From ‘Our Air Is Not for Sale’ to ‘Airtrack’: The Part Privatization of the UK's Airspac

Abstract

Air traffic in the UK has increased rapidly in the past two decades and is forecast to grow at a rate of 4.3% per annum between 1998 and 2020. The failure to develop the air traffic system in order to cope with this growth has had undesirable consequences, e.g. a rise in flight delays and near misses. Given the investment required in air traffic control systems to cater for this growth, the UK government in 2000 part privatized the National Air Traffic Services (NATS), the body in charge of the UK's airspace in a public–private partnership (PPP). The UK Airline Group acquired 46% of NATS and effective operational control, though the government retains a share in NATS and safety regulation is in the public sector. However, serious doubts about safety were raised during the debate on the PPP. Similar moves towards a commercial operation (i.e. corporatization) of air navigation services have been made in New Zealand and Canada over the past decade and these provide useful insights into the results of the corporatization process. This paper analyses the main issues surrounding the part privatization of NATS. First, it highlights the experience from New Zealand and Canada of the major issues involved in corporatized air navigation services in six different categories: funding, new technology and project management, safety, pricing regime, international opportunities, and customer responsiveness. The likely impacts for NATS given the lessons from New Zealand and Canada are considered. The UK government's provisions for the PPP and their implementation in the post‐PPP NATS are then outlined for these six categories. Finally, the 11 September 2001 terrorist attacks have had major impacts on air travel and their consequences for NATS in the six categories are highlighted. This paper concludes with some of the issues that need to be addressed to ensure the success of the PPP for NATS.