UK CAA proposes 26% hike to ATC charges

UK air traffic control charges are set to rise to £2.08 per passenger, an average increase of about 43p or 26%. The UK Civil Aviation Authority (CAA) has outlined its proposed new price controls for NATS (En-Route) plc (NERL), a subsidiary of NATS Holdings.

NERL is the provider of most air traffic control services in the UK and the CAA regulates the prices it can charge airlines for the services it provides in UK airspace. The regulator said the price controls will enable NERL to recover its costs from the COVID-19 pandemic period.

The regulator has proposed price controls that mean that NERL would be forecast to increase the average unit rate for its regulated activities over 2023 to 2027 by about 26%, from £42 to £53 in 2020 prices, or from £47 to £64 in nominal terms.

The CAA adds that despite these increases, NERL’s charges are expected to stay below the average level experienced from 2015 to 2019, before the impact of the pandemic, and should remain broadly in line with its EU counterparts. The new CAA proposals come at the same time its Prospect union members ballot for strike action.

The Provisional Decision also incentivises NERL to deliver environmental improvements, particularly around more efficient flight paths and reductions in disruptive delays.

Andrew Walker, chief economist at the CAA, said: “In setting out this Provisional Decision, we have carefully considered the need for NERL to deliver a resilient and high quality of service. Our price control provides for the resources and investment necessary to deliver this and to allow NERL to plan and modernise its services for the future. In addition, NERL will be allowed to recover the costs that it incurred during the pandemic, consistent with the regulatory arrangements in place at the time.

“Overall, the price controls should ensure that NERL provides an efficient service and value for money. Implementing targets around performance, efficiency and environmental impact will also help deliver an improved airspace system that should benefit everyone.”

In order to change the NERL licence, the CAA must do a statutory consultation under the Transport Act 2000 stating these proposed licence modifications. Following this, it will need to reflect on stakeholder comments and then issue a notice that implements the changes in NERL licence. That notice will likely be in the autumn.

 

Author: FTN Editor

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