Beyond the glow of the flares sent up by desperate airlines during the COVID-19 pandemic, air navigation service providers (ANSPs) that generate revenue from the fees they charge are struggling too. 

Recent signals point to the likely outcome that ANSPs, like the airlines they serve, will be significantly downsized, restructured, reimagined—or some combination thereof—once the pandemic subsides.

Nav Canada faces an appeal by WestJet of the 29.5% average rate increase it levied in September following a consultation process. The parties were “in the process of considering mediation,” the Canadian ANSP said Oct. 2; if that effort fails the appeal defaults to the quasi-judicial Canadian Transportation Agency to resolve.

A private company since 1996, Nav Canada is governed by a 15-member board representing airlines, business aviation, the Canadian government and unions. The rate increases are necessary, it says, “to achieve a minimum level of revenue [in] fiscal 2021, thereby facilitating the additional borrowings which are needed to provide Nav Canada with sufficient liquidity to weather the COVID-19 pandemic.” 

Of course, airline passengers won’t be spared any cost increases. Calgary-based WestJet reacted to Nav Canada’s move by raising the ticket surcharges it collects for air traffic services by C$4 ($3.03) to C$7 per passenger depending on the flight duration, effective Sept. 1.

Even after implementing the rate increases and benefitting from the government’s Emergency Wage Subsidy program, Nav Canada said Sept. 22 that it had made the difficult decision to begin layoffs. With a previous reduction of temporary employees in the spring and early retirements, the ANSP has trimmed 720 jobs, or 14% of its work force. The layoffs span all departments “and include most of the current cohort of operational students” learning to become controllers.

Additionally, Nav Canada is closing flight information centers in Winnipeg and Halifax and assessing “the level of service required” at several airports.

“Undoubtedly, the company is in the midst of the toughest moment in its history. Nav Canada is not immune to the economic downturn and severe financial impacts the aviation industry is experiencing,” warns Neil Wilson, its president and CEO.

The situation in Europe is similarly historic. DFS, Germany’s state-owned ANSP, on Sept. 30 estimated that air traffic volume will rise to only 45% of the pre-pandemic level by December—way short of its earlier assumption that traffic would rally to 75% of normal by year’s end. If the current anemic recovery trend continues, “DFS will probably control around 1.5 million flights under instrument flight rules in 2020. This is the lowest value seen in German airspace since reunification; 1.65 million flights were logged in 1991,” it says. The German ANSP now expects that air traffic volume will return to last year’s level in 2025.

UK NATS is downsizing in terms of real estate and personnel, though it assures that it will retain critical infrastructure. The ANSP, a public-private partnership that is 49% owned by the UK government, said Oct. 1 that it is selling a number of dormant radar sites and leasing space at other locations to reduce its costs and raise revenue during the pandemic.

“This is absolutely not about selling off the family silver. We are maintaining full ownership and access to all our critical infrastructure,” assured Paul Hughes, NATS head of assets and development. “But where we have land and accommodation we no longer need, it makes sense to find a better use for it, while also helping us reduce our maintenance and running costs at what remains a very difficult time for the aviation industry.”

In mid-April, NATS received a £92 million ($119 million) loan from Eurocontrol to help cover its operating expenses. This was its share of a package designed to sustain ANSPs after Eurocontrol’s member states agreed to help struggling airlines by deferring €1.3 billion ($1.5 billion) in payments for air traffic services.

With air traffic volume stuck at 40% of normal, the financial boost appears to have dissipated for UK NATS. “In our response to the impact the pandemic is having on the aviation industry, we have prioritized protecting operational jobs to ensure we have the capacity to manage traffic when it returns to 2019 levels,” CEO Martin Rolfe wrote in a Sept. 16 blog post. “That’s why we did not include our controllers in the voluntary redundancy program we launched in August, under which we will sadly say goodbye to several hundred of our non-operational colleagues by November.”

NATS has notified 122 controller trainees at its college in Whiteley, southern England, that it is stopping their instruction. A review of training needs with the Prospect trade union concluded that “there is no realistic scenario in which we will need further trainees from the college until 2022 at the earliest,” explained Rolfe. “In fact, we will not have any capacity to support further new trainees at Swanwick, our biggest operational center, for the next two years.”

Bailouts and retrenchment are widespread across the industry. In September, the Swiss Parliament approved a CHF150 million ($163 million) equity contribution to support ANSP Skyguide, which has experienced a “massive decline” in income during the pandemic. In return for the contribution, the government majority-owned ANSP must implement cost-saving measures and raise the retirement age of its controllers from 56 to at least 60.

Estonian Air Navigation Services has had to make “difficult decisions in order to survive,” CEO Ivar Värk wrote in a Sept. 17 blog post. The state-owned ANSP has suspended all investments, canceled travel and training activities and laid off 20% of its employees, including 20% of controllers.

“The current situation must be viewed as a new reality,” Värk counseled. “We need to rearrange our strategic goals and make plans based on the fact that there will not be a recovery happening in the near future.”