Financing air traffic management : is there a need for a new approach?

Abstract

Air Traffic Management (ATM) is a set of services which every State must provide for the safe and efficient operation of air traffic. Today, it is almost entirely financed by user fees according to the “user pays” principle. Until today, the “user” has always been assumed to be the airspace user, normally an airline. This system comes under pressure today: current Single European Sky (SES) regulation is built on the assumption that air traffic in Europe continuously increases. Thus, the financing of ATM would be secured by increasing revenue due to higher traffic volumes. Technological progress and efficiency gains should lead to reduced cost and lower environmental footprint of aviation while increasing safety and capacity. Two crises – the financial and banking crisis of 2008 and more recently the COVID-19 pandemic – show that the assumptions of this regulatory framework are wrong. Additionally, there is the question of who the actual “users” are. Does ATM only serve paying airlines, or are there some services which are provided in the public interest? Turning the wheel back and promoting a full cost recovery financing model would be contrary to the logic of regulating monopolistic infrastructure providers. But it is a fact that recent events raise the question as to whether the current financing model, which is ultimately market based, is still adequate. With the pressure to increase the efficiency of the SES for environmental reasons, one may wonder whether some baseline public financing for the critical infrastructure portion of the ATM – which could be different from country to country – could not mean a step towards a better charging scheme and therefore a step towards the leading ideas behind the SES and the European Green Deal. In light of the above, the 19th Florence Air Forum brought together relevant stakeholders to discuss opportunities and challenges for ATM financing.