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1.4  Study Rationale  

The study was conducted to assess the program’s relevance, success and whether there are alternative, more cost-effective ways of delivering the program in order to provide input for future decision-making.  The study was also conducted to fulfil requirements of Treasury Board Secretariat’s Policy on Transfer Payments for renewal of the contribution program.

1.5 Evaluation Issues  

The evaluation study assessed the following questions to determine the program’s relevance, success and cost-effectiveness:  

1.6 Methodology and Data Sources 

The evaluation team developed an evaluation strategy and selected methods for collecting the data needed to address the above evaluation questions. 

Document/Program File/Website Review 

The first step involved a review of the following relevant documents and program files.  

•       Agreement on the Joint Financing of Certain Air Navigation Services in Iceland;

•       Agreement on the Joint Financing of Certain Air Navigation Services in Greenland (Denmark);

•       ICAO documents, including working papers, study group reports and yearly spreadsheet on the settlement of obligations with Denmark and Iceland;

•       Relevant program files from International Aviation and Technical Programs Branch; and

•       ICAO, TC, and Aviation Safety Network websites.

Interviews 

The interview method was chosen as the second step to address any information gaps as well as to obtain a more contextualized understanding of the issues involved.  An open‑ended, semi‑structured interview format was used for all of the interviews as follows:

•       TC’s International Civil Aviation and Technical Programs Branch Staff; and 

•       ICAO’s Joint Financing Section officials.

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2.0 PROGRAM RELEVANCE 

1)      Is the program relevant to and aligned with TC’s strategic objectives and priorities?

Finding: The program’s rationale and objectives align with the department’s strategic objective of ensuring high standards for a safe and secure transportation system and are consistent with the Department’s commitment to act in accordance with Canada’s foreign policy objectives. 

Through the Agreements, TC participates in the implementation of an international cooperative arrangement providing certain air navigation services.  These services are necessary for maintaining the flight safety of aircraft crossing the North Atlantic.  Through the program, TC contributes to ensuring that funds are available on a timely basis for the provision of air navigation services necessary for the flight safety of Canadian civil aircraft flying across the North Atlantic.  As such, the program’s rationale is well aligned with TC’s strategic objective of ensuring high standards for a safe and secure transportation system. 

As well, the program’s objective of ensuring that the Government of Canada fulfils its international obligations is consistent with TC’s commitment to act in accordance with Canada’s foreign policy objectives.  This commitment is borne out of the understanding outlined in Straight Ahead: A Vision of Transportation in Canada that, “given Canada’s trade oriented economy, TC must take into account and adapt to factors outside its boundaries”.  The program’s objective therefore aligns with the Department’s commitment to supporting Canada’s foreign policy objectives.  

2)      Is the program consistent with federal government’s objectives and priorities? 

Finding: The program’s rationale and objectives align with the Federal Government’s priorities with respect to Canada’s internationalism. 

The program’s rationale and objectives are also consistent with the federal government’s current priorities, as outlined in the most recent Speech from the Throne delivered on October 5, 2004.  The Speech stated that Canada’s “internationalism [was] a real advantage” and underscored the importance of “[expressing] it if [Canada is] to effectively assert [its] interests and project [its] values in a changing world”.  Also highlighted in the Speech was the “need [for] international institutions that work” to achieve this goal.   

Canada has historically been a strong supporter of ICAO in its efforts to develop the principles and techniques of international air navigation and to foster the planning and development of international air transport.  In fact, Canada was instrumental in the formation of the agency during the Chicago Convention of 1944, when it played a key role in overcoming the so-called ‘U.S.-U.K. stalemate’ that was threatening to stymie the enterprise by initiating the tripartite meetings involving the three governments[9].  Over the years, ICAO has been instrumental in meeting a number of challenges facing international civil aviation, including filling the gaps in the global air navigation infrastructure, anticipating and managing the enormous change from propeller-driven aircraft to jet engine aircraft, the need to ensure passenger and aircraft security, transportation of dangerous goods, and the need to reduce aircraft noise and aircraft emissions.  

