The Queen's Speech - Privatisation
 

The following was sent out today by NATS Corporate Communications:
"Extract from the Queen’s Speech relating to the Public Private Partnership for NATS:

'A Bill will be reintroduced to establish a Strategic Rail Authority, it will contain measures to improve bus services and reduce road congestion. It will include measures for National Air Traffic Services, to separate safety regulation from operational matters and deliver major investment in the next generation technology.'


The Department of Environment, Transport and the Regions said:

The Bill would allow for the setting up of a Public Private Partnership (PPP) to deliver air traffic services in the UK. Safety is paramount and responsibility for it would remain in the public sector. Safety regulation would be separated from service provision and a new economic regulatory framework established. The Civil Aviation Authority would have responsibility for airspace policy. The PPP would give NATS access to the finance and skills needed to maintain and raise safety standards, and to be a major player in the European air traffic control system.


The DETR also said:

No other model would achieve all of our objectives for NATS - maintaining and improving safety, securing long term investment and access to capital, build on NATS’ operational strengths, broaden its management capability and ensure NATS continues to work in the public interest.


National Air Traffic Services’ response to the announcement:

NATS WELCOMES GOVERNMENT PLAN FOR PRIVATE SECTOR INVOLVEMENT IN AIR TRAFFIC CONTROL

The Chairman of National Air Traffic Services (NATS), Sir Roy McNulty, today welcomed the Government’s announcement in the Queen’s Speech indicating that the Government is to press ahead with its plans to involve the private sector in the running of Britain’s air traffic control system by establishing a public private partnership (PPP).

Sir Roy said: 'We are delighted that the first major milestone leading to the PPP has been successfully cleared and that the Government is committed to the PPP. We now look forward to the Government’s detailed implementation plans and discussions on these plans with all the parties involved.

'We are pleased because we believe the PPP will deliver four crucial benefits.
First, we will have access to the £1 billion we need to build the New Scottish Centre and other investments in modern technology and capacity to cope with growing traffic safely and efficiently.

'Second, we will have access to the broader range of commercial management skills we need. Third, we will be able to compete in international markets and make the most of our reputation as the safest and most efficient air traffic controllers in the world.

'And fourth, we will be able to end the uncertainty that has hung over NATS for the last five years.'

Sir Roy said that the system around the world of nationally-based, state-owned air traffic control systems which has been in place since the end of the Second World War was set to change. It was important that Britain’s competitors did not steal a march on NATS.

'NATS now has a golden opportunity to become an early mover in a market that is being made ripe for development by new satellite technologies and by the ever increasing demands of our airlines and airport customers.'

With the number of air travellers using Britain’s airports expected almost to double over the next decade to 310 million, Sir Roy said that the best way of removing the threat of sharply rising delays was to deliver a successful PPP."

NATS Corporate Communications Department,

I can't believe they are going ahead with this one.

What next....

Auctioning off levels on the NAT Track structure?

"What am I bid for Flight Level 320 on the core track today folks.....ten thousand ...Thank You Sir!......Sold to the chap in the dark glasses at the back of the room!!"

Or how about giving a discount on separation minima.....the more you pay the better you'll be separated....forget to pay and we'll forget all about that thousand foot stuff we give the others......Ha Fu**ing Ha!

So do you think it's a good thing, Mr. Chips?

No.

and the assurances given by NATS management and the Government about guaranteeing our pensions, pay etc are worth as much as Andrew Smith's Labour conference speech when he said " our air is not for sale"

Put it in legislation or we wont believe a word.

try this...
NATS is privatised, and regulated by SRG - no reduction in safety. Along comes "TechBits Plc" "Excuse me NATS, we have invented a new piece of kit that makes ATC even more safe than it is now. Cost you 50 million pounds."
"Err, no thanks, eat into our profits too much"
What could SRG do about that? Nothing. No incentive to invest, no legislation can insist on it....

so, Mr Chips, how does the CAA in its present form regulate airlines?

I am prepared to be corrected. However, can SRG INSIST on "new" safety equipment, or merely ensure MINIMUM standards.
With most privatisations, the money paid by the buyer can be invested into the company (part of it at least). In this case, the money is to be used to fill holes in Prescotts spending plans. How will a new part-owner benefit from thei huge investment?

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"The Hamster my friend, is blowing in the wind"

mr chips,

speculation on my part but it I would imagine that a new SRG would be able to insist on new equipment where necessary to ensure maintenance of standards.
the CAA in its present form does, (I feel), a decent job in regulating UK aviation and the UK holiday flight market through the ATOL scheme. If anything I would suggest that an independent SRG would be more likely to flex its muscle with a privatised NATS than it does at present - if only because no-one wants another Paddington. Does anyone complain about SRGs regulation of the numerous "non-NATS" airfields in this country?

