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1
Practical Work and Experience With Performance Management
ICAO Performance Management Symposium
John Crichton, President and CEO
NAV CANADA
March 28, 2007
2
Agenda
Unique, customer driven private company Why NAV CANADA measures performance Some examples of internal performance
measures What we have learned about performance
measurement Some NAV CANADA comments regarding
international performance measures
3
NAV CANADA’S Unique Structure NAV CANADA assumed control of the Canadian
ANS on November 1, 1996. The Company’s creation was driven by its
customers’ need for improved and cost effective ATM services.
The Company is a completely private, non-share equity enterprise, funding both the $1.5 billion purchase and ongoing capital needs through publicly traded debt.
The board of 15 represents all major stakeholders including 5 customer representatives.
4
2006 Marked the 10th Anniversary of NAV CANADA
November 1, 2006 was our 10th anniversary
Company has been aggressive in controlling costs while ensuring the system remains safe and efficient
The impact of our efforts can be seen in these comparisons to our former life
5
Managing Head Count
Year End Head Count
6,300
6,152
5,692
5,266 5,224
5,426 5,466 5,426 5,369
5,302
5,000
5,500
6,000
6,500
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
6
226
203 200210 207
86
114
176
126 123
102114
123 127
77 7890
$0
$50
$100
$150
$200
$250M
illio
ns
Transport Canada
NAV CANADA
Capital Spending FY 1991 to FY 2006
7
A Strong Safety/ Customer Value Focus
As a natural and statutory (ATC) monopoly, ensuring transparency is essential to be accountable to customers.
The Company is fundamentally based on three pillars of value creation for our customers:SafetyCost effectivenessService Quality
These pillars drive the overarching objectives established by our Board of Directors.
8
Overarching ObjectivesMaintaining a safety record in the top decile of the major
ANSPs worldwide.Maintaining customer service charges in the bottom
quartile (lowest charges) of the major ANSPs worldwide. Implementing and maintaining a modern cost-efficient
ANS technology platform in the top quartile of Major ANSPs worldwide.
Ensuring that growth in costs of providing air navigation services do not exceed the growth in charging units, thereby resulting in a decline in customer service charges over the long term.
Creating a productive and fulfilling work environment which places NAV CANADA amongst the best employers in Canada.
9
Overarching Objectives Drive Measurement
Our overarching objectives are the ultimate performance measures.
All our internal measures relate to the overarching objectives.
These objectives focus our performance measurement efforts thereby keeping the number of high level measures manageable.
Having a reasonable number of measures also recognizes the significant resource requirements that can arise.
10
Why Does NAV CANADA Measure Performance?
A score card on how we measure up to our objectives.
To demonstrate value to customers, or lack thereof.
An early warning system to identify deficiencies especially with respect to safety.
A way to rank our Company against ourselves and with other ANSPs around the world.
A tool to identify areas of improvement or best practices
11
Internal Performance Measures Performance measurement occurs
throughout the Company.
Individual managers’ goals are linked back to the Corporate objectives.
High level performance measures focus on customer concerns.
The following examples are high level measures in Safety, Cost Effectiveness and Service Quality, the three pillars.
