The UK’s air traffic control supplier will need a “significant reassessment” of its business plan after the competition watchdog reported on a dispute with the aviation regulator.
The Competition and Markets Authority today published for consultation provisional findings of a review of the Civil Aviation Authority’s price control settlement that had been rejected by National Air Traffic Services.
The CAA referred the matter to the CMA for investigation after rejection by NATS of the regulator’s price controls for 2020-24.
The difference in determined costs between the Nats En Route Limited (NERL) plan and those allowed by the CAA was £212 million, out of a total allowance of £2.95 billion.
Nerl had revenue of £733 million in 2018-19.
The CMA has now provisionally suggested price control mechanisms that are “largely in line” with those proposed by the CAA.
However, it made some adjustments in line with submissions by Nats.
Nats said it will review the findings in detail and submit a response to the CMA.
“As a result, Nats believes a significant reassessment of its business plan for the next few years will be required and we will be discussing this with the CAA,” the organisation said.
Nats added: “The CMA acknowledges that its investigation was largely complete before the Covid-19 pandemic was established and that its findings reflect operating conditions before this development.
“It also highlights that the impact of Covid-19 on air traffic volumes will be significant for the year ahead and uncertain in length and duration.”
The CMA is to consult on the provisional findings and invited interested parties to make submissions by April 15.
“It welcomes views from stakeholders on how it should take account of the impact of Covid-19 in its final determination,” the CMA added.
“The CMA will consult with NERL and the CAA on how the reference process should progress, following publication of the provisional findings.”