NATS still vulnerable despite air traffic re-finance plan

NATS still vulnerable despite air traffic re-finance plan

Prospect, the union representing air traffic controllers and engineers, has welcomed the proposed financial re-structuring of National Air Traffic Services announced by the Civil Aviation Authority Economic Regulator. But Prospect warned that NATS remains vulnerable in the event of further shocks to the aviation industry, including the impact of a Gulf war.

Prospect National Secretary, David Luxton, said:

"The relaxation of price controls on NATS and the reduction of NATS’ debts, through an injection of capital by BAA and the Government, are welcome steps. However, the whole plan is dependent on airlines sharing the downturn risks at a time when their own revenues would be severely hit. The Government should not dodge its responsibility to guarantee NATS’ financial security as an essential part of the economy’s infrastructure.

"War in the Gulf will undoubtedly impact on NATS’ revenues. Whilst the airlines are now committed to meeting 80% of lost revenue if the downturn drops 20% below NATS’ base case, there are no guarantees that the airlines would be able to meet that commitment without the banks and government accepting more of the risk.

"NATS’ costs are largely fixed and so pressure to reduce costs further could only impact on safety, which would be unacceptable to the industry and public. The Government remains a major shareholder in NATS and must honour its long term obligation to secure a viable future for NATS."