Allan Winn/LONDON
SIR CHRISTOPHER Chataway retires from the chairmanship of the UK Civil Aviation Authority at the end of this month. In his five years as chairman, he has overseen a dramatic improvement in efficiency and productivity in an organisation, which, he acknowledges, may in the past have deserved its nickname as the "Campaign Against Aviation".
Chataway's other achievement was to have presided over the CAA during a time of major progress towards harmonisation and integration in Europe, of which he is proud, and during a period of uncertainty over the future of funding for the authority's air-traffic-control service, NATS.
He remains convinced that there is a need for the harmonisation of safety standards. "Obviously, it is crazy on a continent the size of Western Europe that there should be differing safety standards," he says. He is, however, disappointed by the current confusion reigning over the future structure for European safety regulation. "A great deal of effort went into trying to give [the Joint Aviation Authorities] a legal basis, as opposed to just being a club," he says, "but that has come to a juddering halt because of disagreements about the relationship between the JAA and the EU [European Union]."
He insists, that it is important that European countries decide on a proper institution, and a proper structure for that institution, and that progress be made as quickly as possible. He is not convinced, however, that real progress will be made in the next couple of years, saying: "Virtually everybody in the aviation world would accept that this is an area in which we have got to pool sovereignty...but it does need a bit of political will, which is in rather short supply at the moment."
Stretching that desire for common standards to a transatlantic accord is even further away, he says. While accepting that common safety standards between Europe and North America are desirable, he believes that such standards are unlikely to arrive until "...some time next century".
An issue which has generated a lot more heat (and a lot more paper, judging by the number of drafts of the legislation which have appeared so far) than that of harmonised safety standards is that of harmonised pilot-licensing and training standards. Again, he says, the pace of progress has been affected by the "...real difficulty of achieving agreement on a purely voluntary basis, which is the JAA mode".
There is a further complication on this issue, however. "It isn't only a safety issue. It is an industrial issue, a matter between management, and a social issue," he maintains. The only way around the issue's complexities, he says, is to get away from the present voluntary JAA basis. "It needs an organisation with a greater ability and power to halve the talking and take a decision," he says. His frustration at the slow pace of decision-making is obvious: "It just goes on and on. I may be being unduly gloomy, but I am not yet confident that the saga is near an end."
One of the features of UK economic life during Chataway's time as CAA chairman has been the privatisation of the major utilities such as water and electricity, each of which has a Government-appointed economic reg- ulator with overall oversight of standards of service provision and price. It had been the intention of the Conservative Government to privatise the NATS as well, but this has not proved possible. Chataway does not think that initiative is dead. "I think the Government has made it clear that, if re-elected, they would re-introduce proposals for privatisation in the next parliament. There is now general agreement that NATS should be separated from the CAA, and that's not been easy for the Authority to accept. The inclination of organisations is to defend their boundaries against all comers," he says.
In the meantime, however, the CAA still wears a regulator's hat, which has encouraged Chataway to build links with those other regulators, saying: "I've been keen to encourage as much interchange of ideas and information as possible with the utility regulators, because it is an exactly similar job that we are doing. A lot of the same issues come up for us as come up for them."
He hopes that if the NATS is eventually privatised then the CAA will continue to be the economic regulator - and that, "...even if NATS is corporatised by a [future] Labour Government, say, within the public sector, I would hope that there would be an economic regulator." He points out that the CAA is already the economic regulator of the publicly owned Manchester Airport. "I don't think there is any other case of a public-sector entity being subject to this kind of regulation," he says.
Chataway sees continuing uses for the CAA's expertise in this area, even with many of its roles being subsumed eventually by centralised European bodies. One role is in research into the shape of the market and the production of discussion papers from that research; another is in the regulation of fares. "The powers we have to contest fare increases and to require competition are very important: over slots, for instance, we're not going to make progress until there is a way of ensuring that new airlines can get slots at the more congested airports," he says. "I hope that, with the single market, there'll be competition on major routes, but we're a long way from that at present. There must be some check on airlines exploiting their market power," he adds.
There is no doubt in Chataway's mind, however, that there both should be and will be a centralisation of reputation in Europe. "If you want a single market for aviation, it is inevitable that regulation has to be done centrally," he says. He expects that market itself to centralise, through mergers and acquisitions among the airlines, and feels that the EU must be prepared for the new shape of that market.
"We are coming to the end of government willingness and ability to subsidise airlines, so there is more prospect of mergers. What will be vital will be for the Commission not to allow anti-competitive mergers," he says. Where competition has arrived, he says, prices have come down and services have improved, but he accepts that there are thinner routes where competition will not be practical, saying: "I would hope that we might see in Europe as much new competition as there has been in the USA, but I hope we won't see a tolerance of anti-competitive mergers such as were allowed in the USA in the 1980s."
There has been much debate over just how far the European Community's (EC) central powers should go, especially in the vexed question over who should be in charge of negotiating air-services agreements between European countries and the USA. It makes sense, says Chataway, for the EC to have such "external competence", if only "...because we want to see open skies between Europe and North America, with US carriers allowed to operate within Europe and vice-versa. The USA won't agree except on a European basis," he says, adding: "Inevitably, this would require an EU-US deal - the Commission should have external competence on that."
Other than regulation, the CAA's major responsibility (at the moment, at least) is the provision of air-traffic control services in UK airspace, through NATS, which has recently been relaunched as a company wholly owned by the CAA, NATS Ltd. This relaunch is a first step towards establishing NATS as an independent organisation with its own funding arrangements, either under or outside Government control. With the failure of the plan to privatise NATS, there has been much attention focused during Chataway's period of office on how to fund major NATS projects such as the new en route centre at Swanwick. That project is itself running, officially, one year late. Chataway says that it is still unclear just how late it will be: "I don't think we can say we know that the delay will be 'X' months. As things stand, we can cope with [a year], but any further delay would be serious. We are doing all in our power to ensure that it is just one year's delay."
Much more serious is the subject of future funding for projects such as the new Scottish and Oceanic air-traffic-control (ATC) centres. The Government's chosen option is the so-called "Private Finance Initiative" (PFI), under which a private contractor will build the new centre for NATS, and be repaid from ATC revenues over the next 25 years. This is not popular with Chataway.
"One matter I really regret is that we have not resolved, during my time, the future funding of NATS. The PFI is not the long-term answer for the funding of NATS infrastructure," he says, but, because it is the only way available at the moment, "...we are doing our level best to make sure it works in the short term - but we have to find a more appropriate, more secure way of funding investment". What Chataway wants is a "total" change in the UK rules on public-sector borrowing, to enable nationalised industries to borrow in normal commercial markets.
He is keen not to be seen as just complaining for the sake of complaining, saying: "We're not just bellyaching - we're looking for an alternative." His real fear is that the technical expertise built up by the CAA will be lost. "If we are driven right the way down the PFI road, then that will have to be left to the suppliers," he says. "If NATS infrastructure becomes a plethora of PFIs, it will be the suppliers who get the benefit of new technology, not NATS or its customers. If NATS is locked in for 25 years to a supplier of an en route centre, for example, then when there are new developments and cheaper ways of doing things, the supplier will get most of the financial benefits."
Chataway says that the current management of NATS has expended a great deal of effort on standardising and consolidating in recent years, and he fears that "... the whole process would be put into reverse if you've got to proceed by means of a whole variety of PFIs, and all you're allowed to do is specify output requirements".
In general, however, Chataway leaves the CAA in good heart. He points to the transformation of NATS as an organisation, and the authority's achievements in safety and economic regulation as the success stories, but of NATS funding the CAA chairman says: "That is my big disappointment."
Source: Flight International