Today, international civil aviation is facing several new major challenges.  As outlined in ICAO’s strategic action plan, there is a great need for ICAO to adapt to rapidly changing circumstances such as the transnationalization of markets and operations, emergence of regional and sub-regional regulatory blocks, commercialization of government service providers, emergence of new technology, response to environmental concerns, and the physical limits of infrastructure capacity.  As a heavily trading nation, Canada is also facing many of the same challenges.  

As such, ICAO is a forum where Canada can put into effect its internationalist approach, working with other nations in the consideration of numerous issues affecting international civil aviation, as well as advance its various policy objectives delineated in Straight Ahead, including “the promotion of a co-operative approach to international harmonization of safety and security standards”, and its efforts to encourage a shift in emphasis from “prescriptive regulation to a comprehensive, performance-based approach to safety” as part of TC’s Smart Regulation initiative. 

It is clear to the evaluators that TC’s participation in the Agreements not only ensures that the Government of Canada fulfills its international obligations but also demonstrates Canada’s commitment to strengthen international institutions through effective engagement. 

3)      Is the program aligned with TC’s Civil Aviation Directorate’s mandate? 

Finding: The program’s rationale and objectives are consistent with the mandate and the operating principles of the Civil Aviation Directorate. 

A 2003 Civil Aviation Directorate memorandum stated that there were no longer any major linkages of the program to civil aviation, given that the Government of Canada’s payments are primarily directed towards meteorological services non-allocable to users within the civil aviation sector [10].  Accordingly, the memorandum raised the issue of whether the responsibility for managing DEN/ICE contributions should remain within the Civil Aviation Directorate.  The evaluators examined the arguments put forward in the memorandum and concluded that the rationale and the objectives of the program were consistent with the mandate and the operating principles of the Civil Aviation Directorate.   

The Civil Aviation Directorate memorandum recommended that: 

•       Transport Canada’s Finance and Administration (F&A) Directorate / Corporate Services Group consider accepting the responsibility for the management of the DEN/ICE contributions, beginning in 2004/05; and

•       F&A Directorate enter into discussions with the Meteorological Service of Canada / Environment Canada to encourage the latter to take over the responsibility for DEN/ICE contributions on or before the beginning of 2010/11, when Canada’s credits are likely to have been fully expended.   

Despite the fact that the Government of Canada’s payments primarily fund meteorological services non-allocable to users within the civil aviation sector, the evaluators hold that there are several arguments militating against the course of action recommended in the memorandum:  

•       The contribution program is not well aligned with the mandate of F&A Directorate/ Corporate Services Group.  The F&A Directorate’s mission is to provide services, expertise and advice in the areas of finance and administration that support the achievement of TC’s goals.  The responsibility of managing the file falls outside the general support role of the F&A Directorate.  Moreover, management of this program would conflict with the activities of F&A Directorate relating to the provision of assessments, and corporate oversight and control. 

•       The primary outcome achieved by the program relates to civil aviation safety.  This outcome does not align with any of Environment Canada’s three primary strategic objectives, which consist of:  protecting Canadians and their environment from domestic and global sources of pollution; conserving biodiversity in healthy ecosystems; and, helping Canadians adapt to their environment in ways that safeguard their health and safety, optimize economic activity and enhance environmental quality.

•       ICAO coordinates the Agreements, situating the program within the context of the civil aviation sector.  In addition, all Contracting States manage their respective files related to the Agreements either through their transportation ministries or their civil aviation authorities.  None of the Contracting States presently confer the responsibility for administering the DEN/ICE contributions to their ministries of environment. 

In addition, there are several arguments for maintaining the status quo. 