12
SAFETYIFR to IFR Losses of Separation
Rate per 100K movements IFR/IFR losses of separation
12 Month moving 2000-2006
00.10.20.30.40.50.60.70.80.9
1D
ecem
ber
June
Decem
ber
June
Decem
ber
June
Decem
ber
June
Decem
ber
June
Decem
ber
June
Decem
ber
2000 2001 2002 2003 2004 2005 2006
13
COST EFFECTIVENESS Customer Costs Per Flight Hour
Customer Average Cost Per Flight Hour (1)From Service Charges
Fiscal Year 1999 to 2006
$280
$300
$320
$340
$360
$380
$400
$420
1999 2000 2001 2002 2003 2004 2005 2006
Fiscal Year
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
CP
I
Rev per Flight Hour CPI
6 Months (1) IFR flight hours in Canadian controlled airspace, including oceanic; estimated 1999 to 2003, actual 2004 to 2006
14
COST EFFECTIVENESSFlight Hours Per Employee
Average Flight Hours (1) per EmployeeFiscal Year 2004 to 2006
0
100
200
300
400
500
600
700
2004 2005 2006
Fiscal Year(1) IFR flight hours in Canadian controlled airspace, including oceanic (2) Year over year change
6.5% (2)
3.9% (2)
15
Traffic Is Growing
TRAFFIC GROWTH1999-2006
90
95
100
105
110
115
1999 2000 2001 2002 2003 2004 2005 2006
Fiscal Year (Sep-Aug)
Gro
wth
Sin
ce 1
999 (
=100)
16
SERVICE QUALITYYYZ Arrival Delays
Toronto Arrival Delays for 2005 and 2006
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
IFR
Arr
ivin
g A
ircra
ft
Other delays 756 1,529 1,180 1,302 897 1,173 2,202 760 2,681 997 775 1,270 1,304 1,771 1,039 1,204 2,228 2,578 1,076 2,341 1,101 1,018 1,162
NC Attributable delays 65 28 0 24 0 5 0 39 0 36 51 97 84 96 328 117 122 72 26 7 44 38 0
On Time 16,293 14,948 14,507 13,657 15,991 16,356 13,900 15,644 14,531 16,073 16,528 15,792 16,201 15,530 16,497 17,495 15,319 14,906 15,976 13,659 13,688 14,668 14,865
J an-
05
J an-
06
Feb-
05
Feb-
06
Mar-
05
Mar-
06
Apr-
05
Apr-
06
May-
05
May-
06
J un-
05
J un-
06J ul-05 J ul-06
Aug-
05
Aug-
06
Sep-
05
Sep-
06
Oct-
05
Oct-
06
Nov-
05
Nov-
06
Dec-
05
Dec-
06
17
SERVICE QUALITYEquipment Outages
Total Number of Outages 2001-2006
0
500
1000
1500
2000
2500
Occurance Period
Nu
mb
er o
f O
uta
ges
Total Outages 20382159161414911554133913041185118011411211122812041062121712901079108511611152 871 870 912 737
Jan-Mar /01
Apr-Jun /01
Jul-Sep /01
Oct-Dec/01
Jan-Mar /02
Apr-Jun /02
Jul-Sep /02
Oct-Dec/02
Jan-Mar /03
Apr-Jun /03
Jul-Sep /03
Oct-Dec/03
Jan-Mar /04
Apr-Jun /04
Jul-Sep /04
Oct-Dec/04
Jan-Mar /05
Apr-Jun /05
Jul-Sep /05
Oct-Dec/05
Jan-Mar /06
Apr-Jun /06
Jul-Sep /06
Oct-Dec/06
18
What NAV CANADA Has Learned
Good consistent data based on clear definitions is essential.
Data must be relevant to customers. Measures must be related to objectives. Collecting, analyzing and reporting on
performance measures requires resources. Measure what’s relevant not what’s nice to
have. Must avoid demand driven comparisons
19
International Performance Measures
NAV CANADA’s overarching objectives require good international information from other ANSPs in a timely fashion.
Secretariat paper is helpful but too many different performance indicators to be useful.
Operational Concept has 11 key performance areas and more than 32 KPIs. This is too many.
International measurement must recognise that different ANSPs serve different customers. Measures must be relevant to those ANSPs.
Avoid prescriptive metrics. NAV CANADA supports the industry effort lead by
CANSO for global benchmarking.
20
Conclusion NAV CANADA is committed to safety, cost
effectiveness and quality service to customers. Using appropriate performance measures
ensures that NAV CANADA stays focused on customers’ concerns.
Timely and validated international performance measures would be very useful for ANSPs and their customers.
The development of ICAO’s performance measures must take into account local and regional differences, leaving ANSPs and their customers to determine the measures that work best for them.