The Central Route Charges Office and the Route Charges System
The EUROCONTROL Central Route Charges Office (CRCO), located at EUROCONTROL’s headquarters in Brussels, operates a cost-recovery system of air traffic management (ATM) services available to airspace users.
In the 1950s, major countries had long hesitated to impose charges on airlines that were often financially subsidised by the States. Even in the US there was a degree of protection from competition for incumbent carriers, while national flag carriers outside the country were usually nationalised. However, several factors brought the issue to the attention of governments. The level of traffic had been increasing rapidly since the introduction of jet aircraft, the complexity of the system was growing and the States were facing significantly increased costs in providing air navigation services as more advanced automated systems were required. In addition, States were aware that with the expansion of the civil aviation market they were providing services free of charge to airlines of other countries, often privately owned.
The Central Route Charges Office (CRCO) was established in 1971 to operate a centralised system for the collection of route charges.
The seven EUROCONTROL Member States at the time decided to adopt a common policy for en-route charging, create a joint system for the establishment, billing and collection of en-route charges, and use EUROCONTROL for these purposes.
Whilst the Agency was paving the way to set up the Central Route Charges Office, the Member States agreed, in November 1970, on the terms for the participation of non-Member States in the joint route charges system. Thereafter, bilateral agreements with Contracting States were negotiated, so when the system began to be implemented in steps on 1 November 1971 contracts already existed with Austria (July 1971), Switzerland (August 1971) and Portugal (October 1971). Spain reached an agreement on 17 December 1971 and Portugal extended its contract to cover the Santa Maria airspace over the Atlantic by a supplementary agreement in May 1972.
As of 1 April 2017, 40 states are participating in the Route Charges System.
The decision-making body governing the common route charges is the enlarged Commission for Route Charges and consists of the Ministers of Transport of the Member States or their alternates. It determines the principles for establishing the costs incurred by States in respect of en-route services and also determines the common rules for calculating route charges.
The enlarged Committee for Route Charges, consisting of Member States’ representatives at senior level, is the executive body in charge of supervising the operation of the system and preparing the decisions of the enlarged Commission. It is assisted in this function by the Agency.
Representatives of user organisations attend all the sessions of the enlarged Committee with an observer status. Their participation in the enlarged Committee allows for effective multilateral user consultation on changes affecting the route charges system – notably, the charging policy and the level of charges. The multilateral consultations take place during the June session, where States present their first estimates for calculating their cost-base for the following year(s), and during the November session for the discussion on the final figures and calculation of the unit rates for the following year(s). The unit rates are then approved by the enlarged Commission.
The Central Route Charges Office (CRCO) of EUROCONTROL has the responsibility to operate the common route charges system on behalf of the EUROCONTROL Member States.
The CRCO, a Directorate of the EUROCONTROL Agency, is functionally organised as follows:
- Front-office: “Billing, Customer Relations and Economics Division” (CRCO/BCE)
- Back-office: “Collection of charges, Accounting and Treasury Division” (CRCO/CAT)
- Support: “CRCO Information Services Unit” (CRCO/CIS)
Billing, Customer Relations and
Economics Division (BCE)
Collection, Accounting and
Treasury Division (CAT)
|CRCO Information Services Unit (CIS)|
The Route Charges System
The costs of air traffic management (ATM) services in Europe (infrastructure, staff and other operational costs) are funded through air navigation charges. ATM services are funded through the “user pays principle”.
Air service navigation providers (ANSPs) from the States participating in the Route Charges System recover the cost for facilities and services provided to airspace users by means of route charges. A charge is levied for each flight performed in the airspace falling within the competence of the Contracting States. States divide the airspace under their responsibility into charging zones. The cost-base for route facility charges and the calculation of the unit rates of their charging zones is established in accordance with the EUROCONTROL principles. These costs form the basis of route charges.
A unit rate established for each charging zone is expressed in euro and consists of two parts:
- the unit rate, obtained by dividing the en-route facility forecast cost-base of the charging zone concerned for the reference year by the forecast number of service units to be generated in the airspace of that charging zone during the same year;
- the administrative unit rate, the purpose of which is to recover the costs of collecting route charges (CRCO costs). It is obtained by dividing these costs by the number of service units generated in the EUROCONTROL charging area as a whole. The component of the unit rate representing the CRCO costs is therefore identical in all charging zones.
