Supplementary memorandum by National Air
Traffic Services (NAT 6A)
In the course of the Sub-Committee's hearing
on 1 May, our representatives agreed to provide further information
on the process for securing additional capital, air traffic controller
numbers over the next five years, and changes in staffing levels
in all disciplines over the same period.
As Chris Gibson-Smith explained at the hearing,
an important element of the long-term solution to NATS' financial
position is a proposal to inject additional capital into the company.
The intention is that this will be provided either by the Airline
Group or a third party, and will be matched by Government. The
aim is to secure £50 million or more from private investors,
matched by an equivalent amount from Government. This will enable
the Government to maintain its 49 per cent Crown shareholding.
We are conducting the search for a new investor
on a competitive basis. The process is commercially confidential
and we cannot comment on the involvement of individual companies
at this stage.
In terms of entry criteria, we are adopting
broadly the same framework as was employed for the PPP competition
last year. For NATS, the three key tests are:
suitability in terms of safety impact;
financial robustness of the equity
strategic alignment with NATS' goals.
In addition, the Government will require probity
checks on potential investors to ensure that they are suitable
in all areas, including national security. The selection process
will be thorough and managed in close liaison with the current
shareholders and the lending banks.
Our aim is to ensure that any injection of capital
will have taken place by the end of September, when the short-term
loan facility expires.
The Sub-Committee asked for further information
on staff numbers over the next five years. Our manpower projections
are set out in the NATS Group Business Plan by category of staff.
All figures are as at 31 March each year:
Air Traffic Control Officers
Controller numbers will increase to meet forecast
traffic demand, but the growth in numbers will be offset by planned
improvements in productivity. The totals include student controllers
and other non-operational controllers engaged in planning and
Air Traffic Services Assistants
The number of assistants will reduce with changes in working
practices. Further savings will be achieved through the implementation
of new technologies, automating functions currently performed
Air Traffic Control Engineers
Initial reductions in the number of engineering posts will
be found through general efficiency savings, adjustments to service
level agreements and better control of changes to NATS systems.
Further savings will arise from the phasing out of legacy systems
and deployment of Commercial Off The Shelf (COTS) products, the
collocation of technical support services in Southampton and completion
of the Two Centre Strategy.
Management and Support Staff
The number of management and support staff is anticipated
to reduce significantly as a result of business efficiencies achieved
through a thorough review of the organisation structure, through
implementation of the Accommodation Strategy, and the adoption
of a shared services approach to support functions.
I hope this is helpful. No doubt you will let me know if
you require any further information.
16 May 2002