COVID-19: Federal Council supports Skyguide with a loan

The Federal Council

Bern, 30.06.2021 - The COVID-19 pandemic has massively restricted air traffic movements, causing Skyguide's air traffic control fee revenue to decline sharply. During its meeting on 30 June 2021, the Federal Council provided specific details of the financial stabilisation of Skyguide in 2021 and allocated additional funds for 2022 in order to prevent a liquidity shortfall. The Confederation is thus committing a total of CHF 500 million, with CHF 350 million of this set to flow back according to current estimates. The capitalisation is subject to conditions.

Skyguide monitors Swiss civil and military airspace and is owned by the Confederation. It is mainly financed by fees for arrivals and departures and for overflights through Swiss airspace. The COVID-19 pandemic caused a sharp drop in air traffic and thus in Skyguide's revenue.

To stabilise the air traffic control company's finances, the Confederation increased its net assets/equity by CHF 150 million in autumn 2020. A further CHF 250 million was budgeted for 2021, although the specific amount and the type of fund use were left open and dependent on further developments. During its meeting on 30 June 2021, the Federal Council decided to provide the full amount of CHF 250 million foreseen for 2021 in the form of a loan. To avoid capital cover problems, the Confederation is prepared to grant Skyguide (partial) subordination on the 2021 loan. A further CHF 100 million is set to be requested in the 2022 budget. The specific needs and use of these funds will once again depend on further developments and will not be determined until 2022. These stabilisation measures will allow Skyguide to avoid a liquidity shortfall in the short term. In the long term, the company's capitalisation should be secured, enabling it to repay the loan.

Based on the European Commission's decision of November 2020, air traffic control companies may, from 2023 onwards, charge airlines for the losses incurred as a result of the traffic declines in 2020 and 2021 (at Skyguide: an estimated CHF 280 mn), spreading the amounts out in subsequent years. In addition, it should be possible to start charging airlines in full again in 2022. However, efficiency requirements must be met, i.e. fewer costs may be charged on an ongoing basis.

Last year, the Confederation called for savings measures amounting to some CHF 100 million as a condition for financial support for Skyguide. These savings measures will have to be increased as a result of the EU's efficiency requirements for passing on air traffic control companies' costs. Skyguide is to present the Confederation with additional cost-saving options, while maintaining its safety standards. Furthermore, the Federal Council expects Skyguide to work with the unions to draw up a joint plan by the end of 2021 for raising the retirement age of air traffic controllers to at least 60 in order to ease the financial burden on Skyguide in the long term. In view of the company's tight financial situation in the longer term, cost-effective solutions are to be sought for this.

Address for enquiries

Philipp Rohr, Communications
Federal Finance Administration FFA
Tel. +41 58 465 16 06, [email protected]

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The Federal Council
https://www.admin.ch/gov/en/start.html

Federal Finance Administration
http://www.efv.admin.ch

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