From the Financial Times.....
Serco shuns UK air traffic control rescue
By Kevin Done, Aerospace Correspondent
Published: May 19 2002 21:17 | Last Updated: May 19 2002 21:17
Serco, the UK facilities management group, has withdrawn from negotiations to provide financial backing for National Air Traffic Services.
The move is a setback for efforts by the government and a group of airlines to find a private sector investor to come to the rescue of Nats with an injection of equity worth up to £50m ($73m).
Serco had been regarded as a front-runner along with BAA, the UK airports group, to take part in the financial restructuring of Nats.
Nats will learn on Monday whether the Civil Aviation Authority, the economic regulator for its monopoly air traffic control services, is likely to provide any financial relief by agreeing to Nats' emergency request to be able to raise its charges to the airlines.
In its application in February, Nats warned that if it was unable to raise the fees it could "ultimately" risk financial collapse and be unable to "meet its liabilities".
The government, which still holds a 49 per cent stake in Nats following the controversial part-privatisation of the UK national air traffic control system last year, has pledged to match further private investment with an additional injection of about £50m of taxpayers' money.
Serco's withdrawal is understood to be due partly to the reluctance of the airline group to cede some of its management control over Nats.
The Airline Group, a consortium of UK airlines led by British Airways and Virgin Atlantic and chaired by Sir Michael Bishop, chairman of BMI British Midland, acquired a 46 per cent stake and management control of Nats last year for £50m.
Nats' present financial crisis was triggered by the sharp fall in airline traffic last year resulting both from economic recession and the impact of the September 11 terrorist attacks in the US.
Serco, which is already a leading player in taking over the out-sourced management of previously state-run organisations, had been aiming to work with Nats to expand its international air traffic control activities.
A computer failure at the new £623m air traffic control centre at Swanwick, Hampshire, brought chaos on Friday to London's airports and disruption to the rest of the UK and continental Europe.
Tens of thousands of passengers were stranded after the cancellation of many flights.
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WF.
(edited because the link to the FT site didn't work)