Germany's DFS, Airlines Clash Over Cost Increase

 - June 17, 2014, 4:51 PM
A DFS controller monitors air traffic at the Bremen Control Center. (Photo: DFS Deutsche Flugsicherung)

German air navigation service provider (ANSP) Deutsche Flugsicherung (DFS) said that its plan to significantly raise the user fees it charges airlines resulted from less-than-forecast air traffic. The Association of European Airlines (AEA) has denounced the plan and warned that Germany’s airspace will become the most expensive in Europe.

According to the AEA, the main reason DFS gave when it announced earlier this month that it plans to increase air navigation charges was its “unmanageable” pension obligations. The government-owned ANSP “intends to increase its user charges by a staggering €300 million ($406 million) annually as of 2015,” stated the association, which represents 30 airlines. “The European airline community has expressed its deep outrage about this massive cost increase, which blatantly contradicts the recent commitment to lower costs made by Germany and the other EU member states in the context of the Single European Sky (SES) framework.”

The DFS, which belongs to the Functional Airspace Block Europe Central (Fabec) grouping of ANSPs, recovers the costs of the air navigation services it provides to airspace users from terminal, en route and other charges. Responding to a query from AIN, the ANSP said the sum of the planned increases remains undetermined, but that it would likely total around €300 million ($408 million), the amount the AEA used. But it disagreed with the airline association over the reason for the cost increase, blaming it mainly on a drop-off in air traffic volume.

“While it is true that one reason for the increase is the higher costs for pension obligations, another factor is the incorrect forecast for traffic development,” the DFS said in a statement. “While the EU assumed that there would be a substantial increase in traffic volume, in reality traffic volume dropped significantly. Under established regulations, an under-recovery arose that now has to be offset. The airlines are well aware of this situation.”

The AEA warned that the intended cost increase could set back efficiency improvements sought under the SES effort. “We urge the German government as the owner of DFS to face up to its responsibility, firstl to ensure compliance with its self-defined targets and second to take all necessary measures to avoid an exorbitant increase in charges to the detriment of all airspace users and to the competitiveness of the air transport market in core Europe,” said Athar Husain Khan, AEA chief executive.