Appendix of Selected Air Navigation Service Providers This appendix contains information a focus of this study is the critical role on the primary air navigation service that scheduled airlines will play in the providers (ANSPs) for the 60 countries definition, financing, and success of air selected by Air Traffic Infrastructure traffic infrastructure programs, the chart Global Markets 2012, presenting infor- presents scheduled airline origination mation tied to improvement, support, and destination (O&D) traffic within the operation, and financing of communica- ANSP’s territory for those years. This tions, navigation and surveillance (CNS) (O&D) traffic generally has the greatest services, and air traffic management interaction with air navigation services (ATM) capabilities through 2021. and the greatest demand for the infra- structure supporting those services. Each ANSP summary identifies the nation (or state, in the parlance of the International Civil Aviation Organiza- NEXA Assessment tion) served by the ANSP, the govern- Each assessment begins with NEXA’s ment agency to which it reports (where rationale for the ANSP’s inclusion in this appropriate) and the name of the ANSP study; it is paired with a chart depicting (preceded in some cases by the name six fundamentals underlying that ratio- of the agency in which it resides). Each nale. The six are: ownership and control, includes a map of the airspace served the source of revenue, the transparency by the ANSP, along with its neighboring of its business practices, the current flight information regions, and a chart state of its infrastructure, the rating of air traffic for 2006 and 2011. Since of its (or its “owner’s”) credit risk, and the projected annual air traffic growth (for the region in which the ANSP op- erates combined, where available, with forecasts for its host country). Each fundamental is depicted with a color representing whether conditions are a constraint to ATI opportunities (red), are unlikely to foster opportunities (yellow) or are favorable to them (green). Two of the six fundamentals, credit ratings and forecast growth of air traf- fic, address discrete conditions. They are shown in separate areas. Each of the other four is shown on a continuum from constrained to favorable. A • 317 • NEXA • ATI Global Markets Credit Risk specific political, financial, and market For the Credit Risk assessment we draw influences on those bodies and the role (or lack thereof) of the ANSP’s custom- on Fitch Ratings, Moody’s Corporation, ers and stakeholders in decision-making, and Standard & Poor’s. Each stresses particularly as it relates to selection and that the ratings it assigns are subjective financing of air traffic infrastructure and opinions, but they are widely accepted service upgrades. An ANSP that operates as measures of an entity’s ability to ser- according to general business practices vice or repay debt: the entity presents and free of political influence is consid- a good credit risk (AAA through BBB- ered most favorable to opportunities; for Fitch and S&P, Aaa through Baa3 one that operates as a government bu- for Moody’s), a speculative one (BB+ reaucracy vulnerable to direct political in- through B- and Ba1 through B3, respec- fluence is considered most constrained. tively) or a poor risk (CCC+ or Caa1 or lower). For our purposes, those ratings constitute clear distinctions reflected by Revenue Sources the appropriate colors. We examined whether the ANSP’s rev- enue comes directly from payments by Growth customers for the services provided or For Growth, an annual air traffic in- from its government’s general treasury, crease of four to six percent is the aver- whether revenue is dedicated by law age of the world’s commercial air trans- or regulation to the sustainment and port industry for the last 30 or so years, improvement of air navigation services a figure agreed to by both Airbus and or is fed into the general treasury for Boeing. We consider forecast per-an- redistribution at the discretion of others num growth below that range to con- outside the ANSP and its stakeholder strain opportunities for an ANSP, while community. We also reviewed how the growth above it should foster invest- ANSP manages its use of revenue. An ment. NEXA’s assessment of growth also ANSP with a dedicated source of funding considers the level of overflight activity based on its actual costs of providing that an ANSP handles and how that may services and designated for provision change over the forecast period. and improvement of those services in accordance with general business Assessments of the remaining five fun- practices is considered most favorable damentals represent the collective opin- to future ATI opportunities. One whose ion of NEXA’s team, given the following revenue is considered a source for ex- considerations. penditures outside the ANSP based on individual or political decisions is consid- ered most constrained. Ownership and Control This is based on our research of the orga- nizational and legal structure of the ANSP Transparency and any organizations, governments or This concerns the ease with which the otherwise, that may control or influence ANSP’s investors and customers can its strategic and day-to-day decisions, as participate in or review its strategic deci- well as their past performance. Consider- sions, budget transactions, acquisitions, ations in this regard include general and A • 318 • NEXA • ATI Global Markets and operational performance. Consider- In addition to this assessment, the ations include the findings of the World summary includes basic information on Economic Forum’s annual Global En- the operation, staffing, activities, and abling Trade Report (which discusses ob- equipment of the ANSP, identifies the stacles to trade country by country), the top five airlines that serve its territory Travel and Tourism Competitiveness Re- and provides contact information for key port (which reviews factors and policies ANSP personnel and the embassies of that affect development of travel and the home country and the US. tourism within a country), and reviews by the World Bank, the International Monetary Fund, and other international and regional bodies. An ANSP that reg- ularly issues financial and performance reports and undergoes public reviews (including comments from customers and stakeholders by an independent oversight body or legislature) is consid- ered as favorable to opportunity. One that does not issue such reports, pub- licly discuss plans for charge increases and strategic actions, or subject itself to review beyond a closed group of select officials is considered most constrained. Opportunities for ATI Development This is based on NEXA’s assessment of the ANSP’s CNS/ATM infrastructure, includ- ing the number, age, coverage, perfor- mance, and maintenance requirements of equipment like radar, navigation aids and increasingly, advanced avionics of the fleets within the direct authority of the ANSP. An ANSP with little or no sur- veillance or navaid infrastructure or ob- solescent systems is considered most favorable for opportunities; one that has recently upgraded its CNS/ATM capabil- ities is considered most constrained for the earlier portion of our forecast peri- od. (A recent upgrade may present op- portunities later in the forecast period depending on the procurement cycle of the ANSP involved and the service life of equipment and systems upgraded.) A • 319 • NEXA • ATI Global Markets Islamic Republic of Afghanistan Ministry of Transport and Civil Aviation Authority ■ NEXA ASSESSMENT Civil aviation is a key component of the overall efforts for reconstruction and rehabilitation of Afghanistan. Decades of war have significantly impacted the state of ATI in the country. Critical infrastructure was neglected, destroyed, forfeited or seized, leaving little foundation to support civil air transportation. The Afghan Ministry of Civil Aviation and Transport, MoCAT, along with international assistance from a consortium of organizations, is working to reestablish Afghan control of civil aviation functions and facilitate reconstruction efforts. This Civil Aviation Working Group, CAWG, will serve as the sole, top-level coordinating body to strategically guide reconstruction efforts using a collaborative framework, ensuring representation of all stakeholders, to allow independent and simultaneous contribution to reconstruction projects. Opportunities in Afghanistan’s ATI market are pervasive. A key axiom of Afghanistan’s civil aviation future is the gradual transfer of operational control and regulation from coalition forces, creating a plethora of opportunities. The Civil Aviation Master Plan outlines principles that are essential to reconstructing Afghanistan’s civil aviation system. Each of these principle categories – institution building, technical training, civil aviation operations, and infrastructure – all in beginning stages, will require outside suppliers and expertise for building internationally compliant and regulated civil airspace with operationally scalable capacity for handling long-term growth. Kabul International Airport is a focal point of rehabilitation efforts, with multiple projects planned or underway to aid in building airport capacity and the requisite skills of Afghan employees through transfer of knowledge from organizations currently operating the ATC systems. Rebuilding Afghanistan’s ATI will require long-term commitments from outside organizations with the necessary capital to build infrastructure