Profit for NATS as it marks ten years of PPP

NATS today reports its results for the financial year ended 31 March 2011.  It is now ten years since the company was established as the world’s first part-privatised provider of air navigation services. NATS Holdings Limited (“NHL”) and its subsidiaries (“the NATS group” or “NATS”) reported a turnover of £777.3m (2009/10: £754.9m), and a pre-tax profit of £106.1m (2009/10: £78.3m).  The Company paid dividends of £40m (2009/10: nil).

During the year, the price control review for the economically regulated en route business for the calendar years 2011 to 2014 (control period 3 or CP3) was concluded.  The review represents a balanced outcome for the company and its customers.  It has set challenging service performance and operating cost efficiency targets, with a focus on ensuring that strong past performance is sustained.

Revenues increased as regulatory allowances under the new price control of our regulated business took effect from January 2011, and as a result of better revenues from our economically unregulated business.  NATS has also achieved continuing reductions in its operating cost base over the past year.  In addition:

• 2011 marks the tenth anniversary of the Public Private Partnership.  Over the past decade NATS has invested £1.1bn in renewing infrastructure and new systems; cut NATS-attributable delays by over 95% to just 4.3 seconds per flight today; and reduced underlying controllable operating costs by nearly 30% in real terms in the en route business. Financial performance has improved from a loss of £80m in 2002 to a profit of £106m in 2011.

• New business opportunities are being developed primarily in international ATC towers, technology/infrastructure integration and real time operational information. One example is FerroNATS, a joint venture established with Ferroser to bid for airport tower operations in Spain.

• NATS is on track to be the first ATC provider in the world to establish an environmental performance metric, from next year. In the past financial year, more efficient flight profiles enabled airline savings of 12,000 tonnes of fuel, equivalent to 38,000 tonnes of CO₂ emissions, worth approximately £7.5m at 2011 average 2011 fuel prices (and £/$ exchange rates).

Richard Deakin

Richard Deakin, Chief Executive, said: “We are in a strong position for the future. This is a world class company with a world class future ahead.  And while I’m satisfied with the progress we have made over the past ten years, and the focus we have brought to our business, this is just the start of a much bigger journey reflecting a greater ambition for NATS.

“We have developed a strategy to grow our business, and to ensure that we have the capabilities and skills to enable that growth.  We will focus primarily on growth in the aviation market, an industry where NATS’ reputation and capability set are very strong.

“In the meantime, the new price control effectively secures a £2.2bn contract for the next four years, and the investment required to provide capacity to meet forecast traffic growth. Our customers will continue to benefit from the tough service performance and operating cost efficiency targets set by the CAA to ensure we continue to maintain and improve service.”

NATS (En Route) plc, NATS’ economically regulated subsidiary, reported a profit before tax of £70.8m (2010: £54.9m).  NATS Services Limited reported a profit before tax of £35.6m (2010: £23.3m).

1. An Airprox is a situation in which, in the opinion of a pilot or a controller, the distance between aircraft as well as their relative positions and speed have been such that the safety of the aircraft involved was or may have been compromised.

• NATS Annual Report & Accounts 2011 [pdf]
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