Originally Posted by
Neo380
Yes, it’s a competitive environment, but we do know exactly when, how and why it went wrong. And even NERL has to justify it costs, so when at Reporting Period 3 it was asked to enact performance improvements, a very normal business practice, and replied that ‘it was not in the country’s or the business’s (sic) interests to do that’, we saw exactly the non-competitive, market-rigging stranglehold NATS has on the ‘market’ for what it is. (Apologies, but not really, if the truth hurts).
We've had this discussion before on a different thread and it is in no way relevant to whatever is happening at Gatwick but for the benefit of those who didn't plough through that thread.
The amount that NATS is allowed to charge for its en-route services, ie the Eurocontrol unit charge, is set every 5 years. The CAA sets the rate, the customers (airlines) and NATS and others submit their contributions to that process and the CAA produces a draft recommendation. NATS can accept that recommendation or appeal. If it wishes it can apply to the Competitions and Marketing Authority for a review, that is the arbitration body laid down in the process.
It would come as no surprise to anybody that the customers, one in particular, and NATS have opposing views as to what the price should be. NATS is entitled to fight its corner during that process and, having accepted well below the rate of inflation price increases in the previous periods, decided to do so for RP3. It was up to the CAA and ultimately the CMA to decide if they had a valid point. It is a monopoly which is why it is regulated. That doesn't mean NATS can't make its point forcefully if it chooses to do so. Ultimately a pandemic threw the market up in the air so we will never know who was right. And if you want a company to have a long term investment you have to give it a long enough licence period to allow it to fund that investment. You could call it a stranglehold but it's an inevitable outcome if you want to remove investment from the public purse.