•       The Civil Aviation Directorate’s mandate is encapsulated in their mantra: “We are here for aviation safety”[11].  The Agreements, and the role played by the Contracting States with regards to the Agreements, are key to providing stability in servicing the North Atlantic corridor.  The air traffic, communications and meteorological services provided are necessary in ensuring flight safety of Canadian Civil aircraft using this corridor.  Therefore, the program aligns with the mandate of the Civil Aviation Directorate.

•       As well, one of Civil Aviation Directorate’s primary operating principles is the “promotion of a shared commitment to enhancing aviation safety … internationally”.  By participating in the DEN/ICE Agreements, Transport Canada demonstrates that it is committed to remain proactively involved with joint international civil aviation mechanisms regarding flight safety of its civil aircraft.  This commitment aligns with Civil Aviation’s stated desire to enhance aviation safety through international cooperation. 

•       The 2003 memorandum had argued that TC’s contribution program was not well aligned with the International Aviation and Technical Programs Branch’s mandate regarding the development of technical standards and practices.  However, the mandate of the Branch also includes the provision of support for international civil aviation matters.  For example, the Branch has the responsibility of coordinating other international aviation agreements such as the North American Aviation Trilateral (NAAT), and bilateral/trilateral liaison requirements of special nature.  The outcomes achieved by TC’s contribution program for the Agreements clearly situate it in the area of international aviation. 

Taking into account the arguments above, the evaluators concluded that the rationale and the objectives of the program continue to be aligned with the overall mandate of the Civil Aviation Directorate, as well as the mandate of its International Aviation and Technical Programs Branch.   

4)      Is there a legitimate and necessary role for government in this area? 

Finding:  There is a legitimate and necessary role for all Contracting States in ensuring that funds are available on a timely basis to operate and maintain the required services. 

Were the Government of Canada no longer a participant in the Agreements, Canadian civil aircraft crossing the North Atlantic would still be using the air navigation services provided by Denmark and Iceland.  As well, under the Agreements, there is no difference between the fees paid by aircraft belonging to Contracting Governments and the fees paid by aircraft belonging to non-adherent states such as Austria, India or Czech Republic:  a single flat user fee is charged to all civil aircraft flying across the North Atlantic.  Finally, as previously noted, 90 percent of the costs involved are now recovered directly from the users of the services.  Given these facts, it is reasonable to raise the issue of whether there remains a meaningful role to play by Contracting States - and ICAO - in the provision of air navigation services in the North Atlantic.  Under such a scenario, the costs of the services provided by Denmark and Iceland would no longer be subject to the rigorous process of verification and approval currently performed by ICAO on behalf of Contracting States (see ‘Process’ in section 1.2.1), likely resulting in higher user charges. 

According to officials from ICAO’s Joint Financing Section, the Agreements represent a mechanism to manage risk with respect to the provision of air navigation services in the world’s most heavily traveled trans-oceanic route.  The Agreements are designed for Contracting States to help the Provider States cope with the fluctuations of the marketplace in delivering air navigation services.  The importance of this may not be readily apparent, as most Contracting States, including the Government of Canada, currently find themselves in a credit position following the readjustment of charges that occurred in 2001.  However, as indicated by ICAO’s Joint Financing Section officials when interviewed, in any future under-recovery situation, parties to the Agreements may be asked to cover the ensuing shortfalls.  Additionally, the Agreements constitute a safeguard against prospective “exceptional circumstances” e.g. a drastic and sustained reduction in traffic levels. In case of any such unforeseen event, Contracting States would be requested by ICAO to provide temporary funding in support of the provision of air navigation services.  Overall, the system of prepayments, advances and subsequent adjustments prevents cash flows from being delayed, ensuring the work of the two Provider States are not hindered.  Therefore, Contracting States continue to have a role with respect to the primary purpose of the Agreements, which is to ensure that funds are available on a timely basis to operate and maintain the required services.  As such, evaluators conclude that there is a legitimate role for the Contracting States, including the Government of Canada, in this area.

