Air Navigation Service Providers feel the pinch

In an open letter to all Air Navigation Service Providers (ANSPs), Alexander ter Kuile, Secretary General of the Civil Air Navigation Services Organisation (CANSO), has warned about the economic crisis now affecting aviation and its potential impact on CANSO members. Cost recovery charges are now potentially pitching airlines against ANSPs.

“Demand for air travel is well below previous years with air traffic movements down by as much as 18%,” he writes. “Despite the emergency measures undertaken by ANSPs, navigation charges will rise significantly in future years. In all aviation sectors revenues are falling by extraordinary amounts and ANSPs are not immune to the effects of this decline.

“With negative cash flows from falls of up to 20% in revenues (and with regulations barring many from holding financial reserves or obtaining commercial loans), some ANSPs are facing an unprecedented financial crisis, which may result in them being unable to meet their financial obligations. These ANSPs will be forced to turn to their states to urgently seek alternative funding options.

“The challenge the ANSPs face is to reduce capacity in the short-term while maintaining the flexibility to raise capacity when demand returns. ANSPs have a high fixed cost base, as the Air Traffic Management system must operate and be staffed at all times – even when demand is low. If aircraft operators insist on further cost savings, it is important to recognise that these will only be delivered through an adjustment in service levels – shorter opening times or a lower availability of services.

“Cost recovery was designed when air traffic growth was a given. However, at the first sign of turbulence, the system pitches ANSPs and airlines against each other as if they are age-old enemies. We must work together to resolve these issues.”