Select Committee on Transport, Local Government and the Regions Eighteenth Report


The Transport, Local Government and the Regions Committee has agreed to the following Report:


I. Introduction

1. National Air Traffic Services (NATS) was part privatised by a public-private partnership (PPP) on 26 July 2001.[1] The downturn in international air transport caused by the 11 September terrorist attacks in the United States put severe pressure on the company's finances. In February 2002, NATS approached the Government for financial support. The Transport Sub-Committee announced the inquiry on 8 March 2002. We took oral evidence from NATS, the Civil Aviation Authority (CAA), Prospect union and Mr David Jamieson MP, Minister for Aviation.[2] We are grateful to all those who provided written or oral evidence to the inquiry, and to our specialist adviser Mr Laurie Price.

2. This inquiry was prompted by the financial difficulties facing NATS, and concerns about their possible impact on the safe and efficient operation of air traffic services in the United Kingdom. In this Report we consider the state of NATS' finances, and in particular the financial structure of the company created by the PPP. We also consider NATS' applications to the CAA to revise the Eurocontrol Charge Control, and its new business plan.

1   Ev. p 45. Under the PPP deal, 46 per cent of the shares in NATS were sold to the Airline Group, a consortium of seven airlines consisting of British Airways, British Midland, Virgin, Britannia, Monarch, EasyJet and Airtours. The Government retained 49 per cent of the shares (with rights giving it voting control) and the remaining 5 per cent were held in an employee trust. The receipts to Government on the establishment of the PPP were £765 million. See QQ 388-389. Back

2   The Transport Sub-Committee held two evidence sessions, on 1 May and 11 June 2002, during which it took evidence from Mr Chris Gibson-Smith, Chairman, Mr Richard Everitt, Chief Executive and Mr Chris Chisholm, Chief Operating Officer, National Air Traffic Services; Sir Roy McNulty, Chairman and Mr Doug Andrew, Group Director of Economic Regulation, Civil Aviation Authority; Mr Ian Findlay, National Officer, Mr Andy Mooney, Secretary, ATSS Engineering, Mr Laurence King, President of the ATCOs Branch, and Mr Dave Cartey, Branch Executive Member, Prospect; and Mr David Jamison MP, Parliamentary Under-Secretary of State, Aviation, Mr Roy Griffins Director General, Civil Aviation and Mr Ian McBrayne, Divisional Manager, Civil Aviation Division, Department for Transport (previously Department for Transport, Local Government and the Regions). Back

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Prepared 30 July 2002