The International Air Transport Association (IATA) has called on Denmark and Iceland to revoke the planned increase in air traffic charges (ATC rate), calling the move a “cash grab.”

The fees charged by the Danish and Icelandic Air Navigation Service Providers (ANSP) are set to increase by up to 30% on 1st January 2023.

Two men shake hands in front of IATA brandingIATA has written to the Danish Transport, Construction and Housing Authority, and Isavia ANS | © IATA

ATC Rates Increased Without Consultation

The fees incurred by airlines wanting to cross airspace managed by the two ANSPs will rise at the beginning of the year, affecting many North Atlantic routes. The increase was announced unilaterally without user consultation, input or justification.

In response to the announcement, IATA has written to the Danish Transport, Construction and Housing Authority, and Isavia ANS, calling for the plans to be scrapped.

“This is a cash grab by two monopoly suppliers with no justification. It must be stopped.” said Peter Cerdá, IATA’s Regional Vice President in the Americas, “Why should airlines pay a higher price for a service by a monopoly supplier that has not changed and with nothing to justify the higher cost?”

Peter Cerdá speaks at an IATA conference“This is a cash grab by two monopoly suppliers,” says Peter Cerdá, Regional VP, the Americas | © IATA

ICAO Guidelines Not Followed

The International Civil Aviation Organization (ICAO) provides guidelines to ANSPs to ensure a transparent consultation process. Following these guidelines is a well-established international practice which seems to have been ignored by the Nordic ANSPs.

As part of this exercise, detailed information on the proposed increases, including differences in cost structure, traffic data of the past five years and the 2023 traffic forecast, needs to be made available to airlines.

With IATA representing some 290 airlines, comprising 83% of global air traffic, they have some pull within the industry.

Mr Cerdá went on to offer an alternative to the air traffic charge rate increase, saying,

“Rather than ramping up charges, the providers should be looking to achieving efficiencies that will keep costs under control. And if efficiencies cannot be found, then it is time for these suppliers to sit in consultation with their customers to review proposals.”

CEO of Isavia ANS, Kjartan Briem has responded to Mr Cerdá’s comments saying, “It should be noted, that the user charges in the area are based on cost-recovery under agreements signed by 24 nations and operated by ICAO.”

He went on to expand on their consultation process stating they had a user consultation meeting on September 14th of this year, saying, “It is our belief that the meeting, which was five hours long, and was attendable both on-site as well as on-line, was transparent and informative for both sides.

The Isavia ANS statement in full:

“It should be noted, that the user charges in the area are based on cost-recovery under agreements signed by 24 nations and operated by ICAO.

 For the average flight, flying 1373 km through the Danish and Iceland area, there will be a cost increase in charges by 5.4% for the Icelandic charges and 8.8% for the Danish charges between 2022 and 2023. This increase, which is less than the current inflation levels and includes part of the 2020 under-recovery and the 2021 under-recovery, has been approved by the ICAO Council. As Denmark and Iceland are bound by the Joint Financing Agreements, these rate changes can not be delayed. 

Regarding the consultation process:

 It is our belief that the information given prior to and during the user consultation meeting on September 14, 2022, was at par with information given prior to our meetings in previous years.  Information regarding cost and proposed user charges was sent two weeks prior to the meeting. The traffic forecast used is prepared by the NAT EFFG, a subgroup of NAT SPG, where IATA is a member. At the request of IATA at the 2021 user consultation, more detail in the service´s cost structure was given at this year´s meeting, as well as information on the development of cost and traffic. It is our belief that the meeting, which was five hours long, and was attendable both on-site as well as on-line, was transparent and informative for both sides.”

Travel Radar has requested comment from the Danish Civil Aviation and Railway Authority.

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