We would like to share with you our latest EUROCONTROL Think Paper, which assesses whether the European Route Charges System, which has effectively funded en-route air navigation services (ANS) across the pan-European network for 50 years, is still fit for the future in the wake of a pandemic which has put enormous pressure on the way these services are financed.
We find that pre-pandemic, the Route Charges System had flexibly adapted and evolved over the years, with EUROCONTROL’s Central Route Charges Office billing and collecting route charges from airspace users with an enviable 99.7% recovery rate. Those monies collected in turn covered the cost of providing en-route ANS, amounting to around 96% of the revenues required for this by air navigation service providers.
COVID-19 has however caused a massive revenue shortfall. The significantly reduced traffic has failed to match the fixed costs of ANS provision, causing a funding gap that should reach €8.6 billion by year-end, a huge revenue shortfall that will mostly be shouldered by airlines in the form of higher route charges in the years ahead.