European air traffic control providers are to cut unit rates by an average of 7% next year. The average unit rate for the 32 Eurocontrol member states in 2004 will be €58 ($77), down from €62 in 2004, with 26 air traffic service (ATS) providers reducing their unit rates. Slovakian ATS provider LPS was the star performer with a 28% reduction.
Eurocontrol director general Victor Aguado says the 7% average decrease "is the result of the cost-containment measures taken by European states and air navigation service providers and of a sustained return to traffic growth".
He adds that the decreases will "contribute to reduced airline costs and will help make the air traffic management industry more effective and responsive to the needs of users." Writing in this issue Aguado points out that delays have halved despite the rebound in traffic.
Airlines are broadly pleased with the reduction. "This is a welcome development," says Simon McNamara, manager infrastructure and the environment at the European Regions Airline Association. He points out, however, that with all providers except the UK's NATS operating under the cost-recovery model, the rebound in traffic after the post-11 September downturn is a major factor behind the reduction.
Actual costs are going up 4.4%, roughly in line with inflation, he says. Unit costs have gone up by 9.4% in the 2000-5 period, again roughly in line with inflation. Airlines have been pressurising the ATS providers to dramatically improve efficiency, a process supported by the Single Sky programme.
NATS warns that the new charging system proposed by the UK CAA could affect service performance and investment. From January, prices will be set at the rate of inflation minus 4.5-5%. "Customers have said that they need continuous service improvements, extra capacity when, and where required, delivered efficiently and economically," says Paul Barron, NATS chief executive. "At first glance, the CAA's proposals seem to place more emphasis on year-on-year real price reductions."
Meanwhile, the UK and Ireland are planning to build functional blocks of airspace in the North Atlantic designed for user convenience rather than to fit around national boundaries.
Source: Airline Business
