DFS records good results and reacts to massive decline in air traffic

In the business year 2019, DFS, the German air navigation service provider, was able to increase its revenues and Group earnings, despite a slight decrease in traffic demand and an increasingly difficult external environment. In 2019, 3.334 million controlled flights were recorded in German airspace, 0.4 percent fewer than in the previous year. As a result of the corona crisis, traffic in the first quarter of 2020 decreased dramatically. At the end of March, the traffic volume in Germany was 84.7 percent below that of the previous year.

02.04.2020.- In the business year 2019, the DFS Group increased it revenues under IFRS by 0.3 percent to EUR 1.181 billion. (2018: EUR 1.177 billion). This means that total operating revenues and income rose by about EUR 3 million. The various components of this figure developed differently, however.

As a result of the significantly lower unit rates in 2019 compared to the previous year, revenues from en-route and terminal charges decreased by EUR 15 million. The other components of revenues developed more favourably. The commercial business and training services, in particular, generated high revenues.

Revenues of the national and international DFS subsidiaries increased to EUR 87.1 million (prior year: EUR 67 million). The earnings before interest and taxes (EBIT) amounted to EUR 1.9 million (prior year: EUR 1.5 million). Start-up losses have been considered in these figures. “This shows that our commercial business is making a larger contribution towards our success as a company,” said Klaus-Dieter Scheurle, CEO of DFS.

Staff costs in the DFS Group increased by 6.4 percent to EUR 935.2 million. The number of employees rose by 2.5 percent to 5,585 (prior year: 5,437).

Earnings before interest, tax, depreciation, and amortisation (EBITDA) at DFS decreased by 44.9 percent to EUR 78.01 million. Net income for the business year climbed by 218.3 percent to EUR 35.6 million (prior year: net loss of EUR 30.1 million). This increase is based on the positive net financial result of EUR 65.4 million. “In 2019, we saw sound operating and financial growth overall. Considering the weakened economy and the negative development in the aviation industry, we can be satisfied with the development of the business. In a challenging environment, we succeeded in significantly increasing earnings compared with the same period last year,” said Scheurle.

More traffic, increased punctuality

In 2019, after years of growth, the volume of air traffic in German airspace declined slightly. For the first time in five years, no increase in aircraft movements was recorded in German airspace as a result of the weaker global economy. Although the volume of traffic between January and May exceeded the figures of the prior-year period, a downward trend could be observed in the second half of the year. Overall, 3.334 million flights under instrument flight rules were recorded in German airspace (2018: 3.346 million), 0.4 percent fewer than the year before.

While the number of entries and exits stagnated, the number of overflights and domestic flights declined. Airports in Germany experienced different trends. While there was a slight increase of 0.1 per cent to 2.132 million take-offs and landings at the designated international airports in 2019, regional airports recorded 162,558 take-offs and landings, which corresponds to a decline of 3.1 per cent over the previous year.

In 2019, the negative trend in delays in European and German air traffic could be halted. Especially during the high-traffic summer months, delays were significantly reduced compared with the previous year. In 2019, DFS handled 90.6 per cent of all flights without any delays caused by air traffic control, an improvement over the previous year. The main reason for this development were the measures agreed between the companies of the German air transport industry and the German Government in October 2018 and March 2019. Their implementation required substantial human and financial resources.

Corona is a challenge for DFS

As a result of the corona crisis, traffic dropped dramatically in the first quarter of 2020. On 31 March, only 1,341 flights were controlled in German airspace. This is a 84.7 percent decrease over a comparable day last year. "There has never been such a slump in the history of DFS. While the decline still has a limited impact on cargo airports such as Leipzig or Cologne Bonn airports, traffic at other airports has virtually come to a standstill,” said Klaus-Dieter Scheurle. "Due to the dramatic drop in revenues from charges, DFS is expecting a decline in these revenues of approximately EUR 500 million this year."

DFS immediately initiated measures to ensure it can perform as required during the crisis. To protect its employees, the number of operational staff in the control centres and towers has been reduced to a minimum and the remaining jobs are carried out from the home office, wherever possible. "To make this possible, we have quickly established the required IT infrastructure to enable hundreds of employees to work from home. We have thus achieved a technological leap forward of which I am very proud.”

DFS has concluded a corona collective bargaining agreement with its collective bargaining partner, which allows an accumulation of up to 300 negative working hours. "Short-time work or even compulsory redundancies are no option for us," said Scheurle. "With this collective agreement, DFS has created the required flexibility to be able to provide the required capacity in the event of a renewed increase in air traffic.” Admittedly, nobody can currently predict how long the corona crisis will last. However, past traffic slumps had shown – from the terrorist attacks of September 11, 2001 to the financial crisis of 2008 – that air traffic recovered very quickly, according to Scheurle. "My personal opinion is that we may see a clear upward trend as early as the second half of 2020.”

Media contact:
Christian Hoppe
Phone: +49 (0)6103 707 – 4100

DFS Deutsche Flugsicherung GmbH
, the German air navigation service provider, is a State-owned company under private law with 5,600 employees as at 31 December 2019. DFS ensures the safe and punctual flow of air traffic over Germany. Around 2,200 air traffic controllers guide up to 10,000 flights in German airspace every day, more than three million movements every year. This makes Germany the country with the highest traffic volume in Europe. The company operates control centres in Langen, Bremen, Karlsruhe and Munich as well as control towers at the 16 designated international airports in Germany. The subsidiary DFS Aviation Services GmbH markets and sells products and services related to air navigation services, and provides air traffic control at nine regional airports in Germany and at London Gatwick Airport and Edinburgh Airport in the UK. DFS has been working on the integration of drones into air traffic since 2016 and has set up a joint venture, Droniq GmbH, with Deutsche Telekom. www.dfs.de