As for the proceeds of any sale, from what I've seen the proceeds of previous privatisations have been used to write off the debt accumulated and to pay for tax cuts or perhaps spend on something else. The proposed sale of NATS does not change anything here.
As for benefits to a new owner - these have been well covered in previous threads but no doubt include a large tax allowance for the new parent company by making this investment,lots of scope for cutting costs in support and admin. services - already we've had contracting out of security and the start of a rundown of MOD Police and Fire cover- and of course that big pension surplus.

Fair enough Bill, I take your point about SRG - although there is still quite a strong link between them and NATS, but i guess that there always will be. i am simply not reassured by the "independent regulator" thing - even the lottery is not properly regulated (advertising in breach of agreements etc).

Basically though, i am not convinced that privatisation is a good thing - changes to pay and conditions would be a worry at least.

Having said that, somepractices within NATS need a shake up - we are a wee bit parochial in places....

As someone else said - we could do with more views on this - how many ATC PPRuNers are there?

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"The Hamster my friend, is blowing in the wind"

SRG regulation is (and please feel free to correct me if anyone knows better) fairly lax under the current system. Both in NATS and non-NATS a/d's. WHen was the last time you heard of SRG insisting on new equipment at an airfield?
They wanted (for example) EGAA to have SSR for years and NATS/EGAA simply said no.

When they do find equipment faults (and this is a bit apocryphal) they simply insist they are fixed. They never fine, or actually close (or even restrict) operations until it is fixed.

That system may work ok at the moment (I don't think it does) but it won't work at all come privatisation.

My 10p wasn't meant to be quite so long.

For info...
The Transport Sub-Committee of the Environment, Transport and Regional Affairs Committee will be hearing oral evidence in pursuance of this inquiry in a Committee Room in the Palace of Westminster as follows:

Wednesday 1 December at 4.00 pm British Airline Pilots Association (BALPA)
Guild of Air Pilots and Air Navigators
at 4.40 pm Public and Commercial Services (PCS) Union
Institute of Professionals, Managers and Specialists (IPMS)

Wednesday 8 December at 4.00 pm National Air Traffic Services Limited
at 4.30 pm Civil Aviation Authority (CAA)
at 5.00 pm Ministers and officials from the Department of the Environment, Transport and the Regions

I agree with Bill. CAA/SRG does fine job with UK Airlines & other aviation matters, and if anything is likely to flex its' muscles on NATS as soon as it can to stamp its authority. Safety will always be paramount, NATS will not have any choice...

Other positive from privatisation is that NATS can/will start to get involved in the huge amount of international ATM business that goes on outside of UK & Europe incl helping USA/Africa/India/Russia get themsleves sorted. And in longer term possibly even take over their operations in one way or another. Only privatisation will allow such action....and mark my words, liberalisation and new technology will push this along...

I would hope that soon NATS will be able to build on its already excellent operational & safety record and really develop in to an organisation where employees are truely proud to work....which many might not agree exists in todays climate....

Sorry to disappoint those that disagree .... don't mean to provoke any anger .... just the way I feel....

SRG doing a good job?
How many Airprox's have ended with the recommendation 'SSR for Aldergrove'. It was ruled out each time due to cost for years.
I don't think it's even in now.

What about a vertical presentation of radar data of traffic in the holding stack ?

Still not on the cards.

The government claims this privitisation is different to Railtrack because we have a separate watchdog to govern us already.

That watchdog knows the biggest risk of a mid-air collision is in the stack yet NATS is doing nothing to remedy it.
How will SRG force a new owner to invest in safety when it cannot or will not force the present Nats management to develop and install equipement to make the stacks safe ?

Maybe we'll get our own watchdog like the other privitised utilities - Oftel, Ofwat etc. Could be part of SRG will be revamped into Ofblip or the like, or given this government's love of beaurocracy, maybe 'Ofblip' would oversee SRG overseeing us. And I'm not laughing as I write this either, who knows what will be dreamt up in the wake of the Paddington disaster.

[This message has been edited by Wee Jock (edited 23 November 1999).]

Offair

Dear Vertigo

You say that the greatest risk of collision is in a stack.

Is this correct - have you any evidence to substantiate this statement.

You also say NATS are doing nothing about it.

