British air navigation service provider NATS has rejected its national regulator’s five-year plan, insisting that it is not in the best interests of the United Kingdom, the travelling public or the business.
NATS is subject to economic regulation under both national legislation and the European Union Single European Sky performance scheme which sets targets and incentives in four key performance areas – safety, capacity, environment and cost efficiency – over five-year regulatory cycles.
In preparation for the third reference period (RP3) that runs from 1 January 2020 to 31 December 2024, the UK’s Civil Aviation Authority (CAA) is charged with developing a national performance plan.
Through this, it monitors and enforces NATS’ performance objectives which need to be consistent with EU-wide targets set by the European Commission.
The performance scheme has a broad scope – as well as safety, service and efficiency targets, it also encompasses cost efficiency targets for the Met Office, the CAA itself and the transport ministry to manage and oversee airspace.
In the draft RP3 proposals, the aviation authority agreed that a key strategic driver for NATS during the five-year period would be to support the implementation of the UK’s airspace modernisation strategy, which is intended to deliver a ‘once in a generation’ upgrade to modernise critical national infrastructure – UK airspace – and to deliver a broad range of benefits in all key performance areas.
“Our final RP3 performance plan will also need to provide sufficient flexibility for [NATS] to respond to the uncertainties associated with Brexit,” said the CAA, adding that it hoped that by the time it made final RP3 proposals in summer, any impact associated with Brexit in the context of the performance plan would be better understood.
In line with the regulatory appeal process, after NATS rejected the performance plan, the CAA referred the matter to the national competition authority for redetermination.
“We have made clear,” the air navigation service provider told Air Traffic Management, “that it is not possible to create a business and operational plan that will meet either the day to day service requirements of the national performance plan nor the technology transformation and airspace modernisation that airlines and airports require.”
“In almost 20 years since the partprivatisation of NATS in 2001, we have delivered operational and financial targets, reducing operating costs by almost 40 per cent while significantly improving safety and delay performance. This is the first time we have felt the need to reject the regulator’s five-year plan. It would however be irresponsible of us as a critical national infrastructure service provider and as an employer to accept a plan that we believe is not in the best interests of the UK, the travelling public or the company.”
In the meantime, it said that together with the CAA, it will continue to work to ensure safety and a high quality service are maintained.