DFS Deutsche Flugsicherung GmbH

This report does not constitute a rating action. Overview Key strengths Key risks Critical role as the main air traffic provider for civilian and military flights in Germany. Integral link to the German government. Profitability depends on development of air traffic. However, excess of cost of current years can be recovered in future years via tariff adjustments. Almost certain likelihood of extraordinary support from sole owner Germany. High pension obligations, which are being tackled through a capital market-financed system for new hires. German constitution and the Aviation Act provide legal framework, which makes transition risk of likelihood of support currently irrelevant. Low financial debt. Our assessment of its critical role is based on Germany being the sole owner of DFS

...S&P Global Ratings assesses that DFS Deutsche Flugsicherung GmbH (DFS) has an almost certain likelihood of support based on its critical role for and integral link with Germany. Our assessment of its critical role is based on Germany being the sole owner of DFS and having a legal obligation to provide air traffic control (ATC) services, for which its only provider is DFS. Our assessment of the integral link is supported by DFS essentially acting as an arm of the government with several representatives from different ministries determining the company's strategy. As a result, we view the likelihood of extraordinary government support to the company in the event of stress as almost certain and equalize the ratings on DFS with those of Germany. The German government is willing and able to support DFS. In our opinion, Germany will remain supportive of DFS, and we do not doubt the federal government's propensity to support the company. The government also has sufficient financial resources to...

Full Report