BMI offers NATS stake to Lufthansa

UK carrier BMI is reported to be discussing the sale of its shareholding in air traffic control service NATS to Lufthansa, to meet funding requirements ahead of its own sale to International Airlines Group (IAG).
The Financial Times reports that the move is to maximise its funding before March 31, when the German flag carrier hopes to complete the sale of its UK subsidiary.
Last month, German state-owned Deutsche Flugsicherung (DFS) confirmed reports that it was planning to make a bid for the UK government’s 49 per cent stake in NATS.
The news emerged after media reports suggested DFS had asked investment banks to tender for an advisory role on the bid for the UK air navigation services provider.
DFS recently told Air Traffic Management: “DFS is not giving any interviews regarding the NATS bid at present time … for the time being it is too early to make any statements.”
The UK Government last year said it was planning to further reduce its 49 per cent stake in NATS, the business it co-owns with seven UK airlines and airport operator BAA, in order to help reduce the UK´s national debt.
The Airline Group (AG) of which BMI is a member currently holds a 42 per cent stake in NATS.
The consortium includes British Airways, BMI, EasyJet, Monarch Airlines, Thomas Cook Airlines, Thomson Airways and Virgin Atlantic. UK airport operator BAA holds a 4 per cent and NATS employees hold another 5 per cent stake.
The Airline Group has urged the UK Government not to sell off its entire shareholding, claiming that the reduction in its stake would damage the influence that NATS has in the future development of European ATC.
In a February letter to the UK transport minister, Peter Read, AG chairman, said: “The main point is that the 25 per cent minimum government shareholding is on the basis that NATS needs to have a high degree of influence in Europe.”
Read said reducing NATS´s weight in Europe would enable countries such as France, Germany and Spain to decide the future of the air traffic control industry.
Ailing UK tour operator Thomas Cook was also reported in November to have approached its Airline Group colleagues about a firesale of its 6 per cent stake in NATS worth in the region of £60 million.
One of the obstacles to a quick sale of an individual airline member´s stake, however, is that it requires the agreement of each member as well as the Government.
In a report on the UK Government´s move to reduce its stake, the Centre for Asia Pacific Aviation said: “One should not ignore the possibility that another ANSP, perhaps DFS or NavCanada, might join a consortium to bid for NATS. That would introduce a very different possible scenario, especially with the political pressure in Europe to consolidate ANSPs.”
“The possibility of a stake sale in NATS to DFS is a reversal of a situation from just a few years ago. In 2004/05, it was NATS that was rumoured to be interested in taking a stake in DFS, with the German Government baulking at any further sell-off of its ANSP.
“With Europe entering a new era of airspace co-operation, albeit reluctantly from some quarters, the idea of DFS holding a stake in NATS is not as outlandish as it first seems. NATS, together with Spanish partner Ferrovial, recently won a contract to provide air traffic control services at 10 airports in Spain, through their ferroNATS partnership.”