National performance plan rejected by UK provider

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.

1 Comment

  1. NATS refusal of its performance plan really is breathtakingly arrogant. What ‘business’ in the 21 Century really believes that it is excused from making efficiency improvements?! Let’s remember that NATS is 49% owned by UK taxpayers (who could really use the £600m NATS is refusing to release for the NHS or Education), that NATS pays its staff in the top 1% of UK salaries, that NATS still maintains anti-competitive practices and that NATS staff jet around the world in first and business class, while ‘sticking two fingers up’ at the regulator!
    Why isn’t being better ‘in the interests of the UK’? And why do NATS assume that the travelling public have to pay for a wasteful and antiquated service – the UK airspace is the equivalent of the pre-motorway road system? NATS assume that only they can upgrade the airspace, and consequently that they will charge us whatever they want for the privilege (of being 50 years too late!), but they are very wrong, other suppliers and emerging technologies (don’t believe the spin that only NATS is safe, or improving delays – they more than doubled last year alone!) can do a better job, faster and cheaper.
    NATS’s arrogance risks it outgrowing its usefulness; don’t be fooled by the inevitable Father Christmas video, NATS is in the business of gouging its customers, and being dishonest about it – it’s time to push back!

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