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Airlines react to the CAA’s approval of NATS price increase

Already in the doghouse over its system failure back in August which caused over 2,000 flight cancellations, NATS is once again in the firing line following the CAA’s approval for the UK air traffic controller to increase its enroute charges.

First proposed in August, the CAA has now approved new price controls that mean that NERL (NATS Enroute) will 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.

Described by Loganair chief executive Johnathan Hinkles as “airway robbery”, the increased charges haven’t gone down well with its customers. “Who says things don’t evolve? We’ve progressed from highway robbery in the 18th century to airway robbery in 2024, based on today’s CAA decision on the UK air traffic control charges NATS can levy,”

Hinkles wrote shortly after the announcement was made. “NATS’ charges went up by 29 per cent this year, as they sought to recover their losses from the pandemic. Who wouldn’t, if you had a regulated monopoly that allowed you to?

“The expectation was that charges for 2024 would go back to normalised levels, plus inflation. Unfortunately, something’s gone badly wrong. Either the inflation index for Venezuela has been used by mistake, or NATS has pulled the wool over the regulator’s eyes.

“This decision is bad news for customers and communities, bad news for the economy – as air fare increases contribute to UK inflation – and bad news for the environment.”

Industry association Airlines UK was also quick to voice its displeasure at the decision. Its chief executive, Tim Alderslade, said the hike in charges was “yet another kick in the teeth for passengers who have been plagued by issues this summer including the August NATS IT failure.”

The group, which represents carriers including British Airways, EasyJet, Jet2, Ryanair, Virgin Atlantic and Tui, said passengers would “inevitably end up footing the bill of millions of pounds for increases.”

“It is clear that a wider independent review into how NATS is regulated is needed to protect passengers and ensure that airlines are not always forced to act as the insurer of last resort and bear millions of pounds of costs for failures that are not their fault,” Alderslade added.

Ryanair’s chief executive Michael O’Leary was also (unsurprisingly) vocal about the price hike, stating: “We are astonished at the CAA’s decision to award NATS another 26% increase in their already high charges after a summer where NATS repeatedly delayed flights due to badly managed staff rosters and mismanaged operations which collapsed altogether on 28 August last in circumstances which remain unexplained.

NATS continues to call for last-minute schedule cuts at Gatwick through Sept and October due to mismanaged rosters in the ATC tower.

“NATS should not be rewarded for its mismanagement with further price increases which will only go to fund more undeserved dividends to its shareholders. What we need in NATS is new and competent management and the Govt should start by sacking the overpaid, but incompetent CEO, Martin Rolfe.

“Ryanair calls on the CAA to reverse this illogical decision to award a 26% price increase to NATS and believes no increase should be awarded until NATS delivers the service it is already being paid for without staff shortages, without capacity restrictions and without complete system shutdowns such as that delivered by Martin Rolfe and his team on 28 August last.”

Author: FTN Editor

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