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3.0 SUCCESS AND IMPACT OF THE PROGRAM  

5)      Are all the services indicated in the Agreement provided in a satisfactory manner?    Do Canadian airlines use the services? 

Finding:  Denmark and Iceland provide air traffic services, meteorological services,  aeronautical/meteorological telecommunication services, and radio navigation aids.  All services as specified in the Agreements are provided by Denmark and Iceland in a satisfactory manner.  Canadian airlines are one of the most extensive users of the North Atlantic corridor and therefore, they benefit from the services provided by Denmark and Iceland. 

Denmark and Iceland each provide the following services: 

•       Air Traffic services:  Air traffic services comprise air traffic control service, flight information service and alerting service.  The main facilities for providing air traffic services in the North Atlantic corridor are the area control centre in Reykjavik, Iceland and the flight information centre at Sondre Stromfjord, Greenland. 

•       Meteorological services:  Meteorological services include meteorological observations (e.g. surface and upper-air synoptic observations), reports, forecasts, and briefing and flight documentation completed at meteorological stations specified in the Agreements.  Under the Icelandic agreement, other services provided by the meteorological offices include the provision of routine aerodrome forecasts, area meteorological watch, and the issuance of SIGMET[12] information.

•       Aeronautical and Meteorological Telecommunication services:  Telecommunication services include the collection and reception of meteorological reports from jointly financed synoptic stations, reception of meteorological messages, aeronautical fixed telecommunication services for transmission of aeronautical and meteorological messages, aeronautical mobile service with aircraft on high frequency (HF) and very high frequency (VHF) extended range, landline teletypewriter services, microwave link and communications, telephone services, telegraph and data services, and remote keying services.

•       Radio navigation aids:  Radio navigation aids are located at various locations as specified under the Agreements to provide en-route navigation services on a continuous basis. 

Each year, the Secretary General of ICAO submits Summary Reports on the Operation and Utilization of the Services by Denmark and Iceland to current and prospective Contracting States of the Agreements.  These summary reports rate the provision and availability of services for North Atlantic flights.

From 1999 to 2003, the availability of various air navigation services provided by Denmark were as follows: 

•       Air traffic services to international flights operating within Sondrestrom FIR were provided without any operational interruption during the five-year period;

•       Meteorological services were also provided in a satisfactory manner throughout the five-year period;

•       In general, the communications services operated satisfactorily during the five-year period with the exception of the extended range of VHF services at Prins Christian Sund and Frederiksdal.  These services were inoperative for approximately 53 hours in 2000, 10 hours in 2001, 578 hours in 2002, and 178 hours in 2003.  The disruptions were mainly due to bad weather and/or technical problems;

•       The non-directional radio beacons performed satisfactorily overall with the exception of the beacon at Prins Christian Sund, which was inoperative for approximately 25 hours in 2000 due to weather conditions.  The beacons at Myggenanes and Akraberg, were out of service for approximately 38 hours due to maintenance in 2001.  The beacon at Prins Christian Sund was inoperative for approximately 719 hours in 2002 due to weather conditions and technical problems; and the beacons at Myggenaes and Akraberg were of service for approximately 3 hours in 2002 due to maintenance. 

Although there were some service disruptions with regards to some communication services and radio navigation aids during the five-year period, the Secretary General of ICAO found that all services as specified in the Danish Agreement were provided in a satisfactory manner. 

From 1999 to 2003, the availability of various air navigation services provided by Iceland were as follows:

•       Air traffic control services to international flights operating within Reykjavik control area were provided without any operational interruption during the five-year period;

•       Meteorological services were also provided in a satisfactory manner throughout the five-year period;

•       No major disruptions were reported in the delivery of various communications services.  Since 1999, the number of air/ground contacts on HF and VHF communications has steadily declined; 

Overall, the Secretary General of ICAO found that all services as specified in the Icelandic Agreement were provided by Iceland in a satisfactory manner for five-year period.

