Economic crisis hits air navigation services (18 May)


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Langen, 18 May 2009

Economic crisis hits air navigation services - DFS still achieved record result in 2008

In 2008, DFS Deutsche Flugsicherung GmbH increased its revenues from € 904 to € 915 million. With a net income of € 49.6 million, this amounted to € 7.8 million more than in the previous year. “Air transport in times of an economic crisis” was the motto of this year's press briefing held by DFS today to present its key indicators. Despite the global economic downturn, DFS CEO Dieter Kaden is proud of the company's performance. In 2008, DFS controlled more flights than ever before. The DFS controllers guided 3.15 million aircraft safely and punctually to their destinations – 1.1 percent more than in 2007. In 2008, 93.6% of all flights reached their destinations without any delays caused by air traffic control. And the number of aircraft proximities was practically at an all-time low. Considering that there were four safety-relevant proximities, with only one of which attributable to DFS, the safety level remains at a record high. This is testimony to the fact that Germany’s airspace is still one of the safest and most punctual in the world.

Since October 2008, the number of aircraft movements has been declining in Germany, with the number of take-offs, landings and overflights dropping by 4.4 percent in the last quarter of the year. Between 1 January 2009 and today, DFS has controlled precisely 1,006,065 flights. This is a drop of nine percent over the same period in the previous year. Mr Kaden did not want to forecast how air traffic will develop. “If I could tell you that now, I would surely make the newspaper headlines tomorrow,” he commented.

Mr Kaden drew attention to the problems facing an infrastructure company in times of crisis. A company such as DFS has to provide its infrastructure and services in both good and bad times. This stems from the statutory obligation of DFS to control air traffic safely and expeditiously. DFS has to upkeep technical facilities and systems throughout Germany, regardless of how high demand is. The company needs staff to develop, install and maintain this technology, and it particularly needs staff to guide aircraft safely to their destinations. DFS is presently investing more than € 60 million in the construction of new control towers at the airports of Frankfurt and Berlin-Schönefeld. The DFS CEO was optimistic. "We are investing in securing the position of Germany in terms of air transport because we believe in our future,” Mr Kaden said. A long-term forecast of the European Organisation for the Safety of Air Navigation (EUROCONTROL) predicts that air traffic in Germany will grow by at least half in the next 20 years. A company such as DFS cannot react to such a development quickly. Because of the demand for specialist staff at DFS, the company recruited more than 100 young trainee air traffic controllers in 2008. It will take around three years before they can work as fully qualified controllers. DFS has approximately 270 trainee positions for the years 2009 and 2010, with 106 of these positions already filled.

Unlike most other companies, DFS works on the principle of full cost recovery. Therefore, if DFS reduces its costs or obtains higher revenues than planned from ANS charges due to higher traffic volumes, it has to pass on this extra revenue to the airlines in the form of lower charges. In turn, higher unit costs result in higher ANS charges. This prevents DFS from building up reserves for “a rainy day” during times of prosperity.

For this reason, DFS has initiated a strict internal cost-cutting programme. Since February 2009, the recruitment policy has been tightened, and DFS intends to cut 6.5 percent of costs throughout the company. In addition, all projects are now being closely reviewed.

DFS Deutsche Flugsicherung GmbH is a State-owned company under private law and has 5,350 employees. DFS ensures the safe, orderly and expeditious flow of air traffic over Germany. Staff coordinate up to 10,000 aircraft movements in German airspace every day, and more than three million movements every year. With this large number of flights, Germany has the highest traffic volume in Europe. DFS operates control centres in Langen, Bremen, Karlsruhe and Munich. In addition, DFS is represented in the Eurocontrol Centre in Maastricht, the Netherlands, and in the control towers of the 16 international German airports. DFS provides training and consultancy services around the world and develops and sells air traffic control, surveillance and navigation systems. The company's portfolio also comprises flight-relevant data, aeronautical publications and aeronautical information services. DFS has the following business units: Control Centre, Tower, Aeronautical Solutions and Aeronautical Information Management.


18/05/2009	PRINT