Privatised ANSP
 

Must be difficult times with income falling. One assumes the governments will step in.

This is exactly the point that both private business and governments don't like to talk about re privatisation of services that have been traditionally provided by governments. In the past decades these have included hospitals, prisons and, in aviation, airports and ANSPs. There already instances wherein a private operator went bankrupt or was otherwise unable financially to continue operating (a failed experiment in Texas re privatised prisons comes to mind). They key, to me at least, is the question of privatisation of "critical infrastructure'. Meaning those services that, if non-functional, have an immediate, significant and unacceptable effect on the country or society. Obviously prisons, and most hospitals, are examples of institutions or services that must continue to operate at some level. I.e. government cannot simply say, "We'll just let it close and grow mouldy." Clearly there are examples in aviation: A particular airport or airport control tower could close unexpectedly and not result in a national crisis. But an ACC? Or an international airport (there are countries that have privatised their only international airport -- a capital city). If that operator ceases operations one morning, what then? When that very question is brought up at discussions about privatisation of "critical infrastructure" the question is either met with blank stares and silence, or someone says "Well, the government would have to immediately step in, wouldn't they?". Yes, they would - if they can.

In the UK they're all privatised including NATS; which one are you referring to?

About 20 years ago a recently privatised over-leveraged ANSP ran out of money. To save face the government sold off a little bit more to give the appearance of success. Despite privatisation the ANSP has no control over charging and the government is currently pushing a scheme which would bankrupt the ANSP in the event of a downturn. Oddly, the “gold-standard” branch of government in charge of squeezing the purse strings is also in charge of safety.

I don’t believe all you’ve said to be true @DanDare (the government changed the regulatory mechanisms after 9-11 as well as selling down the further share to invest as you note, plus, the regulatory environment includes a cap and collar on income that limits gains and losses - businesses should manage risks to pre-empt their exposure to risks such as pandemic. Whilst charging in many cases is currently done using the Eurocontrol charging formula, there are several areas (I can think of three) where this ANSP sets its own basis of charging (following consultation with airlines and regulators of course).

I understand your rhetoric, but simply displacing facts with opinion serves only to mislead those who aren’t informed.

and in case of volcanoes stopping flights for three weeks too?

”Hey airlines, we’re just going to increase our charges by 50% this year to save for a black swan event”, I can imagine how that would play with Messers O’Leary, Cruz, Etc.

Let's face it: there are not many "companies" like ANSP's that make 20% returns so please let them go bust and be replaced by proper companies that are paid extra when they do a good service. ANSP's are the top paid civil servants in some countries and that are messing up all the efficiencies that aviation could make overnight if we made it a true single european sky.

RANT over

Every company has a choice (actually, an obligation to its shareholders) to record, manage or mitigate risk (including risks that aren’t within their control). They can use reserves (undistributed profits, whatever term you’d choose to use) to fill any revenue/income/cash flow hole .... or, as generations of our elders would put it, to “save for a rainy day”. Generally, this is managed using reserves, borrowing that can be drawn down, and in having gearing at the right level (there are more choices but let’s keep it simple).

In terms of your concern for Mssrs O’Leary, Cruz et al, and as an IATA colleague and customer frequently points out to me, “the airlines pay for everything” ... so whether they pay before or afterwards, it’s always their money that’s used (!)

‘just a thought here .... when you pay them “extra when they do a good service” - won’t that make their returns higher than the regulated margin (like happens in a privatised ANSP) ? That would make your point a self-defeating argument, and also incredibly unpopular amongst the women and men who do a brilliant job every day keeping our skies safe when you let their employer go bust (no ?).

So with regards to the C word..

What do you think the reaction will be if and when (hopefully never) someone at an ATC unit catches it?
Quarantine a whole ATC unit? What if it's an ACC?

Surely its inevitable that someone within ATC catches it somewhere! Suppose different employers will have different plans in place. At the rate things are going there won't be that many flights disrupted if there's no controllers anyway! We are on permanent disinfection mode in my unit, hand washing and sanitising everything including phones and touch panels. Are we just kidding ourselves, who knows?

The real question and debate amongst my colleagues is what state is ATC going to be in when this is all over. Airports are going to want to cut costs drastically over the next while, contracts are going to come under immense pressure - both NATS and private ANSPs. Reduce ATC staff to the bone now with redundancies and it'll be difficult to get back up and running again if traffic levels recover, maybe traffic levels will take so long to recover it won't matter. Lots of questions but no-one with answers at this stage, not a good time to be in the business.

The ANSP I work for has a 3.5% margin....dunno what one you are thinking of!

One reaction.... Eurocontrol

From the Eurocontrol Network Portal today :

Aerodromes:

GCXO (Tenerife North), GCLP (Gran Canaria), GCTS (Tenerife South)
High delays for arrival traffic due to COVID-19 reduced staffing throughout the day.

LEPA (Palma)
Moderate delays for arrivals due to COVID-19 reduced staffing.


Airspace:

LECB (Barcelona)
Delays throughout the day in several sectors (Levante sector, high delays) due to COVID-19 reduced staffing.

LECM (Madrid)
Pamplona , Domingo & Toledo sector's regulated throughout the day due to reduced staffing (COVID-19).
High delays.

NM will offer RRP's where available.


NMOC Brussels