Canadian airlines crossed the North Atlantic corridor an average of 21593 times between 1999 and 2003.  As shown in Figure 1, the highest number of crossings occurred in 2000.  The number of crossings has declined slightly in recent years. 

Table 5 displays the top five countries that have airlines flying across the North Atlantic corridor.  Canada is shown to be one of the top four users of the air navigation services provided by Denmark and Iceland.

As Canadian airlines are one of the most extensive users of the North Atlantic corridor, they benefit from the satisfactory air navigation services provided by Denmark and Iceland under the Agreements. 

6)      Do the services contribute to flight safety for civil aircraft? 

Finding: Despite the limitation of available data, the Civil Aviation Administrations of Denmark and Iceland are in accordance with ICAO aviation safety standards, which suggests that the services they provide contribute to flight safety for civil aircraft. 

As defined in ICAO’s International Standards and Recommended Practices, these services contribute to the safety of international air navigation. 

•       Air traffic services aim to prevent collisions between aircraft; prevent collisions between aircraft on a manoeuvring area and obstructions on that area; expedite and maintain an orderly flow of air traffic; provide advice and information useful for the safe and efficient conduct of flights; and notify and assist appropriate organizations regarding aircraft in need of search and rescue aid.

•       Meteorological services involve the supplying of necessary meteorological information to aid operators, flight crewmembers, air traffic service units, search and rescue services units, and airport managements in the performance of their respective functions.  For aircraft flying across the North Atlantic corridor, the provision of weather phenomena information can assist their safe operation and navigation through the region.

•       Aeronautical and meteorological telecommunication services comprise communication services and application entities in support of the delivery of air traffic and meteorological services to aircraft between airborne systems and ground systems or multiple ground systems.

•       Radio navigation aids such as non-directional radio beacons work in conjunction with direction‑finding equipment in the aircraft to fulfil the operational requirement of a radio aid to navigation.  In this way, pilots can determine the aircraft’s bearings relative to a station and facilitate a safer approach and landing. 

The evaluators experienced great difficulty in obtaining quantitative data to demonstrate a connection between the provision of certain air navigation services by Denmark and Iceland and level of flight safety in the North Atlantic region.  According to the Aviation Safety Network (ASN) Database[13], 15 flight accidents/incidents have occurred in Greenland since 1945 and 12 flight accidents/incidents have occurred in Iceland since 1957.  Unfortunately, these events may or may not be attributed to the provision of services by Denmark and Iceland.  Several other factors could have contributed to the various accidents/incidents, such as pilot error or technical difficulties with the aircraft.  Furthermore, the ASN database consists only of reported accidents/incidents due to aircraft damage and/or the occurrence of fatalities.  It does not include occurrences where an unsafe situation was avoided. 

However, ICAO does assess and monitor international air safety through the ICAO Universal Safety Oversight Audit Program.  The Civil Aviation Administration of Denmark and the Icelandic Civil Aviation Administration were audited in 1999 and 2000.  The audits were carried out with the objective of ascertaining the safety oversight capability of the civil aviation administrations and to ensure their operations were in conformity with ICAO Standards and Recommended Practices as contained in Annexes, guidance material, and relevant safety-related practices in general use in the aviation industry.  A limitation of these audits is that there was no specific investigation into the level of safety yielded by air navigation services[14].  However, the ICAO safety audit oversight team found that the structures of the civil aviation administrations for both Denmark and Iceland provided an effective civil aviation system to support its safety oversight obligations and responsibilities.  Since both civil aviation administrations were found to be in accordance with ICAO aviation safety standards, the results of the audit suggest that Denmark and Iceland do uphold their responsibilities with respect to flight safety. 

Despite the limitation of available data, the Civil Aviation Administrations of Denmark and Iceland are in accordance with ICAO aviation safety standards, which suggests that the services they provide contribute to flight safety for civil aircraft. 

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4.0 COST-EFFECTIVENESS OF THE PROGRAM 

7)      Is the program the most cost-effective means of achieving the intended objectives? 

