The letter S in the abbreviation ATS stands for Services. Air traffic services are the essential commodity all but the simplest VFR flyers are obliged to purchase, at least for the foreseeable future. Air traffic control is one of these services. The price varies as does the value for money across the planet.
What happens if demand for a given service goes down? The price drops right? WRONG! In European air traffic service provision air navigation service providers are obliged to recover 100 % of their costs from the airspace users. When demand for the service diminishes, the price goes up. This is logical since the cost of the service is only loosely connected with the number of aircraft handled while reduced demand means there are fewer aircraft who will share the same overall cost.
So, those users who manage to survive the first onslaught of a crisis will be rewarded by the system with higher user charges… Taking this to an extreme, and admittedly hypothetical, scenario the last airline standing would not only need to switch off the lights but also take out a loan to pay for the passage of its last aircraft as it heads to the scrap yard.
Of course it is not in the interest of air navigation service providers to make life even more difficult for the airlines by user charges that go through the roof. The full cost recovery system forces them to seek the balance in the reduced demand scenario and raising prices is sometimes the only option. Of course they could do more to reduce their costs and hence avoid the need for a raise and indeed there are providers who managed to do that. But there is a limit to what can be done or reasonably expected.
The full price recovery system was clobbered together at a time when the whole civil air transportation world was a very different place, with change
extremely slow and a kind of stability we can only dream of to-day. Like any system created essentially by paper pushers, it is counter productive in many respects (it misses any real incentive to reduce costs on the ground for instance) and compared to the way road and rail (not to mention water) transport infrastructure is financed, it looks like somebody must really have had an axe to grind with the airspace users.
Even CANSO, the Civil Air Navigation Services Organization agrees that the system must be reformed. They are calling for innovative ideas…
There are two issues that need to be solved here.
First and foremost, immediate action is required to dampen the cost increasing effects of the current crisis and attendant downturn in demand. This is absolutely essential and should have been undertaken yesterday.
The other, more strategic issue is figuring out how to solve the question of financing air navigation services that is equitable, does not put airlines at a disadvantage in respect of other modes of transport and which is flexible and adaptable enough to be able to grow with and align to future air transport developments.
The modern airplane is a very sensitive business tool and the seats in it are the most perishable good on the globe. Once the doors are closed, an empty seat represents lost revenue that can never ever be recovered. The environment in which that business tool is operated and in which the goods are sold must be fine tuned to the specific needs of the business and this includes the charging system also. At the same time it must be remembered that air navigation service providers also have certain very specific considerations that must be kept in mind when a new charging system is put forward.
The two key words are “user” and “provider”. Being tied together with reverse business logic needs to come to an end.