The unit rates are applicable as from 1 January of each year. To reduce the effects of exchange-rate fluctuations on the system, the unit rates involving Contracting States with a national currency that is not euro are adjusted every month in line with the exchange rate of the euro against the national currencies concerned.
Aircraft operators are charged a single amount per flight, irrespective of the number of States overflown. Bills are established by the CRCO, using flight messages sent by the Contracting States' Route Charges Offices (RCOs) and additional flight information made available via the EUROCONTROL Network Manager Directorate (NMD). The CRCO bills aircraft operators on a monthly basis, collects charges, and distributes the amounts collected to the States and service providers at their request or every week. Financial and operational reporting is permanently available.
The route charges system is governed by the EUROCONTROL Convention and the Multilateral Agreement relating to Route Charges, signed in 1981.
Route Charges System attributes
The route charges system is:
- regional: it covers our Member States;
- simple: a single charge per flight in one currency payable to one body;
- equitable: route charges are paid by users and not by taxpayers;
- non-discriminatory: charges are calculated with the same rules and applied to all parties;
- cost-related: our principles ensure that only air traffic management (ATM) costs are charged;
- cost-effective: low collection costs, high recovery rate.
The system is based on transparent decision-making processes, stringent internal and external controls and on an effective user consultation process. Providing coordinated route-charging mechanisms eliminates duplication and improves both the transparency and efficiency of cost-recovery over the widest possible area.
The CRCO delivers high quality pan-European route charge services as well as other navigation charge services on request. The ambition and main business objective remains to continue operating, maintaining and developing the EUROCONTROL Multilateral Route Charges System by meeting the needs of States, Air Navigation Service Providers and Airspace Users in terms of quality of services and cost-effectiveness.
The operation of the common route charging system has continuously expanded over recent years and is directly linked to EUROCONTROL’s goal of expansion to include all ECAC States.
Over the years, the CRCO has developed billing and collection services on a bilateral basis to respond to the requests from Member and non-Member States for such services, to achieve an optimum use of the available resources and expertise and to create a level playing field from a route charges perspective for the pan-European airlines.
- A logical extension of the Multilateral Agreement for Route Charges is the billing and collection of terminal navigation charges (TNC).
- The CRCO provides air navigation charge (ANC) billing and collection services to States that are not Member States of EUROCONTROL as well as billing and collection of communication charges on behalf of Ireland for the Shanwick area.
- The EUROCONTROL Route Charges System is a regional cost-recovery system - aligned with ICAO recommendations - that funds air navigation facilities and services and supports air traffic management developments.
- The Conditions of Application of the route charges system and conditions of payment describe in detail the formula used for the calculation of route charges, the categories of flights exempt from payment of route charges, and the procedures for payment of route charges.
- The Principles for establishing the cost-base for route facility charges and the calculation of the unit rates set out the common principles by which the costs of providing air navigation facilities and services are established by States/service providers.
- The Guidance on the rules and procedures of the route charges system is a complement to the existing rules. Part 1 gives a general outline of the role of the CRCO and the procedures and processes of the route charges system. Part 2 is of a more technical nature, and gives detailed guidance on interpreting the "Principles" with examples of best practices, additional explanations, clarifications and practical advice.
- The Customer Guide to Charges provides information on the different charges levied by the CRCO, in particular the charge calculation methods, the basic billing documents, the methods of payment and the submission of claims.
The Route Charges System and the implementation of the Single European Sky
The billing and recovery of air navigation charges by EUROCONTROL is indispensable in ensuring that air navigation facilities and services are steadily financed and safely operated, paving the way for the future evolution of the pan-European Air Traffic Management (ATM) system in the context of the Single European Sky and the European ATM Master Plan (SESAR).
The Single European Sky initiative recognised that a common charging scheme for the air navigation services provided during all phases of flight is a key element in the implementation of an integrated air traffic management system across Europe.
The Route Charges System ensures coherence between SES Regulations and EUROCONTROL’s Principles concerning the establishment and collection of air navigation charges.
The “Principles for Establishing the Cost-Base and the Unit Rates” were amended by Decision No 122 of the enlarged Commission dated 1 October 2013 and a new version entered into force in November 2013.
- Commission Regulation (EC) No 1794/2006 of 6 December 2006 laying down a common charging scheme for air navigation services.
- Commission Implementing Regulation (EU) No 391/2013 of 3 May 2013 laying down a common charging scheme for air navigation services.