Finding: The program is the most cost-effective means of achieving the intended objectives since the joint financing concept provides for economies of scale in the provision of services in the North Atlantic. 

The Agreements enable the provision of the required air navigation services for all civil aircraft – including Canadian aircraft - crossing the North Atlantic to enhance their flight safety.   These services are provided to Canadian aircraft without the Government of Canada, or a private provider such as NAV CANADA, having to bear the full cost of building, maintaining and operating similar facilities necessary to provide such services.  Cost-effectiveness is achieved through the joint financing concept, as the facilities and costs involved in providing a given service are beyond the needs of a single state, such as Canada.  In 2004, the estimated cost of the services covered by the Agreements was US$29.2 million (US$5.8 million for Denmark and US$23.4 million for Iceland).

The gains achieved through cost sharing are then translated into lower charges for the users of the services provided, namely the aircraft operators.  This is important for full service carriers such as Air Canada that use the North Atlantic corridor extensively, since lower user charges mean lower operating costs.  According to International Air Transport Association (IATA) figures, such charges alone account for approximately 10 percent of airline operating costs of IATA scheduled international operations.    

In terms of value, the user fees charged by Denmark and Iceland appear to be consistent with, if not lower than, similar fees charged by other air navigation services providers.  Evaluators note that any comparisons between user fees charged by different entities providing similar services in other geographic areas should be undertaken with considerable caution, as the principles and the methodologies for determining such fees may vary appreciably amongst various service providers.  For example, under the Agreements, a movement-based, single flat user fee is charged to all civil aircraft flying across the North Atlantic.  Elsewhere, user fees may be determined according to different criteria, such as the weight of the aircraft.  Nevertheless, some limited comparisons can be made. 

In 2004, the fee for a full crossing over the North Atlantic charged by Denmark and Iceland was nearly $130 Can (£56.74[15]).  By comparison, an aircraft flying between Canada and Europe would also typically pay for a NAV CANADA Oceanic Charge, which includes a flat fee for North Atlantic Enroute Facilities and Services (NAT)[16], and, frequently, an International Communications Charge for the provision of air-ground radio frequencies and certain other communication links.  In 2004, the combined NAV CANADA charge per flight for providing these services equalled roughly $150 Can.  Thus, the fee charged by NAV CANADA for similar services to an identical aircraft flying between Europe and Canada is slightly higher than the fee charged by Denmark and Iceland collectively.   

In addition, under the Agreements, user charges have remained relatively constant (see Figure 3) while the overall air navigation charges around the world have increased 7.5 percent annually since 1992[17].  In Canada, the flat fee charged by NAV CANADA as part of Oceanic Charges has increased 15 percent since March 1, 1999, when it began implementing full cost recovery [18](see Figure 2). 

In light of the above, the fees charged by Denmark and Iceland appear to represent good value for the users of the services provided.  

It should also be noted that, notwithstanding foreign policy purposes served by, and cost effective services resulting from the Agreements, should the Government of Canada wish to withdraw, it would cost TC approximately $US 1 million[19].  The evaluators confirmed that, in accordance with Articles XXII and XXIV, paragraph 2 of the Agreements, any Government withdrawing from the Agreements would have to pay Denmark and Iceland, through ICAO, its share of the residual value of the capital expenditures.  At present, the Government of Canada’s portion of residual value amounts to roughly $US 1 million, or 6.7% of the total residual value.

As previously stated, Canada’s relationship with ICAO should be viewed in the larger context of the Government’s objective of taking advantage of Canada’s internationalism, which necessitates an effective engagement in international institutions.  Accordingly, the evaluators conclude that Canada’s commitment to ICAO entails participation in joint financing arrangements such as the Agreements, and that, from a cost perspective, this type of arrangement represents the most sensible approach to mounting costly international civil aviation projects, as it distributes the financial burden amongst the participants by reducing their share of capital requirements and operational and maintenance costs.   

