Select Committee on Transport, Local Government and the Regions Appendices to the Minutes of Evidence

Memorandum by the Guild of Air Traffic Control Officers (GATCO) (NAT 1)


  1.1  Prior to the tragic events of 11 September 2001, the air transport industry was already experiencing a slow down in growth. Following 11 September, the slow down turned into a collapse of some market sectors and huge reductions in demand across the whole industry sector. The reduction in the use of air transport was expected to be over a prolonged period, pessimists forecasting that it would be as much as three years before confidence was restored. From every direction in the industry there was however an urgent entreaty that air traffic service providers should not cut back, but should use the breathing space to overcome shortfalls in their system capacities and further to get ahead of and to stay ahead of demand when it returned.

  1.2  NATS is in the difficult position that it earns a disproportionate share of its profits from the provision of air traffic services over the North Atlantic. This sector collapsed spectacularly, and the resultant reduction in profits led the financial investors to demand urgent cost reductions in NATS operations. NATS quite understandably concentrated on its safety and operational obligations. Work has also continued to overcome existing shortfalls in capacity. Any cuts fell on its non-operational activities such as management, support, research and engineering operations. It is many of these staff who would have carried out much of the work to enable NATS to get ahead of and to stay ahead of demand through technological advances and innovations.


  2.1  We recommend the Select Committee focus on likely reductions in engineering staff to be implemented under the revised NATS Business Plan, and the impact of completed reductions in contracting research and development staff. Our concern is that reductions will be carried out, (and in respect of R&D staff have already occurred) as a simple "numbers exercise" with financial savings as the sole criteria. The easiest solutions were sought, not necessarily the most practical, and contractors went first irrespective of the relative value of their knowledge and skills. It is erroneous to assume that the core skills in research, development and infrastructure provision in NATS lie with permanent staff. All too often the permanent staff are primarily, the managers of programmes and projects, with many of the essential skills provided by contractors.

  2.2  The impact on NATS R&D is that some decision support and computer assistance tools programmes were in part postponed in haste because the contractors who worked at the heart of these programmes were the easiest to dispose of quickly. It is now impossible quickly to resurrect those programmes.

  2.3  Engineering activity in NATS is carried out in a whole range of areas of the company. Some is indeed involved with maintenance and first line support. Other engineering activity is involved with, for example, the strategic aspects of future air traffic service technologies, safety management, infrastructure provision, system change, NAS (National Airspace System Computer) flight data processing software support and project management. These activities should be assessed separately and any cuts carefully targeted not made on a pro rata basis across the board. The Guild believes that staff reductions on the basis of short-term opportunism should be avoided at all costs.

  2.4  We recommend that the Transport Sub-Committee examine the NATS engineering review which we consider may be driven more by the need to reduce costs at the behest of the banks than the need to maintain the cohesive nature of infrastructure planning and provision required by a major ATS provider.

  2.5  The Guild would remind the Sub-Committee that the four-man advisory team appointed by Sir Roy McNulty to examine the safety proposals of the finalists bidding for the NATS PPP in a minute to ministers that the Nimbus Consortium's bid was ". . . not a satisfactory approach to safety management." The team, which included Phil Bennetts of Safety Management Experts and Jim Passmore (former head of safety for British Airways), was particularly worried about training and work patterns and about reports that some 1,200 air traffic maintenance staff would be made redundant and sub-contractors employed, as happened at Railtrack.


  3.1  The Guild suggests that the Sub-Committee should examine separately, the financial positions of the two NATS companies—NATS En-route Limited (NERL) and NATS Services Limited (NSL). Whilst we acknowledge that the income derived by NERL is significantly down we do not believe this to be the case for NSL. This latter NATS airports business has fixed-price contracts with seven of its 14 airport customers (Belfast Intl, Birmingham, Cardiff, Farnborough, London City, Luton and Manchester) with direct-charging in place at the remainder (Aberdeen, Edinburgh, Gatwick, Glasgow, Heathrow, Southampton and Stansted). Although at a number of airports the aircraft movements are down, we believe these contracts mostly continue to return operating profits.

  3.2  The London airports (excluding City) also generate income for NERL because NSL pays NERL for the provision of Approach Radar services as provided from the London Terminal Control Centre. Therefore, the financial situation particularly as it applies to NSL may not be as dire as it appears.