Tut-tut old boy. You obviously don't have the contacts to inform you what NATS are up to.

how about "offsick" for a NATS regulator?

anyway, intentionally blank and vertigo, I did not mention SRGs current performance. your point about SSR at EGAA is valid but that is precisely why an independent SRG is required. CAA/SRG in its role as airline and holiday regulator may have faults but, maybe I'm wrong, the UK probably has of the worlds best civil aviation fleets and the public in the UK is the least likely to lose its money to dodgy travel companies. Post-privatisation, is the part of SRG that deals with UK ATC going to work to a lower set of standards? I think not...
As an ATCO opposed to PPP I think that regulation post-privatisation is the least of our worries.

"Expert"
A/c 1,000 feet above you, A/c 1,000 feet below you, all wanting to descend. Dangerous? How difficult is this to work out? Are there are incidents in the stacks? level busts? Would a level bust in such a situation be more dangerous than anywhere else? I think this is all fairly obvious, but I'm no expert!
I saw a bit of a programme on Discovery about the Manchester incident. There was a call for smoke hoods, but the CAA didn't act. Just a comment....

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"The Hamster my friend, is blowing in the wind"

ATC expert (sic).
Of course the greatest risk is in the stack. SRG reccomended display of levels many moons ago (over ten years) and NATS are "still looking into it". EGAA see messages passim. Not to mention SMR.

SRG is not going to be given powers that enable it to force a private NATS to buy expensive new equipment. It would be commercial suicide for a plc to buy into a company where they have no control on future expenditure and are unable to increase costs at will.

Zones,

You are having a laugh surely. Or possibly you inhabit the same slightly surreal world as Bill and Roy (appearing in panto at Swanwick this Christmas).

NATS's job is to stop a/c from bumping into each other. Who cares how much money it can make in the developing world doing this - it simply is not relevant.

If (and it is a big if) it does make money "selling it's expertese" it is going to give that money to it's shareholders - it is not going to use it to invest in NATS(UK) - why would it?

I don't care how much the business expands or where it expands to - I am only interested in how safety will be affeccted. And that can only go one way.

Good debate guys, keep it up :)

Just to throw a pebble in the pool, how long do people reckon NATS would survive if it didn't go into the global market and form partnerships with other big players in the next few years ? All the big organisations like ICAO and IATA are calling for a massive reduction in service providers so that pressure will only continue to grow. Prediction is that 5 or so global players need be all that is required to provide complete coverage of the major units.

On safety, it must remain paramount but let's face it, the costs need to remain reasonable and be justified. No point kitting out a 5 place approach unit with SSR for mega millions at somewhere like Popham to take a really silly example. It might provide more safety but at a cost which could not be justified and certainly would not be paid by the customers. I bet with it's safety culture and professionalism NATS will be able to put it's case for safety kit and expenses more than ably to the beancounters. It's the battle to win but I still have to be convinced as to why it can't be.

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PPRuNe Radar
ATC Forum Moderator
[email protected]

Nice email address Int-blank. As an aside, how did you arrange that ?

I think the points Pp.Radar raised provide the neginnings of the answer to your questions Int-blank.

How will NATS feel if they do nothing now, and subsequently responsibility for UK ATC falls to DFS/DGAC or worse the FAA ? Fancy being managed by them ? I doubt it...

The other issue is to use profits from thie growth business to reduce Unit charges to UK Airspace users....

Safety is the prime factor in all of this.

A "private" company's whole existence (in this line of business ie. aviation) depends upon the level of safety it provides. If it doesn't provide the necessary levels, then either i/ customers go away and use competition or preferably ii/ the law (in this case future SRG) steps in and makes the necessary changes in one way or another. If BA, or any other airline/airport etc, weren't safe, then they'd lose business. As I read in Evening Standard the other day : "If you follow the line the nationalised aviation companies are safer, then we'd all be flying Aeroflot or Egyptair!" (or something to that effect).

As for SRG's current ineffectiveness, as described by others above, perhaps this is a symptom of the current "closeness" between CAA & NATS. With Separation, they will get some teeth....

I understand the safety argument used against PPP, but I think that it needs some real substantiation to win me back....I think it's being used as a smokescreen to hide NATS staff's real fears regarding their terms & conditions of employment....

Anyone care to comment ?

The email is web based (like hotmail) and anaon if you make up your details. Don't know how but you can actually get them to SMS your mail to your cell phone all for free. You too can have one at www.****you.co.uk[/url] !

Glad you like it. OOps seems pprune won't let me swear but zones i can't see your adress or i would have sent it off list.

[This message has been edited by intentionally blank (edited 25 November 1999).]