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 5.0 ANNEXES

ANNEX 1 

Allocation of Meteorological Costs under the Agreements 

Given that TC’s contributions are primarily directed to fund meteorological services that are non‑allocable to users in the civil aviation sector, it is important to provide background information on the evolution of the Agreements with regards to allocation of meteorological costs.  

Under the DEN/ICE Agreements, meteorological services provided refer to the following:  

Meteorological (MET) Services

ICELAND

DENMARK

Under the Agreements MET/COM services are also taken into consideration when calculating meteorological costs allocable to civil aviation

 Meteorological Telecommunication Services (MET/COM)

ICELAND

DENMARK

 In 1997, the ICAO Council requested that the Committee on the Joint Support of Air Navigation establish a study group to undertake a fact-finding study on the utilization of meteorological services by aviation and non-aviation users to complement the information already provided by Denmark and Iceland.  In 1998, the Study Group on Allocation of Meteorological Costs (the “Study Group”) was established.   

At the time when the Study Group was convened, 60 percent of meteorological costs were allocated to civil aviation.  However, the trend has been for more of the meteorological costs to be covered by civil aviation users.  The primary guidance document used in the deliberations of the Study Group was the Manual on Air Navigation Services Economics (“the Manual”).  The version that was used (ICAO Doc 9161/3) had incorporated the recently completed work of the Air Navigation Services Economics Panel (ANSEP).  It was generally agreed that the guidelines established by ANSEP allowed for an increase in the percentage of meteorological costs that could be allocated to civil aviation.  At the same time, the Manual stipulated that considerable caution should be exercised when determining the costs allocable to civil aviation since no single user requirement determines the level and cost of core activities. 

The following are a summary of the main items of the report[20] prepared by the Study Group: 

      The users’ position was that the observations being conducted by Iceland and Denmark were undoubtedly essential during the era prior to the jet age, but that there was no longer an aeronautical requirement for the surface and upper-air observations provided under Agreements to support current aircraft operations in the North Atlantic Region. 

•       However, experts from World Area Forecast Center (WAFC)/London and WAFC/Washington clearly demonstrated to the Study Group that all meteorological observations (including surface and upper-air observations) played an important role in the numerical weather prediction used to generate products from WAFCs.  Therefore, aviation had an indirect requirement, through WAFC use, for all the observations provided by Greenland, Iceland, the Faroes and surrounding sea areas.  The Study Group was also reminded that the Limited North Atlantic Regional Air Navigation meeting held in Portugal in 1992 had confirmed the continued requirement for the Danish and Icelandic stations.

•       According to IATA, the airlines already contributed to the provision of upper-air data through the air reporting, and the meteorology community at large benefit from these data for which airlines do not ask to be paid.  However, the Study Group noted that aircraft observations and reports were an aeronautical requirement by the air traffic control and ICAO World Area Forecasting System and were to be reported anyway.  Moreover, aircraft reports could presently not substitute for the upper-air and surface observations, due to their concentration over a small range of altitudes and to the lack of humidity information.

•       The Study Group concluded that the arguments presented supported an increase of meteorological costs allocable to civil aviation up to 100 percent.  In addition, the Study Group noted that, guidelines recently established by ANSEP allowed for 100 percent of meteorological costs to be allocated to civil aviation.  However, taking into account both the lack of tools to determine exactly the percentage use of the observations between aeronautical and non-aeronautical users, and the need to find a viable methodology that would be equitable to all concerned, the Group concluded that a cost recovery of 90 percent would be reasonable.  

On the basis of the conclusions reached by the Study Group, the Joint Support Committee recommended that the ICAO Council increase the meteorological costs allocable to civil aviation under the Agreements, from 60 to 90 percent effective January 1, 1999.  The Council subsequently adopted the recommended action during its 155^th session.    

The increase means more of the costs of air navigation services under the Agreements are now recovered directly from the private sector, decreasing the financial burden on the Contracting States.  

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