UK to push ahead with air traffic control sale?

The British Government is reported to be preparing to auction part of its 49 per cent stake in the country’s air traffic control – despite doubts about the exact timing of such a move.

As revealed by Air Traffic Management magazine earlier this year, the Airline Group (AG) – a group of seven airlines that holds 42 per cent in UK air navigation service provider NATS – is now ready reduce its stake to between 18 and 20 per cent after receiving assurances that the state’s share would not fall below 25 per cent.

UK airport operator BAA is also understood to be willing to sell its 4 per cent stake. Together, that could push the stake being offered for sale above 50 per cent should the Government divest a minimum 24 per cent.

The Financial Times has reported that the Government is due to declare its intention to sell next week although the AG chairman Peter Read said an announcment is not anticipated so soon.

“I very much doubt the possibility of a firm view to sell by Government next week. But the Financial Times is convinced. If anything we are less inclined towards a Government announcement next week of that nature, and remain in the dark as to their intentions,” Read told Air Traffic Management.

In January, Read confirmed that if the UK Government went ahead with selling part of its stake in NATS, it could lead to a new owner – possibly Germany’s air traffic control body DFS – taking a controlling interest.

German state-owned Deutsche Flugsicherung (DFS) has admitted it is planning to make a bid for the UK government’s stake following reports late last year that it had approached several investment banks to tender for an advisory role.

Read revealed that the German ANSP had been invited to give a joint presentation to both AG and Government representatives a year ago although talks went no further at that stage.

“They have now been made aware that we are moving pretty close to the point where we will be inviting bids. The recent reports in the media were simply a sign that DFS was getting ready for this in advance by issuing an invitation to tender to a number of banks to prepare some sort of proposition,” said Read at the time.

Other potential candidates include several major banks with infrastructure funds, a general investment fund, some overseas pension funds and several ANSPs, one of which is DFS.

According to Read, the UK Government has been considering two options: to sell 24 per cent leaving it with a 25 per cent stake in NATS and build into the licence certain protections such as a golden share regulating any future onward sale – or to sell nothing. “No alternative arrangement is being looked at,” said Read.

Air Traffic Management magazine spoke to Peter Read at length in its latest issue. Click here if you wish to find out more about subscribing to Air Traffic Management.