Originally Posted by
anotherthing
BDiNOU - some salient points, however
your fact number 2 - NATS should never have been put in the position of being so financially bereft in the first place before 9/11. The Labour (our skies are not for sale) governement put us through PPP then to cap it all saddled us with 100s of millions of pounds of debt.
I agree 100%, NATS should not have been saddled with the debt as it was. But thats what was done.
Fact number 3 - Pensions and passing through of costs. We are a service industry, our pension contributions come from profits, we make profits by charging customers. It's semantics by the regulator - pension costs for any company are met by charging the customer.... whetther it's called pass through or not. Barron states that the airlines will not stand paying for our pensions... why not? We as passengers pay towards the pensions of the airline industry!!
You need to understand how the regulator works things out. When NATS submits its accounts the regulator goes through them with a fine tooth comb. NATS has to have put together a business plan which includes things like infrastructure investment, R&D, staff wages, pensions etc. The regulator looks at all the figures and if, for example, NATS underspent 10% on its investment proposal one year then the regulator would cut what it'll allow in the next years investment proposal. From all those figures it works out what NATS are allowed to charge.
Because NATS is a monopoly, regulated by government, it cannot charge what it likes and it would like to include pension costs but the regulator has already clamped down on that for people joining as at 1st Jan 2006. The regulator decides on what NATS may charge. Airlines are not regulated by government in this way and any pension charges they make are (as you rightly state) in the ticket price. Remember that the airlines have to be competitive or they go out of business, so they're squeezing pension costs hard (those airlines that have such schemes).
Hope that makes things clearer.
BD