Germany’s DFS delivers positive report for 2016

DFS, the German air navigation service provider, had a positive year in 2016 both economically and operationally, despite the difficult environment.

Operationally, DFS said it maintained the high level of performance for both en-route and terminal services in the areas of safety, efficiency and punctuality. The number of aircraft movements in German airspace again exceeded the three-million mark.

In 2016, the number of IFR flights rose by 2.6 per cent year-on-year to 3.109 million. The DFS Group, with its 5,500 staff, generated revenues of €1.219 billion under IFRS in 2016 (previous year: €1.264 billion). Net income at DFS amounted to €86.6 million (previous year: €123.6 million). The slight decline in revenues and profit primarily reflects the significant reduction in en-route and terminal charges required by regulation at the beginning of 2016.

“DFS can look back on a successful year. We have been confronted with the challenge of maintaining service quality even as costs decline. The year 2016 demonstrated that we can master this challenge successfully. As regards the future, DFS expects to exceed the traffic high reached in 2008 – more than 3.15 million flights – in 2017. We forecast revenues of around €1.16 billion for 2017,” said Klaus-Dieter Scheurle, chairman and chief executive of DFS.

Safety levels in German airspace remained as high as ever, even as the volume of traffic continued to increase.

In 2016, 97.5 per cent of all flights reached their destination without any delays caused by air traffic control. In absolute figures, this means that the average delay per flight due to bad weather, capacity bottlenecks at airports or high traffic volume was 33 seconds in

German airspace. Only about 14 seconds of the total delay were caused by air traffic control. Direct routings played a major role in this with the route flown in German airspace was, on average, only 3.7 km (previous year: 3.8 km) longer than the direct route, a deviation of only 1.12 per cent.

The number of IFR flights in German airspace rose by 2.6 per cent to a total of 3,108,761, again exceeding the three-million mark. The number of overflights above Germany grew at an above-average rate in 2016. These flights now account for 38 per cent (2015: 37.5 per cent) of all flights. 25.8 per cent of IFR flights were either entries to or exits from German airspace.

Only 10.5 per cent of flights were purely domestic. The record number of 3.15 million flights set in 2008 was narrowly missed in 2016. However, based on the traffic volume in the first three months of the year, this record will probably be broken this year. In the first quarter of 2017, the number of flight movements grew by 2.6 per cent over the prior-year period to 685,905. DFS forecasts 3.22 million controlled flights in German airspace for the whole year.

For the business year 2017, DFS said it expects a difficult market despite the general upward trend in air transport. DFS considers that it will be almost impossible to raise the revenues from the regulated core business. DFS launched an ambitious cost-cutting programme to reach its cost targets. Under this programme, DFS aims to reduce its annual operating costs by around 10 per cent by 2019 as compared with 2012.

The programme also involves cuts in personnel, which will be achieved through natural staff turnover. Since 2012, the number of staff has declined from 6,103 to 5,444 (as at 31 March 2017), leading to a decline in staff costs in the financial statements. Personnel expenses are the largest cost item at DFS, amounting to €838.5 million (previous year: €850.6 million).

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