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Monday, September 20, 2021

Airline ticket prices may increase. ULC for PAP: August 31 this year. consultations of the aviation industry on fees charged by PANSA are to take place

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The Civil Aviation Authority informed the Polish Press Agency that consultations of the aviation industry on the “Plan for the effectiveness of air navigation services for the years 2020-2024” are scheduled for August 31 this year. It includes, inter alia, an increase in fees charged by PANSA, including for servicing the aircraft during take-off and landing in Poland. Industry representatives point out that it can result in an increase in airline ticket prices.

This week, the aviation industry issued an open letter addressed to Prime Minister Mateusz Morawiecki and Minister of Infrastructure Andrzej Adamczyk on “a drastic increase in fees related to the provision of air navigation services in Poland, especially at Polish regional airports.”

Increasing fees for the aviation industry

The Polish Air Navigation Services Agency charges two fees related to the provision of air navigation services in Poland. They are: the terminal fee, i.e. the rate charged by PANSA for servicing aircraft during take-off and landing at each airport, and the route fee charged for each flight of the aircraft in the airspace controlled by air traffic control services.

The authors of the letter wrote that the Civil Aviation Authority provided airport managers in Poland and air carriers operating in Poland with a revised “Air navigation service efficiency plan for 2020-2024”. They indicated in the letter that in the submitted proposal “an increase from 1 January 2022 was proposed in a drastic, uneven and non-competitive manner.” terminal and route charges.

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The press office of the Civil Aviation Authority informed PAP that the President of the Office, Piotr Samson, “got acquainted with the information contained in the open letter of the aviation industry addressed to Prime Minister Mateusz Morawiecki and Minister of Infrastructure Andrzej Adamczyk”.

“The place for discussion on the assumptions of the ‘Air Navigation Service Effectiveness Plan for 2020-2024’ will be a consultation meeting scheduled for August 31, 2021, during which the CAO will get acquainted with the opinion of the environment and comments on the project” – the CAA said.

As emphasized by the Office, “a plan is a proposal that must then be approved by the Ministry of Infrastructure and the European Commission”.

Where did such increases come from?

The head of PANSA Janusz Janiszewski said in an interview with PAP that “the increase in terminal and route rates is a consequence of, inter alia, the covid situation that has affected everyone”. He indicated that the covid crisis affected PANSA as well as other aviation institutions.

As he said, another reason for the change in rates is the mechanism in which the European Union accounts for the entire period of COVID-19 and losses caused by the pandemic.

– The European Commission has enacted a law that states that from 2023, for 5-7 years, air navigation service providers in Europe will be able to regain lost profits. So we will recover lost revenues from the years 2020-2021 in PANSA from 2023. The rates in the currently consulted performance plan are for the period 2022-2024. And this is the law, consulted by airlines and airports, explained Janiszewski.

All actors, he added, “are aware of how the EU has produced legislation that has to some extent assist Europe’s PANSA in repairing these massive losses of 70 percent or even more.”

– And secondly, we, as Poland, fulfill the EU goals. The European Commission announced that due to the crisis, in 2022, 2023 and 2024, the costs of PANSA cannot be higher than 96-97 percent. costs of 2019. And this is the EU goal that we are fulfilling. We are not increasing our costs compared to 2019. we’re even a little below. Obviously, the unit cost is higher because the traffic is lower, he explained.

The head of PANSA noted that due to the losses caused by COVID-19, PANSA did not receive – like its counterparts from Germany, Great Britain, Italy – either public aid or other financial instruments.

– We had to take out loans. And such a first loan for PLN 250 million is taken out and launched. Now, I hope that by the end of October we will release a second loan from BGK in the amount of PLN 550 million. The total amount of loans is PLN 800 million. And in accordance with the law enacted by the European Commission, after agreeing with the Member States, the financial consequences of these credit obligations are reflected in the fee rates. The Civil Aviation Authority and the Ministry of Infrastructure agreed to this, approving our annual and five-year plan – said Janiszewski.

The head of PANSA emphasized that its strategic goal was and is to maintain financial liquidity. As he said, the Agency’s costs were significantly reduced for this purpose. The information from PANSA shows that the total costs of the Agency for 2020-2024 have been reduced by PLN 1 billion.

Janiszewski reminded that 99 percent of PANSA it lives on navigation fees, i.e. on the number of planes that will fly through Polish airspace. – We do not have business opportunities all the time – he pointed out.

Airline Ticket Prices Will Increase?

In the letter, its authors recalled that there have been two terminal charging zones in Poland for several years: the first for the main airport, i.e. Chopin Airport in Warsaw; and the other for all thirteen other regional certified airports.

As they indicated, in the submitted proposal it was proposed to increase, from 1 January 2022, the following charges: terminal (applies to a single air operation): for Chopin Airport from PLN 343.08 in 2021 to PLN 524.58 – an increase by PLN 181.50 (by PLN 53 percent); for Regional Airports from PLN 791.12 for 2021 to PLN 1347.76 – an increase by PLN 556.64 (an increase by 70%); and route – from PLN 195.70 for 2021 to PLN 245.81 – an increase by PLN 50.11 (an increase by 26%).

According to the authors of the letter, “the proposed increase in fees will not only limit the offer of airlines from Polish Regional Airports, but will most likely be passed on to passengers by increasing the prices of airline tickets”.

PANSA is the only institution in the country that trains and employs air traffic controllers. They are on duty 24 hours a day, seven days a week. PANSA is also responsible for the management of Polish airspace and the aviation infrastructure that it builds and develops. It supervises, among others over the radar system, air navigation equipment, communication systems and landing aid systems.

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