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Funding of ACSA PASO October, 2008 Central American Agency for Aeronautical Safety.

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Presentation on theme: "Funding of ACSA PASO October, 2008 Central American Agency for Aeronautical Safety."— Presentation transcript:

1 Funding of ACSA PASO October, 2008 Central American Agency for Aeronautical Safety

2 CONTENT General consideration for funding a RSOO COCESNA: Economies of Scale Financing ACSA Budget Distribution The importance of Cooperation Projects

3 GENERAL CONSIDERATIONS FOR FUNDING A RSOO When establishing a RSOO initially there should be an estimate of the costs of maintaining the organization Legal and organizational structure Administrative and office equipment Personnel training Office resources Additional costs

4 Member States must determine the necessary financial resources to start the organization and to effectively maintain it. Contributions from the States Financial aid Cooperation Projects Commercialize services GENERAL CONSIDERATIONS FOR FUNDING A RSOO

5 The amount of financial resources required for organization will depend on the objectives, functions and tasks for which it was created. There are three models of financial sustainability that have in practiced in regional organizations. GENERAL CONSIDERATIONS FOR FUNDING A RSOO

6 EASA European Contributions Certification Fees GENERAL CONSIDERATIONS FOR FUNDING A RSOO

7 JAA National Contributions Income from Publications and Training GENERAL CONSIDERATIONS FOR FUNDING A RSOO

8 ACSA Mother Organization Cooperation Projects GENERAL CONSIDERATIONS FOR FUNDING A RSOO Over Flight Fees

9 COCESNA: ECONOMIES OF SCALE What are economies of scale? Is the result of practices through which a business or organization produces more for a reduced average cost. Distribute fixed costs over an increased number of products

10 COCESNA: ECONOMIES OF SCALE What are the benefits of economies of scale? Reduction of Costs Increased efficiency Costly inputs Sharing of inspectors Specialization Better organizational skills of resources Learning inputs

11 COCESNA: ECONOMIES OF SCALE What are the threats to economies of scale? Cost of communication Duplication of efforts Top-heavy companies “Office Politics” Isolation of decision makers Slow response time Inertia (unwillingness to change) One on one communication channels become costly. Communication will be carried out by groups of employees. Reduced communications Management workforce is too costly. Reduction of productivity. Working managers will minimize the negative impact on productivity. Lack of consequences can lead to poor decisions. Resistance to change

12 COCESNA: ECONOMIES OF SCALE Factors to achieve economies of scale: Share objectives, strategies and activities Maintain highly qualified technical personnel Develop harmonized and standardized regulations and procedures Create multinational teams Communication is vital

13 COCESNA: ECONOMIES OF SCALE BeliceGuatemalaEl SalvadorNicaraguaHonduras Costa Rica Aeronautical Industry Requirements (Chicago Convention) COCESNA BelizeGuatemala El Salvador HondurasNicaraguaCosta Rica

14 COCESNA: ECONOMIES OF SCALE Costa Rica Belize Aeronautical Safety Aeronautical Training GuatemalaEl SalvadorNicaraguaHonduras Air Navigation Costa Rica COCESNA BelizeGuatemala El Salvador HondurasNicaraguaCosta Rica Integrated Regional System of Air Navigation, Aeronautical Safety and Training

15 COCESNA: INCOME SOURCES Article 22 contracting parties agree on: 1) Providing a total amount of US$100,000.00 among the Member States. 2) Acquire or surrender to the Corporation the use of equipment necessary for the development of its functions in each of the Member States. Article 24 contracting parties agree on: 1) The Corporation may obtain loans in the national and international financial markets, as long as these are necessary for achieving its objectives. The contracting parties, when agreed unanimously, shall guarantee in equal proportions any loans which might be contracted by the Corporation. Article 23 contracting parties agree on: 1) The Corporation shall maintain its financial equilibrium with its own resources, with the exception of contributions from the contracting parties cited in Article 22, and loans mentioned in this Article and Article 24. 2) It will establish tariffs and conditions for fees to airspace users, and will impose and collect these fees.

