Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 220 - 224)



  220. Given that the Government received £750 million for selling 46 per cent of NATS off into the private sector and the Airline Group are asking for £300 million of that back effectively, do you think there is an argument for revisiting the status of NATS and to restructure that status?
  (Mr Findlay) We have always said that we did not think this was a way forward but had accepted that the Government had made a decision and we have worked very closely with the Airline Group since. We have seen the business case and we have been involved in those discussions. The difference would be certainly that the Government would be a true partner because the Government walked away as soon as they sold it to Airline Group and we have always said if this was going to be a partnership it should be a partnership and the Government cannot just walk away.

  221. So if the Government were to consider that request favourably there should be some quid pro quo, that is what you are saying?
  (Mr Findlay) Absolutely.

  222. My last question is are NATS still suffering from a shortage of qualified air traffic controllers and what should be done about it if that is the case?
  (Mr Findlay) They are still finding it difficult to recruit numbers of air traffic controllers and train them. I am sure we would get the answer from NATS "No, we have got enough controllers to do the job", but we still have shortages and there is a shortage coming up in the future that needs to be bridged. The important thing is at this point in time, because of the flattening out of the growth in air traffic, this is the time to get ahead of the game. This is why we should be making sure now that, in fact, we recruit and train and make sure that we have got an infrastructure that can cope. One of the things has been that the capacity in the New Scottish Centre would let that growth continue because in the Scottish Lowlands airports the growth was 16 per cent in November. It is very patchy but it is numbers of planes. As we have explained, the smaller plane does not attract the same revenue and what we are suggesting is we need to visit that because an air traffic movement is an air traffic movement.

Mrs Ellman

  223. What is the single most important thing the Government can do now to assist the airline industry in its work?
  (Mr McGurk) The single most important thing they can do to assist the airline industry might not necessarily be the single most important thing they can do to assist the airline employees. If I concentrate on one thing that would not make the situation worse, that is if the Government does not take what we believe is an unduly indulgent attitude towards wet leasing where they allow airlines to wet lease aircraft as part of a new business model which is to minimise the crew through the winter on what is effectively a winter crewing model and then wet lease the aircraft in from Iceland, Cyprus, EU countries, non-EU countries. We use the term "flag carriers of convenience", that is effectively what is happening. Another issue is in the individual labour market aspect for pilots. The Government needs to ensure that in relation to the work permit legislation, which is something that we have been involved in the discussions of and supported the use of work permits where it is appropriate, where there are defined labour market shortages and training effort is occurring there is no excuse for work permits to be issued to external pilots and flight crew whilst there is a glut of unemployed pilots. One of the issues about the recovery is when the industry recovers the airlines will require the same inputs so they can preserve market share. Although the airlines may tell you they will only pursue profitable traffic they will, in fact, pursue market share because that is the logic of the airline industry cycle. When they do they will hire pilots and that pool of pilots will very soon become a glut. If there was any complacency in the industry about the fact that we do not have to worry about the perennial training problem of pilots then this gives us breathing space but it still does not solve the problem. We are still looking at the expansion of low cost carriers with the recovery of every other type of carrier, consolidation, which may well benefit British carriers in the long run, we are still looking at a massive shortfall of pilots by 2010. We need to make the opportunities for training available for people who want to be pilots rather than people who have £50,000 to spend on their individual training. We have made some suggestions on how that can be facilitated.
  (Mr Findlay) I think the easy answer is give NATS the £300 million and look at the structure.


  224. I think you have summed up the situation extremely well. I apologise for having appeared to rush you in at the end. Can I say that we shall be using a lot of your writ10 evidence and if we do have any other awkward questions may we send them to you?
  (Mr Findlay) Absolutely.

  Chairman: Thank you very much indeed for being so tolerant.

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