EU Challenges Air-Traffic Controllers With Price Cut

European Union regulators requested new powers to lower air-traffic charges and shorten flight routes in the bloc, challenging national controllers in a bid to offer relief for carriers.

The European Commission presented proposals to tackle the national fragmentation of Europe’s airspace. The draft legislation would give the Brussels-based commission greater authority to enforce performance standards for air-traffic-control organizations and would open up their support services such as meteorology and data collection to competition.

“The time has come to take decisive action on behalf of Europe’s airlines and their customers,” EU Transport Commissioner Siim Kallas said today in Strasbourg, France. “We are putting performance targets where they belong -- at the heart of the reform process. And we are setting the bar high.”

The initiatives reflect impatience with vested interests and a lack of competition that are preventing a more integrated aviation system in Europe, where air-traffic charges are around double the rate in the similarly sized U.S. airspace. The proposals need the support of EU national governments and the European Parliament in a process that can take a year or more.

Photographer: Jason Alden/Bloomberg

Ryan Lipton, an air traffic controller at London Southend Airport looks out from the control tower in Southend, U.K. Air-traffic control accounts for between 6 percent and 12 percent of the cost of a ticket, according to the European Commission. Close

Ryan Lipton, an air traffic controller at London Southend Airport looks out from the... Read More

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Photographer: Jason Alden/Bloomberg

Ryan Lipton, an air traffic controller at London Southend Airport looks out from the control tower in Southend, U.K. Air-traffic control accounts for between 6 percent and 12 percent of the cost of a ticket, according to the European Commission.

Political Sensitivity

In a sign of the political sensitivity of the matter, French air-traffic controllers anticipated the EU proposals by announcing a three-day strike -- subsequently shortened to two days -- that started this morning.

France’s civil aviation authority has asked airlines to cut by half the number of scheduled aircraft movements so flights can be managed by fewer controllers, leading to the cancellation today of 1,800 flights to and from French airports by carriers including Air France-KLM Group, Deutsche Lufthansa AG (LHA), Ryanair Holdings Plc (RYA) and EasyJet Plc.

Inefficiencies caused by fragmentation add 42 kilometers (26 miles) to the distance of an average flight in Europe, imposing extra costs of almost 5 billion euros ($6.6 billion) a year, says the commission, the EU’s regulatory arm. Air-traffic control accounts for between 6 percent and 12 percent of the cost of a ticket, according to the commission.

The EU has sought for more than a decade to create a “Single European Sky” by eliminating surplus civilian air-traffic centers and scaling back national military no-fly zones. The bloc has also pressed military authorities to open up air-force exercise zones, governments to merge airspace and controllers to use the same equipment.

Reduced Services

“Our airlines and their passengers have had to endure more than 10 years of reduced services and missed deadlines on the route to a Single European Sky,” Kallas said. “We cannot afford to continue this way. We need to boost the competitiveness of the European aviation sector.”

Airlines ranging from Air France-KLM (AF), Europe’s biggest carrier, to Ryanair, the region’s No. 1 no-frills operator, have called for a faster end to Europe’s airspace fragmentation.

The new proposals seek to make the setting of efficiency targets for air-traffic management more independent and to make those standards more enforceable. The commission’s role would be strengthened vis-à-vis EU governments, which currently have the ultimate say.

Political Fight

The draft legislation would also require that support services, which are the biggest cost driver in air-traffic management, be separated so they can be put out to competitive tender under regular procurement rules. Such a step would lead to 20 percent savings, according to the commission.

The International Air Transport Association, representing more than 240 airlines that carry 84 percent of global traffic, said in a statement that the blueprint is a “clear step in the right direction,” while lacking sufficient urgency.

The French government signaled the political fight ahead over the proposals by saying it objects to them because existing EU legislation in this area should be given more time to produce benefits for airlines.

In a statement, French Transport Minister Frederic Cuvillier also said that he and his German counterpart, Peter Ramsauer, had written to Kallas to express their reservations about the latest draft legislation.

“France does not support this new initiative of the European Commission,” Cuvillier said.

On a parallel track, Kallas is threatening to pursue lawsuits against EU governments for failing to heed the existing rules designed to lower costs for airlines flying in the 27-nation bloc.

“We are doing our utmost to enforce existing legislation as well,” he said.

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

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

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