NATS is the UK`s leading provider of air traffic control services. Each year we handle 2.2 million flights and 220 million passengers in UK airspace. In addition to providing services to 14 UK airports, we work in more than 30 countries around the world spanning Europe, the Middle East , Asia and America.
NATS provides air traffic control services at 15 of the UK's biggest airports, and 'en-route' air traffic services for aircraft flying through UK airspace. This year we will handle more than two million flights carrying over 220 million passengers. We compete for our business at the airports and have won all 15 of our contracts by being extremely good at what we do and the service we can offer. In 2005 we won our first overseas contract, for RAF Gibraltar. Our 'en route' business is regulated, and we operate under licence from the Civil Aviation Authority. The terms of our licence, available in full on the CAA website, require NATS to be capable of meeting on a continuous basis any reasonable level of overall demand. We are charged with permitting access to airspace on the part of all users, whilst making the most efficient overall use of airspace.
From 1920s to today
Air traffic control for commercial flights in the UK started in 1920. Croydon was first used as London’s air terminal, but all the controller could do was give the pilot a red or green light for take-off and acknowledge position reports sent by radio.
After the war, ATC became the responsibility of the Ministry of Civil Aviation, and the network of air routes we use today began to develop in the 1950s.
NATS and the CAA
Our forerunner, National Air Traffic Control Services (NATCS), was established in December 1962. It covered civil ATC but liaised with the MoD (RAF) in areas where military traffic needed to cross civilian routes. When the Civil Aviation Authority (CAA) was established in April 1972, NATCS became part of it and shortened its name to NATS.
In 1992 it was recognised that as a service provider NATS should be operated at a distance from its regulator, the CAA. With that in mind, NATS was re-organised into a Companies Act company in April 1996 and became a wholly owned subsidiary of the CAA.
Going public – private
The Public-Private Partnership for NATS was proposed in June 1998, and enshrined in the Transport Act 2000. The Government chose the Airline Group as the preferred partner in March 2001 and the transaction was completed in July 2001 with the sale of 46% to the AG and the devise of 5% to staff. Although the Government retained the balance, the company was finally free of Treasury control.
The aviation industry downturn after 11 September 2001 led to a financial restructuring of NATS. This involved £130 million of additional investment (split between Government and LHR Airports Limited) to reduce borrowings. At the same time, LHR Limited took a 4% shareholding, reducing the Airline Group’s holding to 42%. A £600 million bond issue, successfully completed in October 2003, further reduced our debt.
Going from strength to strength
In 2003, NATS launched its ten-year £1 billion investment programme with the announcement of a complete renewal of its radar network. Since then, we have worked with Nav Canada on a new system for Oceanic control; became the first in Europe to establish a working Functional Airspace Block (FAB) with Irish counterparts; and launched a Joint Venture company with the Spanish to develop the next generation of air traffic management systems for Europe.
“To be the acknowledged global leader in innovative air traffic solutions and airport performance.”
This short video provides an insight to our vision of the future of air traffic management and our role in shaping it:
The market for air traffic management services is changing in response to the long-term growth in aviation. This is placing greater pressure on existing airport and airspace infrastructure just as environmental concerns are making expansion of that infrastructure more challenging.
The European Commission’s ‘Single European Sky’ project is seeking to improve ATM performance, increase integration, improve network performance and ensure that European developments are aligned with the NextGen programme in the USA. We are also seeing increasing liberalisation of the airport tower contract market internationally.
These developments will provide NATS with many exciting opportunities. Traditional service providers focused purely on a low-cost model will lose out to those, like us, who can differentiate themselves through added value services in increasingly complex operational environments.
Within the marketplace, we expect a growing trend towards outsourcing, which will enable us to demonstrate our ability to squeeze maximum use out of runways and airspace. At the same time, changes to International Civil Aviation Organization (ICAO) standards, European legislation and network technology will mean that airports, airlines and air navigation service providers (ANSPs) will need more complete, timely and accurate information, which NATS is well placed to provide.
Many ANSPs and airports will implement major airspace improvements and systems developments over the next decade. This provides opportunities for NATS to help transition new equipment and facilities into operational service, given our experience in this area. Cutbacks in defence budgets are also encouraging innovative thinking in the future provision of military air traffic service provision. NATS has operated a joint and integrated service with the UK’s Ministry of Defence (MoD) for many years and this is a unique differentiator of our capability.
A clear and compelling strategy
In response to these trends we have developed a clear and compelling strategy. This retains and builds on the success of our existing business to realise the opportunities we believe these changes will present. We are clear on which products and which markets offer the best opportunities for manageable risk. We also recognise that these developments may bring increased competition to our domestic market – although we have been encouraged by our significant contract renewals in the past year.
Above all, we must continue to deliver a safe and efficient service to our en route and airport customers, which is essential not only to maintain our UK market position but also to demonstrate our capabilities to new customers.
In addition, our growth is focused on creating successful partnerships in overseas markets to mitigate risk and to support the increased supply of qualified staff to assist in contract delivery. Our win in Spain with our Spanish partner, Ferrovial, is a good example of this strategy.