  3.3  Finally on the specific issue of NATS' finances, the Guild has difficulty with the rationale whereby the Treasury appears willing to approve the payment of some £300 million to the new railway infrastructure company, does not oppose the issue of "Letters of Comfort" to the strategic business partners involved in the proposed London Underground PFI, yet is only prepared to sanction the payment of £30 million as a loan to NATS, and at commercial rates, despite the fact that the Government continues to be the major shareholder in NATS.


  4.1  We mentioned earlier that some decision support and computer assistance tools programmes were postponed. This was in part because the contractors working on those projects could be dispensed with easily. Almost all of the programmes under development to support capacity increases in London Terminal Control were postponed, although to its credit NATS agreed to bring forward the introduction of enhanced surveillance capability by using Mode S radar. To enable NATS to rid itself of the cost of the West Drayton site it was proposed to bring forward the relocation of London Terminal Control to Swanwick. It was assumed that the demand for which the tools were targeted would not be needed so soon, and that as a relocated London Terminal Control would require a new systems platform these programmes could be postponed. What was not expected was that growth would appear to be returning so soon and moreover that the Airline Group would require these tools, and not just because of capacity benefits achieved through optimising runway capacity. These tools would also enable pilots to know with some accuracy their range to touchdown. Such knowledge enables aircraft to fly environmentally beneficial "continuous descent approach" procedures. The loss of the contractors who previously worked on those projects we believe, means that it will take some time to reinstate them.

  4.2  We also mentioned earlier that a disproportionate amount of NATS' profitability is gained from providing jointly (with the Irish) an Oceanic Control service in delegated airspace under contract to ICAO through a Regional Air Navigation Services Agreement. A permanent loss of this contract would presumably have serious financial consequences for NATS. We have already seen the impact on NATS of a short-term collapse in this market. The provision of Oceanic Services is an area of operation that is most suitable for the use of existing technologies, especially ADS and datalink communications between pilots and controllers. These technologies, utilising satellites for both enhanced surveillance and communications relay, remove the need for multiple air traffic service providers over the North Atlantic. Whilst NATS has significant technical competence in this technology it has been slow to implement it operationally and has, as a result, been perceived to be the least ambitious provider over the North Atlantic. It has lost the public relations initiative on this issue and is considered by some in CNS/ATM industry to be vulnerable if a service provision review were to be undertaken by ICAO.

  4.3  One of NATS' competitors—NavCanada—has just implemented an advanced system that includes Gander OACC, which (like Oakland OACC in the US) can utilise ADS and other datalink services for aircraft beyond radar range.

  4.4  Since the UK's auspices of the North Atlantic east of Longitude 30 degrees West is a delegation of responsibility it it not unreasonable to question whether the continued delay to NSC might put NATS in a weakened position if NavCanada (and also perhaps, the Irish Civil Aviation Authority) were able to convince ICAO that they could now provide an enhanced oceanic control service with a consequent improvement to the operation's target level of safety. This could have serious income implications for NERL.


  5.1  Prior to any downturn in business, NATS had ambitions to significantly increase controller recruitment and training. Like many other service providers it has found it difficult to balance the numbers of operational controllers at operational units against the number of those controllers required at training centres to train new entrant controllers. For NATS this problem was exacerbated by the need to coincidentally open its new Swanwick Centre, with its associated training conversion programme. The sudden downturn therefore led NATS to adopt a less ambitious programme for training enroute controllers which the Guild believes could be more easily supported. NATS has therefore, had to curtail ambitious plans to get ahead of known future shortages of controllers.


  This evidence is submitted by the Guild of Air Traffic Control Officers (GATCO) to the House of Commons Select Committee on Transport.

April 2002


ADSAutomatic Dependent Surveillance
CNS/ATMCommunications, Navigation, Surveillance/Air Traffic Management
FIR/UIRFlight Information Region/Upper Information Region
ICAOInternational Civil Aviation Organisation
NavCanadaCanadian not-for-profit Trust Company providing air traffic services
NSCNew Scottish Centre
OACCOceanic Area Control Centre
ShanwickShanwick (Shannon and Prestwick) Oceanic Control Service

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 30 July 2002