Airlines push back on payments to air traffic controllers

Airlines push back on payments to air traffic controllers

Airlines want to defer payments to Europe’s air traffic controllers, worth about €500m a month, as they battle a deepening cash crisis from a virtual shutdown of international travel amid the coronavirus pandemic.

Carriers are collectively pushing back on paying February’s charges that are due next month to Eurocontrol, according to people familiar with the situation.

Eurocontrol co-ordinates national air traffic management agencies and is responsible for collecting route charges from carriers to fund air navigation facilities and services in the EU.

It comes as the global airline industry faces a cash crunch. The International Air Transport Association on Tuesday said the sector will need up to $200bn in emergency support as the travel industry bleeds cash in the face of a global lockdown.

The airlines’ main trade body has warned that the majority of carriers face running out of money within two months because of the sudden halt in international flights by governments attempting to contain the coronavirus outbreak.

A spokeswoman for A4E, the European airline trade body, said it was asking governments in the region to defer the payment of air traffic control charges due as well as waiving aviation taxes at EU or national level to help the sector’s future recovery.

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“At this point, many of Europe’s airlines have made the difficult decision to ground all or a substantial part of their fleet for the coming weeks. Many carriers have also been forced to proceed with temporary staff cuts . . . Any fiscal burdens should be put aside until the industry is back on a sound operational and financial footing.”

The payment for February is due on April 13, according to Eurocontrol’s website. Eurocontrol works by collecting money from airlines that fly over European airspace and pays a proportion of that to national governments. In 2018, it collected over €9bn.

Based on figures for the month of January, Ryanair would have paid the most in air traffic charges to Eurocontrol at about €48m.

Eurocontrol declined to comment on the request to defer payments.

Andrew Charlton, a Swiss-based aviation consultant, said that if air traffic controllers — who are in charge of keeping the skies safe on a daily basis — are not paid by airlines, then the whole air travel system goes into even more of a “meltdown”.

He noted that most air traffic control groups typically only have about two or three months’ worth of cash, of which a large proportion goes on salaries.

On Tuesday, Canso, which represents global air traffic managers, warned that the coronavirus crisis was having a big impact on the sector, which is a critical part of national infrastructure.

It noted that air traffic controllers’ revenues are directly related to the volume of air traffic they control and so are “extremely vulnerable to the decreasing traffic”.

“Many are already deploying cost containment measures, but there’s no doubt that a decrease in revenue could significantly impair their ability to safely and seamlessly handle traffic when the volumes inevitably pick up again,” warned Canso.

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