Memorandum by The Guild of Air Pilots
and Air Navigators (PPP 07)
THE PROPOSED PUBLIC PRIVATE PARTNERSHIP FOR
NATS
Firstly, may we apologise for a "late"
submission on this matter. However, the telephone call from your
office and subsequent fax of the 12, was the first we knew of
the request for comments—the Press Notice dated 23 July
1999 has not been received.
The Guild of Air Pilots and Air Navigators has
much pleasure in presenting the following comments on the proposal,
which are a synopsis and updating of the views sent to the DETR
in January 1999.
GENERAL
1.1 Safety is paramount. Continuous safety
improvement must be achieved.
1.2 NATS is an integrated part of a global
web of ATC service providers. In this respect it is unique among
those businesses proposed for or already "privatised".
1.3 Whatever arrangement is chosen as "the
way forward" (privatisation, corporatisation, public/private
partnership or public/trust, we believe that any further delay
or uncertainty could cause serious problems.
1.4 Costs of regulation should not be increased
unless there is a very clear public benefit as a result. A "Privatised"
NATS utilising modern management techniques should be able to
achieve increased safety at a lower cost.
1.5 Consistency with developments in international
regulation must be achieved.
1.6 The Aeronautical Information Service,
required by international treaty, should remain a UK government
function delegated to the CAA (probably as a part of the Directorate
of Airspace Policy).
2. THE WAY
FORWARD
2.1 Finance
2.1.1 Of the seven points given in paragraph
5 of the DETR Consultation document "Reasons for the Partnership",
at least the first five could be equally well addressed within
the current framework. Only point 7—other transport schemes
would benefit from the sale proceeds—could not be met, and
in itself is not sufficient reason to justify the PPP proposal.
2.1.2 The case for a public private partnership
has not been proved. We would agree that a PFI approach is not
appropriate, but would suggest that while there were strong arguments
to support "Corporatisation" on the New Zealand model
and other countries, it would now appear that controlled "privatisation"
offers the best way forward. We see no logical argument why NATS
should not be freed from the PSBR in a manner similar to that
for the Post Office and the best practices of private industry
introduced in a manner similar to that which pertained in British
Airways in the last few years prior to privatisation.
2.1.3 However, on the assumption that Treasury
have closed their minds to a similar exemption, we believe, that
so far as is possible, the 51 per cent shareholding should be
sold to an entity which does not seek to maximise profits for
the shareholders. It is not appropriate that a monopoly supplier
of a safety critical service, should be striving to maximise shareholders
profits.
2.1.4 Therefore, so far as is possible,
the majority shareholding should be sold to an entity which is
either "non-profit" making or seeks only a minimal return.
2.1.5 However, should a sale to a consortium
of airlines be considered, assurances will be required that "ATC
preference" will not be given to contributing airlines, ie
there should be no conflict of interest.
2.1.6 There is a generally held view by
the operators, and indeed other interested parties, that NATS
would benefit considerably from private sector management expertise,
particularly in the financial and project management fields. Numerous
examples have been cited of the lack of empowerment of NATS managers
to make decisions at meetings in response to operators' requests.
This results in excessive delays over the implementation of changes
eg the introduction of ACARS based ATIS.
2 SAFETY REGULATION
2.2.1 Safety Regulation of NATS must remain
with SRG so that specialist expertise is not diluted. Moving this
function elsewhere eg to the HSE would be detrimental in dealing
with the international aspects of civil aviation and an overall
transport authority could have significant problems in allocating
costs, which under current arrangements are fully recoverable
from industry.
2.2.2 It is important that specialist expertise
is not diluted. Moving this vital function elsewhere eg to the
HSE, would be detrimental in dealing with the international aspects
of civil aviation and an overall transport authority could have
significant problems in allocating costs, which under current
arrangements are essentially fully recoverable from industry.
2.2.3 The Secretary of State should resist
calls for aviation safety regulation to move to a new "Transport
Safety Authority"—it is better to have a dedicated
aviation authority to deal with this important issue than a new
complex bureaucracy, with aviation as but one part.
C L Hodgkinson
Captain, FRAeS
Technical Director
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