Examination of Witnesses (Questions 220
WEDNESDAY 19 DECEMBER 2001
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.
223. What is the single most important thing
the Government can do now to assist the airline industry in its
(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