The European Commission (EC) is facing a further setback on the implementation of Single European Sky (SES) after Germany blocked the voting procedure on regulations establishing performance targets for air navigation service providers (ANSPs) and fees for air navigation services (ANS) for 2015-2019. Most Nordic states voted to endorse the proposed regulations.

“Germany’s Ministry of Transport has requested to stop the process and wants to restart negotiations on a less stringent performance and target scheme because it agreed to salary increases of its air traffic controllers last year,” a high-ranking EC official tells Aviation Week. German air traffic control authority DFS in October agreed to increase pay 5.2% in two stages over 17 months, while some employees would be promoted and receive a further increase.

“Germany is now seeking support of other FABEC members to push for lower targets, but the Commission is not prepared to give further concessions,” the source adds. FABEC or FAB Europe Central is the functional airspace block earmarked to manage the airspace of six countries: Germany, Belgium, France, Luxembourg, the Netherlands and Switzerland. FABEC airspace accounts for 55% of all European traffic and is located above or close to the major European airports. The civil FABEC air navigation service providers employ a total of 17,700 people, of whom 5,400 are air traffic controllers, according to Eurocontrol.

The two new regulations are contentious. Europe’s airline associations jointly with the International Air Transport Association last month asked European Commissioner for Transport Siim Kallas to withdraw the proposed regulations. They argue that the new rules will lead to increasing fees for ANS instead of lower charges, as foreseen in the SES legislative package.

The two proposals were tabled by the EC last year to improve and amend shortfalls of the first charging and performance system regulations for ANS, which were adopted in 2011 and cover a three-year reference period, starting Jan. 1, 2012.

However, under pressure of ANSPs and the EU member states, the Commission’s draft proposals were watered down and are a “regressive step” put in place till 2020, the six airline associations stress.

The new proposals, which were acquired by Aviation Week, do not extend the scope of the performance system from the en-route portion of the flight to the full gate-to-gate ANS provision. This will give member states a free hand to raise charges for terminal areas and ground movements through 2019. The current legislation does not address terminal charges, and several states last year made use of the loophole to increase their terminal navigation unit rate. Italy doubled it from €121.50 to €254.34, ($158 to $331), Germany raised it 6.2%, Poland 7%, Hungary 19.8% and Portugal 38.3%.

Also, the full recovery by ANSPs of so-called uncontrollable costs is maintained, and their range was extended. ANSPs will be allowed to fully recoup from airlines costs due to unforeseen changes in national pension laws or pension costs resulting from unforeseen financial market conditions; unforeseen changes in costs or revenues stemming from international agreements; and significant changes in interest rates or loans, which finance costs arising from the provision of ANS.

Following a last-minute suggestion made early February by the U.K. CAA, ANSPs also will be allowed to recover a wider array of restructuring costs from airlines. These charges may include “costs in the process of furloughing employees, closing air traffic control centres, shifting activities to a new location, writing off assets and/or acquiring strategic participations in other air navigation service providers.”

The EC’s Directorate for Transport and Mobility acknowledges the 2015-2019 performance and charging scheme regulations are the result of “compromise” but, it points out, they give the EC a clear mechanism to control ANSP costs.

The Single Sky Committee (SSC) will convene next week to discuss the situation.