EIGHTEENTH REPORT
The Transport, Local Government and the
Regions Committee has agreed to the following Report:
NATIONAL AIR TRAFFIC SERVICES' FINANCES
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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