Zones said:

"A "private" company's whole existence (in this line of business ie. aviation) depends upon the level of safety it provides. If it doesn't provide the necessary levels, then either i/ customers go away and use competition or preferably ii/ the law (in this case future SRG) steps in and makes the necessary changes in one way or another."

<RANT ON>

For the record privatised companies care only for one thing - The Stock Market.
You can get away with a loss (Freeserve makes a massive loss but the shares just keep going up. Likewise most 'net companies.) and they still love you.

You can get away with killing people through possible negligence (Railtrack shares went up when they made a profit, despite Paddington et al. Not that I'm using that as an example you understand.) and they love you.

The level of safety that a company provides has NO RELATION to the way they are viewed by the stock market.

The "business will go elsewhere" argument is nonsense. Where exactly? NATS is a monopoly in the area side and a virtual monopoly on the a/d side. And the sort of safety lapses we are talking about are non-attributable anyway. Lack of investment is impossible to prove. Christ you can't even get a conviction when a co. forgets to close the doors at the front of a boat causing it to tip over! How far would you get explaining ATC systems to a jury?

The airline argument is gibberish - they aren't monopolies.

AS for SRG's ineffectiveness. You blame closeness. How are they close to non-state a/d's? Errrm not at all? They are just toothless like all the other regulators. We regulate ourselves to a certain extent and privatised we will see investment in a whole new light.

<RANT OFF>

Thanks for email bit. Will check it out.

As for your comments :

i/ NATS will be sold in trade sale, not floated. Hence the argument about share value is not applicable in this case. In addition ERG will regulate profit levels.

ii/ NATS may be a (95%) monopoly in UK. But we already remain fearful of our Euro cousins in terms of National competitiveness, and at more micro level, when comparing LHR/LGW with AMS,CDG,FRA etc. Poor &/or unsafe service will see them reap the rewards.

iii/ It will not be long before it is conceivable that an airline will be able to chose its routing based upon level of service / cost received from that FIR. We already see it to a certain extent with Scandinavian traffic to South/West europe.

iv/ Airline argument is not gibberish. If anything it is more relevant that they are not monopolies. This is becuase pressures are much higher on them to compete, and hence risk much higher that they will operate unsafely.... which it would seem they manage not to do, especially when compared with many other state run airlines (which are in privatisation trend...)

v/ The fact that you mention "self-regulation" demonstrates how close we currently are, and the need for separation (and I might add: privatisation or not)

vi/ Safety argument still uses railtrack as it's prime example, but fails to mention how dissimilar railways and ATC actually are. It is also arguable that Railways were (more) unsafe pre-privatisation....

vii/ Is there anything to thought that real issue is NATS staff worries about their T's & C's and that is prime anti-PPP motivation ?

viii/ Lastly, does SERCO (which I might add may not be best private company in world, but for purpose of discussion) operate unsafely ? I know they don't pay as well, but are they unsafe ? I'm not sufficiently knowledgable about them to comment, but I ask the question nether the less.

Interesting debate. Lots to say but to keep it readable I'll split it into chunks.

Anyone who wants to know how unsafe holding stacks are need only look at the list of Airprox. Each digest contains class A horror stories. Just leaving / arriving / jumping the stack / complex co-ordination - they are all there.

Zones ( or Mr Wigmore to those of outside the CAA press office )....

You say that we are off to dominate the commercial world of ATC for the greater glory of UK plc. (sounds remarkably like the old Chattaway line). You also say that CANT happen unless we are privatised. At the same time our managers are saying we will do this with alliances with other major ATC companies like DFS.

How do you explain the fact that DFS, Airways Corp,Transport Canada are all in on these acts already and NONE of these are privatised companies ? None of these companies have shares traded on the stock market or available for purchase from the Government.

A simple scenario as to why a privatised ATC service will be less safe than a public one is the choice of route. In a public system a decision is made based on what will be the likely impact of traffic further along, in a privatised system it may well be just a case of does our company get the ANS charges from the sector or not. If the answer is no then the aircraft will be put into the busier sector from which our "company" gets the ANS's, safety won't come into it.

Thanks for the info "2 six 4". Am I right in assuming that "zones" is in the employ of a large authority, involved with civil aviation and based in the UK? Does this mean that the same authority are using these pages as a propaganda tool?

"Oh Dear.......inadequate case!"

Of course I'm sure that what has been written by "zones" is a personnel (sic) opinion, and written outside of company time.

Let's just keep the traffic separated up there, and give the ATCOs the kit they need to do their job. Keep politics and profit out of safety

Davey - couldn't possible mean that.

