David Learmount/LONDON
Control of the UK's National Air Traffic Services (NATS) has been awarded to the Airline Group. The consortium, made up of the country's leading airlines, is pledging to invest to increase domestic air traffic capacity, and confirms that NATS' new financial flexibility will allow it to bid for overseas contracts.
The repercussions of a private organisation taking control of a key European air traffic services (ATS) provider could be huge. Airline Group (and BMI British Midland) chairman Sir Michael Bishop says its goal will be "the introduction of greater capacity into the business" while "maintaining the highest levels of integrity and safety", but he hints at wider ambitions: "We want others to see what this model can achieve, making it a catalyst for improvement in European ATS."
While the Airline Group will run NATS on a "not for commercial return" basis, this rule applies to the licensed part of the business - comprising en route and oceanic ATS - and not to airport-based air traffic control (ATC), for which NATS bids against other providers. Airport ATC contributed 13.5% of NATS' ATS turnover last year, and with restrictions removed from its ability to raise funds, the business could be expanded, allowing it to exploit opportunities abroad.
The group says NATS will be able to increase co-operation with "like-minded" authorities - identifying these as the Irish Aviation Authority, Germany's DFS, Belgium's Belgo Control, the Icelandic Civil Aviation Authority and ATC in the Netherlands. Progress toward a 'single European sky', the objective of airlines and Brussels, is unlikely to be affected in the short term.
Profits from NATS' licensed business will see dividends paid to its other shareholders - the UK Government and NATS employees - but the group's profit will be invested as part of a promised £1 billion ($1.4 billion) capital injection due over the next seven years.
The Airline Group, formed of Airtours, Britannia Airways, British Airways, BMI British Midland, EasyJet, Monarch Airlines and Virgin Atlantic Airways, all with equal holdings and voting power, now has a 46% shareholding in NATS acquired for £800 million, giving it management control. The UK Government retains a 49% share, with employees taking 5%. Shares in NATS will not be listed. Boeing joined the group late in its bid. It has no shareholding, but an alliance offering advanced integrated ATM systems research. The Irish Aviation Authority is the Group's ATM consultant, with the UK's BT its technology partner. The "not for commercial return" policy does not preclude profits, but the group claims it launched its bid to improve NATS and increase its capacity, rather than to maximise financial return. The group indicated early in the bidding that it would seek an independent chairman, but neither Bishop nor the Group will confirm this plan. Transport Minister Lord Macdonald says the Airline Group "made the best offer" out of three bidders who met "all the criteria" for the public/ private partnership. Shares have been exchanged and contracts signed, with the deal to close in June. The European Commission will review the agreement, but is expected to approve it.Source: Flight International
