenska development at Bromma International Business Cykelförbundet, Airport, head or market Development, VP Saltsjöbadens Teater. communication at Business Development Previous positions: Swedavia, head of Region Europe and VP Director of Sales and market communication and Head of Business Marketing at SJ, Director at Arlanda, commercial Development. of Communications at SJ manager at Education: Civil and Lernia, senior posi- Umeå Airport. engineering, theoretical tions at Swedbank. Education: Economics, physics and doctor of Education: Market econ- Umeå University. technology at Linköping omist, IHM, Bachelor of University. philosophy, Linköping University, EMBA, Stockholm School of Economics.

Petra Sernulf Mikael Larsson Maria Wall Petrini Niclas Gustavsson Year of birth: 1963. Year of birth: 1967. Year of birth: 1960. Year of birth: 1966. Chief Legal Counsel Deputy Direc- Sales Director and Director of Business Employed: tor-General and CEO of LFV Aviation Development and 1997–2005 and Finance Director. Consulting AB. International since 2008. Employee since: Employee since: Relations. Previous 1991. 2012. Employee since: positions: Directorships: Directorships: 1988. Period of service Board Director- Chair of Swedish Directorships: in district court. General of LFV Aviation Group. Director of Legal counsel at Holding AB and Previous Svenskt Flyg. the Swedish Prison SAAB Digital Air positions: Previous and Probation Traffic Solutions AB. Head of Production positions: Service. Director of LFV at Nordwaggon AB, Several senior The legal firm Aviation LFV’s Head of Busi- positions at LFV. Glimstedt Consulting AB ness Development Education: 2005–2008. and NUAC HB. and several senior Systems engineer Directorships: Previous positions at airports and commercial pilot. Director of LFV positions: owned by Swedavia. Holding AB. Economist at LFV. Education: Education: LLB, Education: The international eco- Stockholm Economics, nomics programme at University. Örebro University. Linköping University.

LFV ANNUAL REPORT 2016 61 FIVE YEARS AT A GLANCE

FIVE YEARS AT A GLANCE

2016 2015 2014 2013 2012 AIR TRAFFIC (thousands) Number of movements in Swedish airspace: Domestic 152 149 152 149 148 International 270 261 258 255 250 Overflights 304 302 295 290 291 TOTAL 726 712 705 694 689

Number of service units (thousands) 3,402 3,365 3,284 3,208 3,126

Finances (millions of SEK unless otherwise stated) Operating revenue 3,149 3,364 2,580 3,093 3,076 Profit/loss after financial items 14 39 82 95 9 Investments 161 108 119 90 100 Return on equity (%) 1 4 8 10 1 Equity/assets ratio (%) 11 12 14 13 13 Cash and cash equivalents 4,890 4,348 3,942 3,325 2,592 Equity 854 847 827 763 688 Pension liability 7,624 5,192 4,334 4,411 4,027 Balance sheet total 7,624 7,049 5,871 5,800 5,334

STAFF Number of full-time equivalent employees 983 1,012 1,064 1,084 1,118 of which operational air traffic controllers 530 538 582 605 611 of which other staff 453 474 482 479 507 Number of employees 1,143 1,183 1,233 1,280 1,314 of which are women 504 522 543 576 578 of which are men 639 661 690 704 736 Absence due to illness (%) 2,71 3.06 3.01 2.42 2.16

62 LFV ANNUAL REPORT 2016 VIGNETTE

ABBREVIATIONS AND EXPLANATIONS

A6. Alliance in SESAR focusing on ICAO. International Civil Aviation Organization. technological development. a specialized agency of the United Nations.

A and B events. An international system of IATA. International Air Transport Association. categorisation that is based on the event’s impact on aviation safety. NUAC. NUAC is jointly owned by LFV and the Danish company Naviair. NUAC took ANS. Air navigation services. over operation of the control centres in Copenhagen, Malmö and Stockholm in 2012. ANSP. Air navigation service provider. ODESTA. ODESTA (Optimal Design of Terminal ATCC. Air traffic control centre. Airspace) is a four-year project with a logistical approach that involves the optimisation of ATM. Air traffic management. routes and sectors in the Stockholm area.

BOREALIS. The Borealis Alliance is an RP. Reference period. The EU sets up goals association consisting of air navigation service for air navigation service providers during a providers in nine European countries: Ireland, reference period. the United Kingdom, Iceland, Denmark, Norway, Sweden, Finland, Estonia and Latvia. RPAS. Remotely piloted aircraft systems. Operational concepts for cooperation. Unmanned aircraft, also known as drones.

CANSO. International organisation for air RTS. Remote tower services, remote air traffic traffic management cooperation. management or remotely operated towers.

CNS. Communication, navigation RTC. Remote Tower Centre. Control centre in and surveillance. Sundsvall for RTS.

COOPANS. Cooperation between ANSPs. SES. Single European Sky. The EU’s aspiration Consists of the ANSPs in Sweden, Denmark, to reduce the number of airspaces in Europe Ireland, Austria and Croatia. Joint that, with a few exceptions, are national. technological development. SESAR. Single European Sky ATM Research. DK-SE FAB. Common Danish-Swedish airspace. Joint European programme to increase the LFV and Denmark’s Naviair run common air capacity of airspace while maintaining safety, navigation services in this airspace through the reducing the environmental impact of aviation jointly owned company NUAC. and halving the cost of air traffic services.

EASA. European Aviation Safety Agency. SESAR Deployment Alliance. Industry group for reforming EN ROUTE. Flying on a section European aviation. between airports. Traffic controlled from a control centre.

FAB stands for functional airspace block. Danish-Swedish airspace is an FAB.

GAL. Global Aerospace Logistics, United Arab Emirates, provider of professional aerospace services.

LFV ANNUAL REPORT 2016 63 VIGNETTE

601 79 Norrköping Visiting address headquarters: Hospitalsgatan 30, Norrköping Organisation registration number: 202100-0795 Telephone: +46 11-19 20 00 • fax +46 11-19 25 75 e-mail: [email protected] • www.lfv.se

Thanks to everyone who has contributed to LFV’s annual report. Graphic design and production: Sthlm Kommunikation & IR AB. Photographer: Bosse Håkansson, Lasse Modin, Sara Arnald, Per Fröberg, Emma Elofsson-Holmgren, iStockphoto. The pictures are from Gothenburg Landvetter Airport, Stockholm Arlanda Airport, Remote Tower Centre in Sundsvall, Luleå Airport, ATCC Stockholm. Printing: DanagårdLiTHO 2017.

64 LFV ANNUAL REPORT 2016