UK ATC system is privatized after years of debate, protest

 - May 7, 2008, 7:48 AM

After several years of bitter debate, partial privatization of the UK’s ATC system became a reality on July 27 when the Airline Group completed the acquisition of a 46-percent stake in National Air Traffic Services (NATS). The government has retained a 49-percent stake, with the remaining 5 percent going to NATS employees.

Regional airlines and business aviation lobbyists in Europe will now be watching closely to see if NATS honors previous commitments not to favor major airlines in the management of the ATC system at the expense of smaller operators. Its pledge to make more “efficient” use of the UK’s crowded airspace has been interpreted by some as an intent to give preference to airliners on the grounds that they carry more passengers. The Airline Group consists of Britain’s seven leading airlines, namely British Airways, Virgin Atlantic, BMI British Midland, EasyJet, Airtours, Britannia and Monarch.

The Labour government has raised about $1.1 billion through the deal, including a $70 million cash payment by the Airline Group and the financing facilities that have been arranged through a group of banks. The Airline Group has committed to an investment program worth more than $1.4 billion over the next 10 years.

The first main challenge for NATS’ new private owners is to stem mounting flight delays and ensure that the controversial new en route ATC center at Swanwick in England opens next January. Software problems have resulted in the $980 million facility being more than five years behind schedule and $280 million over budget.

Richard Everitt, formerly group planning director with UK airports group BAA, has been appointed as chief executive of NATS by the Airline Group. He has warned traffic could be further restricted and delayed during the early months of next year as controllers practice procedures at the new Swanwick center. Currently, some 50 controllers are being taken off active duty each week for training.