16 COCESNA: INCOME SOURCES CategoryPMD (Kgs) USD I 77,001 or more 0.55 II 50,001 to 77,000 0.36 III 22,001 to 50,000 0.28 IV 5,670 to 22,000 0.0 COCESNASTATES National Air Space Above 19,500 ft. Under 19,500 ft. Oceanic Air Space All space above 3,000 ft. COCESNA: Service ATS in route Central American FIR Approximate Area: 2,639,054 km2

17 COCESNA: INCOME SOURCES COCESNA is an international organization of Central American Integration, a non-profit organization that obtains self-sustainability and development resources through the provision of the following services: Air Navigation Services (ATS/AIS) Aeronautical Telecommunic ations Rental and Maintenance of Equipment Nav Aids Verification and Certification Aeronautical Training Services Aeronautical Safety Services

18 COCESNA: INCOME SOURCES Aeronautical Safety Services Technical Assistance in AGA, AVSEC and ATM Software Products: Regional Aeronautical Information System Technical Assistance in Aeronautical Safety Technical Assistance in Audits Oversight & Certification RegulationsTraining

19 FINANCING ACSA Attaining sustainability has been a goal of the organization as a whole. ACSA has been financed mainly by COCESNA, through a yearly budget. Cooperation Projects Sale of services to other States

20 BUDGET DISTRIBUTION Integrated Regional System of Air Navigation, Aeronautical Safety and Training Central American Agency of Air Navigation (ACNA) Central American Agency of Aeronautical Safety (ACSA) Central American Institute of Aeronautical Training (ICCAE) Supporting Units (Financial, Administrative and Management)

21 Integrated Regional System of Air Navigation, Aeronautical Safety and Training Throughout the years COCESNA has distributed its resources in developing projects, improvement programs and sustainability of the operations, technical and management areas. Operative Investment COCESNA Contribution to Member States COCESNA Contribution to Member States BUDGET DISTRIBUTION

22 Investments & Operations (in %) Base 1999

23 BUDGET POLICIES Budget classified as: Operative Investment COCESNA Investment Member States Budget is programmed monthly according to the tasks and projects established in the Operational Annual Plans.

24 BUDGET POLICIES Budget is presented to the Directive Council and defended for its approval. Monthly follow up of the assignment, execution and availability of the budget. Quarterly the budget is liquidated and decisions are made in regards to the surplus.

25 ACSA’s BUDGET EVOLUTION

26 ACSA’s BUDGET DISTRIBUTION

27 COOPERATION PROJECTS Cooperation Projects have been a pillar for the improvement of the aviation safety in the region and the development and strengthening of the Agency. All projects have had a counter part from COCESNA and a non refundable grant from the donning organization.

28 COOPERATION PROJECTS IDB/COCESNA 2001-2004 Strengthening of the Regulatory and Institutional Framework US$6 million US$1.7 million > COCESNA 1. 1. Strengthen the institutional framework of the safety regional system and help establish a harmonized system 2. 2. Develop a regional information system 3. 3. Modernize the Civil Aviation Authorities

29 IDB PROJECT IN ACSA

30 COOPERATION PROJECTS EU/COCESNA Phase I 2001-2003 Improve Aviation Safety in Central America € 1,798,686 € 443,404 > COCESNA 1. 1. Quality 2. 2. OPS, PEL and AIR Regulations Training 3. 3. Incidents and Accidents

31 COOPERATION PROJECTS EU/COCESNA Continuation Phase 2004-2006 € 1,252,743 € 437,743 > COCESNA 1. 1. Strengthen the regional institutional framework. 2. 2. Develop and implement a regional harmonized regulatory system. 3. 3. Define future safety regional needs.

32 EU PROJECT IN ACSA Phase I Continuation Phase Total European Union € 776.055,00 € 776.055,00 € 650.000,00 € 650.000,00 € 1.426.055,00 € 1.426.055,00 COCESNA € 443.404,00 € 443.404,00 € 437.743,00 € 437.743,00 € 881.147,00 € 881.147,00 AIRBUS € 489.227,00 € 489.227,00 € 165.000,00 € 165.000,00 € 654.227,00 € 654.227,00 TACA € 90.000,00 € 90.000,00 € - € - € 90.000,00 € 90.000,00 Total € 1.798.686,00 € 1.798.686,00 € 1.252.743,00 € 1.252.743,00 € 3.051.429,00 € 3.051.429,00

33 FUTURE FINANCING ALTERNATIVES The objective is to seek the financial sustainability of ACSA Commercialization of services provided by ACSA Technical Assistance Training Oversight activities

34 CONCLUSIONS The economic reality of every region in the world are the limited resources to unlimited requirements.

35 CONCLUSIONS The economic success of a RSOO lays on the commitment of the States to sustain financially the organization, on the disposition established to acquire financial sustainability and on an effective and efficient practice of economies of scale.

36 QUESTIONS?


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