Dr Paul Golby CBE FREng
We exist to ensure the skies are a safe and efficient environment for aviation. The Board has been pleased with the company’s safety performance, which has been consistently good throughout the year. Our customers have acknowledged this, as indicated by the strong scores they gave for our safety and operational performance in a recent customer survey.
Martin Rolfe FRAeS
It was a welcome relief to see air traffic volumes recover strongly last summer following the lifting of Covid travel restrictions. We had made a conscious decision during the pandemic to retain the essential skills to support the recovery. This meant we were able to ramp our operation back up very quickly and safely support the level of demand.
- Result: The group reported a profit of £148.5m (2022: £8.7m, after refinancing costs of £41.7m). As for the prior year, the result includes our assessment of the regulatory allowances still to be determined by the CAA for the 2020-22 Covid period shortfall between flight income and costs incurred.
- Price control: In October, the CAA published its initial proposals for NERL’s next price control (NR23: 2023 to 2027). While the CAA recognises the challenge we faced during Covid, we are concerned about material elements of their proposal. We have reiterated the importance of a price control with appropriate resources and risk mitigations to deliver the NR23 plan, critical to the service customers require now and, in the future, which NERL has proposed. The CAA’s decision is expected later in summer 2023.
- Retrospective reconciliation: For the scale of the regulatory allowances outstanding, we expect the CAA will require their recovery over 10 years from 2023, as we also proposed, to ensure affordable charges as the sector recovers after Covid. The outstanding regulatory allowances account for the significant difference between our results and our cash flows since Covid.
- Funding: This year, we completed the refinancing which commenced during Covid with the issue of a further £145m of bonds, repayable in 2033.
- Traffic levels: Flights recovered strongly after the lifting of travel restrictions last summer and stabilised at an average 87% of pre-pandemic levels for the year. Overall, we handled 2.24 million flights (2022: 1.29m) in the year.
- Airprox: There were no risk-bearing airprox attributed to our operation during the financial year
- Sustainability: We received a 3Di (flight efficiency) score of 26.0 for calendar year 2022 (CY 2021: 22.8) against the regulator’s allowance of 27.3. Our net zero target was validated by the Science-based Target initiative.
- Airspace modernisation: We implemented Free Route Airspace over Southwest England and Wales, one of the busiest intersections for international flights
- Airports: In October, we took over the air traffic control and engineering contract at Gatwick Airport after a smooth transition from the previous provider.