Airlines to Save $1.35 Billion on EU Traffic Fees

Airlines that fly in the European Union may save more than 1 billion euros ($1.35 billion) on air- traffic charges over three years after national governments approved performance targets for navigation companies following a previous veto threat.

EU Transport Commissioner Siim Kallas won support from the governments for a proposal setting cost-efficiency goals for air-traffic control companies six weeks after withdrawing one because of national opposition. Kallas made the initial proposal in October using powers won under a 2009 “Single European Sky” law designed to break down national barriers.

“The Single European Sky has achieved a key milestone in its implementation with this agreement on ambitious but achievable performance targets,” Kallas said in a statement today in Brussels. The measures will lead to 340 million euros of savings a year for airspace users in 2012-2014, according to the European Commission, the EU’s regulatory arm.

The 27-nation EU is mounting a fresh campaign to force down air-traffic charges of about 7 billion euros a year in Europe. On a per-flight basis, that’s around double the rate in the U.S., where controllers handle twice as many flights.

The EU law foreseeing performance standards is a cornerstone of the broader campaign to create a Single European Sky by eliminating surplus civilian air-traffic centers and scaling back national military no-fly zones. The EU is already pressing military authorities to open up air-force exercise zones, governments to merge airspace and controllers to use the same equipment.

Emissions

Airlines ranging from Air France-KLM Group, Europe’s biggest carrier, to Ryanair Holdings Plc, the region’s No. 1 no- frills operator, have been demanding an end to the fragmentation of the continent’s airspace. The industry is recovering from the recession and bracing for higher costs as the EU prepares to cap carrier emissions tied to climate change as of 2012.

“It is an important step forward as we now have an agreement,” Christian de Barrin, a spokesman for the Association of European Airlines representing network carriers including Air France-KLM, Deutsche Lufthansa AG and British Airways Plc, said by e-mail.

The 2009 legislation established a framework for imposing binding performance targets on air-navigation companies such as the U.K.’s NATS Holdings Ltd., Deutsche Flugsicherung GmbH of Germany and France’s DSNA.

Unit Rate

The commission gained the right to draw up specific requirements such as cutting costs and reducing flight distances by certain percentages and to put those proposals to a regulatory committee made up of member-state officials.

Under the performance targets that the committee endorsed today, the determined unit rate will decrease to 53.93 euros per service unit in 2014 from 59.29 euros in 2011, according to the commission. These are EU-wide targets against which member states will have to establish their own performance plans at national or regional level.

“The challenge ahead is that member states define consistent national targets with the EU-wide performance targets,” de Barrin said.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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