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Skyguide in 2010: still on course despite exceptional developments

April 13, 2011 - London

skyguide /Skyguide in 2010: still on course despite exceptional developments. Processed and transmitted by Thomson Reuters ONE.The issuer is solely responsible for the content of this announcement.

Geneva, 13 April 2011. Skyguide reports an overall net surplus of CHF 6.1 million for 2010, an increase on the CHF 2.59 million of 2009. The operating result for 2010 amounted to CHF -11.69 million, a decline on the CHF -9.14 million of the prior year that was still within budgeted parameters thanks to continuous cost economies and despite a number of extraordinary events which impacted adversely on earnings. The red-ink nature of the operating result is still due to the well-known structural underfunding of the services provided by skyguide at regional aerodromes and in the adjacent airspace of neighbouring countries delegated to its control. From 2011 onwards, following changes to the corresponding legal parameters, the company should be able to gradually eliminate the accumulated deficit here over the next few years.    


Adverse exogenous factors and a severely-weakened euro
Multiple developments combined to impact directly on the revenues generated by skyguide (Switzerland's joint-stock company for civil and military air navigation services) in 2010. Total traffic volumes showed only slight 0.8% growth on their prior-year levels. "The reasons for this modest increase can be found in the volcanic eruption in Iceland, adverse weather conditions and the strike actions we saw in several European countries," says CEO Daniel Weder. Skyguide also suffered from the weakness of the euro against the Swiss franc: exchange-rate losses depressed results by some CHF 6.4 million for the year as a whole. Total operating revenue for 2010 amounted to CHF 364.86 million, a slight 0.6% increase on the CHF 362.55 million of 2009. The improvement is attributable solely to "other" operating revenue, deriving from sources such as the training provided for employees of outside air navigation service providers and airports. In view of the lower revenues from its air navigation services, skyguide made further efforts to lower its costs, saving some CHF 10 million in the course of the year. The CHF 376.55 million total operating expense was a 1.3% increase on the CHF 371.69 million of 2009. The operating result remained negative at CHF -11.69 million (compared to CHF -9.14 million in 2009). The loss incurred remains attributable to the inadequate remuneration that skyguide currently receives for the air navigation services which it provides in the public interest at Switzerland's regional aerodromes and in the adjoining airspace areas of neighbouring countries that are delegated to its control. The overall net result for the year amounted to a surplus of CHF 6.1 million (compared to CHF 2.59 million the previous year), thanks to non-recurring exceptional income amounts.  


Equipped to compete in Europe
Two recent changes to existing legislation will see skyguide compensated in future for the present funding shortfalls in the services it provides in adjacent airspace areas outside Switzerland and at the country's regional aerodromes. The new compensation arrangements are the result of a partial revision of the Swiss Federal Aviation Act (which entered into effect in 2011) and the adoption of a special funding provision for aviation that has now been approved by both chambers of the Swiss Parliament. "We are extremely pleased to receive this support from the Swiss Confederation and political circles," says Guy Emmenegger, Chairman of the Board of Directors. "With its improved legal framework, skyguide will be able to gradually reduce its cumulative deficit of more than CHF 122 million over the next few years. This is to strengthen our overall position in Europe in the medium term." Thanks to its good operational performance achieved in 2010, skyguide is already well positioned.


Joint centre plans shelved
In view of the broader EU-wide initiative to create a Single European Sky, skyguide has been studying six candidate options for its future operating location(s). One of these - a joint control centre with Germany's and France's air navigation service providers located in the trinational border area near Basel - was examined in more detail in 2010 on behalf of the Swiss, French and German aviation authorities. The study revealed that a joint centre of this kind would be feasible in operational terms, but would offer too few economic benefits if it only resulted in the amalgamation of skyguide's present Dübendorf and Geneva area control centres: the transfer of authority over a few French and German airspace sectors to the proposed new facility would not be sufficient for the project to make financial sense. Given the results of the study, the three national aviation authorities have concluded that the circumstances are not currently propitious for establishing a joint control centre. At the same time, the three air navigation service providers involved have confirmed their desire to further pursue their collaboration within the Functional Airspace Block Europe Central (FABEC) project. "We do not rule out establishing a joint centre or centres some time in the future, either," adds CEO Daniel Weder. "And skyguide remains open to collaborations, and will continue to consider any and all strategic options as and when they emerge."


Geneva and Dübendorf to be further interlinked
The further development of its existing operating locations will remain a key focus of skyguide's actions and activities throughout 2011. Following the completion of the joint control centre feasibility study, a comparison can now be made of the six location options. From the current perspective, a greater harmonisation and interlinking of the two existing control centres in Geneva and Dübendorf seems to be the most promising option. The aim here will be to achieve maximum interoperability between the two centres. This in turn should deliver benefits in terms of safety, security, operating flexibility and cost efficiency. Skyguide will be looking more closely into the modalities of pursuing this option over the next few months.  


The challenges for 2011
Skyguide expects to see moderate air traffic growth of 2.5% to 3% for 2011 as a whole. The situation could become more difficult for the company in business terms if the euro remains weak against the Swiss franc: skyguide incurs 95% of its operating costs in francs, but generates two-thirds of its revenues in euros. The unit rates charged by skyguide for its en-route services have been increasing substantially in euro terms without generating any additional revenue as a result in real (i.e. Swiss-franc) terms. In addition, the possibilities for achieving further cost savings at skyguide are now virtually exhausted; and the company had to increase its route charges at the beginning of 2011 to recoup at least some of the revenues lost. On a brighter note, skyguide will receive federal funds for its insufficiently-remunerated services from 2011 onwards, thanks to the new legal parameters. In view of this, the recent downward trend should have bottomed out in 2010, and overall results are now likely to recover.


Skyguide's 2010 Annual Report is available online at:


swiss air navigation services ltd.
media relations
CH-1215 Geneva 15


phone:   +41 22 417 4008




Skyguide is responsible for providing air navigation services within Swiss airspace and in the airspace of certain adjoining regions in neighbouring countries. The company guides the civil and military aircraft entrusted to its care - around 3 170 flights a day or 1.16 million a year - through some of the busiest and most complex airspace in Europe. Skyguide is a non-profit limited company which has its head office in Geneva. The majority of its shares are held by the Swiss Confederation. The company generated annual operating revenue of some CHF 365 million for 2010, and employs around 1 400 people at 14 locations in Switzerland. Skyguide is also a member, together with its sister organisations in Belgium, France, Germany, Luxembourg and the Netherlands, of the FABEC initiative to create a common functional airspace block that will bring greater efficiency to Central Europe's air traffic management services and activities.


The media release can be downloaded from the following link:

Media release (PDF)

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