I guess we will have to wait for zones to reply next week. I forgot the press office closed early on a Friday.

Anyway lets look at regulation.

All this great talk about separating the regulator for the service provider. With 1900 ATCOs at about 85 sites providing ATC services our new super regulator will be bearing down on NATS plc with all its might. Only problem is how many inspectors does SRG have. Probably 10 for the UK. Is that going to change ? Will we see lots more recruited ? Won't happen. NATS will continue to self regulate and SRG will continue to audit. Like any other system of auditing the provider will only let SRG see what they want to be seen.

Pressure on LCEs to sign off the doubtful ATCOs ? You try standing up to some hard nosed commercial manager. Give up your LCE ? You might just as well sign your resignation at the same time.

Have a look at the CHIRP reports and see what commercial pressure really means. Those of us who have friends throughout the aviation industry know the cowboy companies and the corners they cut. Even some very big cowboys. What to SRG do ? ..... Not a lot.

What did they do when NATS decided that Pennine radar would downgrade their services from RAS to RIS ? Wasn't that a case of providing a lesser service to aircraft ? SRG did nothing. Having set the precedent they could not do anything when NATS plc decides to further downgrade to FIS. We have all these well trained FISOs at LATCC and they cost less than your average ATCO. Try explaining that complicated story to the press. They wont understand and when two aircraft hit in the FIR it will be the pilots fault for not flying in the airways.

In 5 years time what will our SRG inspectors know about modern ATC ? There will be no cross flow of ATCOs to keep up their experience levels. At least the Flight Inspectors get to fly for real some times. In 10 years most of our inspectors will only vaguely remember what a radar sector was like to work on. How will they then seriously challenge NATS plc and make them change anything.

Couldn't agree more with "2-six-4".

It's Sunday here now, come on "zones"......long time no "e"!!

When was the last time the present SRG chaps plugged in to a sector to make the decisions? Are they required to do a certain amount of simulator time to keep up their currency?

Will the new NATS PLC be paying you ATCOs the same as senior jet captains? If you guys are looking after 20-30 shiny big birds, I reckon you should be on 20-30 times the average wage of the crews. That is what responsibility payments are all about in my side of the business.

While we wait for the press office to finish their long weekend my MP tells me that the Bill for privatisation will be published on 1st or 2nd December.

It should make interesting reading.

Hello everybody. Glad I can be the source of some amusement...although getting somewhat tedious.

ATCO, Engineer, Manager, Beancounter, Mr Wigmore's alter ego or just one of the hired help - it doesn't matter who I am....I have an opinion, and a right to anonymously voice it here just like everybody else. No one has to agree with me...and certainly it won't make the slightest difference to what happens...

I am glad however to be part of this interesting debate, and I certainly think that quite a few comments have enlightened me, for I will admit some of my views are potentially naive, (although not without foundation)

Not to admit any defeat....far from it...just to admit I am better educated about the issues as a result of your comments - many thanks !

Now back to the discussion, the next thing that I pick up from the points made is that it is perhaps the Regulators that need some attention as opposed to NATS. Hopefully this will come around - one way or another.

Anyway - anyone else out there going to join the discussion ? It's getting a bit monotonous me versus the rest...

All the brest
Z.

P.S. As much as I enjoy Pprune, I got better things to do on weekend than surf the web, hence my abstinence....

Zones,
i) NATS may be sold in a trade sale. If so it will be bought by a PLC. Which will be listed on the markets. No matter how small a proportion of the buyer NATS is it will still have an effect. It will be also listed on a specialist market so that employees shares have a "value".

ii) To view our European colleagues as competitors is nonsense. They will not ensure safety as they will only get thier chance if we are unsafe. IE if we have a atc fault incident.
NATS may lose the area "franchise" but in reality this is rubbish and you know it.

iii) Hmmmm state run versus private. I think you are reffering to the Air Chinas of this world versus BA. What about Valujet? China and Aeroflot are unsafe due lack of cash. Valujet was premeditated - that is what a profit motive can do - and the FAA is hardly spineless.

Serco pay quite well. In places better than NATS. AS for unsafe I wouldn't like to comment. Their standard eqipment fit for a/d ATC is pretty low so that would not be an issue. (more is the problem - Bill and Roy believe SSR is not a safety issue. Although that view has changed recently I believe). I've heard they are a bit lax with SCRATCOH. But that would be the ATCO's fault in your regulated world.



[This message has been edited by intentionally blank (edited 30 November 1999).]