Airline Group Info

[Davey Clark]

Read on BBC2 Ceefax today, news of an organisation calling itself "Airline Group". Says here it's made up of nine UK airlines who are contemplating the purchase of the 46% stake in NATS that the government has proposed to sell. Anyone out there got any more information on this group? Are they planning to buy the 46% that does NOT include NERC! Can't believe anyone wants a slice of that particular pie.

[Geoff]

Local rag here says Virgin & BA have combined to make a joint offer.
The rest of you pilot types had better have your credit cards ready!!

[POMPI]

I gather that there are currently about 19 interested parties in buying 49% of NATS. It appears that these range from individual companies like National Grid to consortia similar to those you mention. I have heard BT mentioned and also DFS - though for the latter I can imagine that the Sun's headlines would make interesting reading !.
I would have thought that the lawyers and business managers would have a field day with this.
Go to your manager and say 'we ought to buy NATS'
OK how much, Dunno - between £500M and £1Bn, but probably nearer £1Bn. so that's the first step.
What am I getting ? - about 5,000 people, no property (49% remember) of which about 1,000 will be ATCO's by the time this sale comes off. These 1,000 people are where you revenue comes from.
OK what do the rest do ? - Support, 5-1 for support.
Boll**ks to that get rid of half of them then we'll talk about it.
What about catostrophic loss and limit of liability ? - oh we'll have to carry that.
How many layers of management ? - er quite a lot.
Is mangement trusted by the workers - no

All the depertment such as individual purchashing groups will either be mereged or go. Why have an Airports purchasing group and a IT purchasing group - either merge them or pull them into the parent company for example.

I think that whoever buys them will also have to accept the fact there will be a lot of interference from the DETR, they will also have to toe the political line. Not to mention the internal unions.
If NATS think that a compnay will buy into NATS and just let it run itself as it has been run in the past it is in for a big shock

So what was my recomendation when I was asked - should we buy NATS ?.
NO, for the following reasons and some others that I'm not prepared to put here.
- Limit of liabilty & catostrophic loss.
- Unions.
- Unhappy and uncohesive workforce.
- At least 30% still have the civil service attitude.
- Would not be able to run the company without political interference.
- Percieved lack of commitment from NATS managers and commercial awareness.
- It will take 3-4 years to turn NATS around and get all staff on a more comercial footing.

And also they don't really need to be privatised at all. All that is really needed is for NATS to be allowed to borrow money and act as an autonomous division.
I'm not anti NATS. I like all the people I have met there, but as a company to work with they are slow, top-heavy and caught in the technical backwaters. They can't move fast if they wanted too, the structure does not allow 'free thinking'.

[Lon More]

Pompi, the DFS make no secret of the fact that they wish to expand. Eurocontrol and LvNL in particular watch out.
Shades of 1940

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Lon More,just an ATCO

[Davey Clark]

Thanks for the info. Who are DFS and LvNL please?

D.C.

[POMPI]

...They are the German and Dutch ATC organisations, broadly equivilant of NATS.

[Davey Clark]

Thanks POMPI.

[Mr Chips]

Pompi - broadly agree with you (being a NATS employee) but lets lose the opinion that ATCOs make all the money. Do they not get supported by ATSAs and engineers, let alone the other support staff. (Pay unit for example) All these staff, 1,000 of whom earn an awful lot of money. I'm not saying that it isn't earned, but look at it like the bean-counters will....

[POMPI]

...make the money asn in ... earn revenue

[Mr Chips]

I still make the same point Pompi. The ATCOs do not make the revenue on their own. They could not do it without the other staff. Route Charges gather the revenue....

[POMPI]

Mr Chipps, that's true and I agree with you. What I was trying to say that a ratio of about 4:1 or 5:1 is too high for a commnercial organisation of the type that NATS will have to become.
There is too much duplication of departments is basically what I was trying to say.
Not very well obviously.
By the way I was at LATCC this morning you could of bought me a coffee !.

[2 six 4]

BAA to be our next employers ? Just think of those nice uniforms !!!

As the CAA and NATS are talking to BAA wouldn't it be nice to know what they are saying on our behalf ?


BAA considers bid for air traffic control


Guardian.
Keith Harper, Transport Editor
Saturday September 25, 1999

Airports operator BAA yesterday emerged as a possible bidder if the government proceeds with plans to privatise Britain's air traffic control service.
Senior managers at the civil aviation authority have indicated they would be happy so long as part of any deal with government was that controllers' expertise was used to help BAA operate airports throughout the world.

BAA already manages airports in the United States, Italy and Australia. It could use the air traffic controllers as an extra arm to obtain business.

The CAA said yesterday that there had been preliminary discussions with BAA, which operates seven British airports, including Heathrow, Gatwick and Stansted, but this was only one of several options. No firm decisions could be taken until government had revealed detail of its legislation.

BAA confirmed it had been considering the idea but has made no decisions. It said that it had other big projects and that this was not a priority.

A decision by nine airlines, including British Airways and Virgin, to prepare a bid for privatisation of the air traffic control service (Nats) was described last night by unions as "unnerving".

Christopher Darke, general secretary of the airline pilots' union Balpa, said: "It's unnecessary because there other ways in which the government can attract private capital into Nats while keeping it in the public sector. We have better schemes which make good sense for the taxpayer."

Paul Noon, leader of the air traffic controllers ' union IPMS, said the airlines had already warned they would be worried if someone else took over air traffic control safety. The airlines have formed an alliance called The Airline Group and have already approached the government.

Ministers are unlikely to warm to the idea that the airlines should carry out the function. The privatisation is sensitive enough without allowing airlines to police their own safety. One critic said: "It is like asking the train operating companies to be responsible for safety. It makes no sense."





[This message has been edited by 2 six 4 (edited 28 September 1999).]

[POMPI]

ooohhh sir, suits you sir.
BAA would appear to be the best of the bunch. At least they have some idea of what aviation and safety is about.
However more to the point they have the money and if you are a politician you will have an easier time to sell BAA to your electorate than National Grid, Airsys or Serco.

[2 six 4]

Nope.

The best of them all is NATS with the freedom to borrow commercially - like the airports.

Don't fall into the trap of judging the beauty contest when not all the contestants are on show.

Did you listen to those ATCOs from New York in last night's channel 4 prog ? It was all ...safety, safety, safety, service, service, service and then commercial considerations. That is how ATC should run.

[Mr Chips]

I fdind myself agreeing with Pompi again. If we are to be bought, BAA is the best option. I would prefer not to be sold off, but then again, NATS isn't as good as it could be. Its more the levels of management thats a problem - most managers have only two (on average) people reporting to them, unlike the rest of industry where it is more like 5-6.
Pompi - next time you are at LATCC, i will buy you that coffee - shout me sometime

[POMPI]

5 or 6 per manager try 20 or 30 !.

[Radar]

Lon More

At least someone is wide to the DFS intentions ..... from a staffing point of view they're as strapped as the rest of us so I don't think they're in any position to make moves, for the moment. Down here in the south we're "sleeping with the enemy" so to speak and the name may have changed from BFS, but that's about all.

ON a different note, could some of you folks in the UK point me in the direction of BALPA's paper on NATS privatisation. I'd apreciate it.

[PPRuNe Radar]

POMPI,

Like the rest, I broadly agree with your statements. Freedom to be commercial is the common sense answer.

However noting your profile (computer industry) and the fact that your industry is generally very poor when it comes to producing the goods for ATS systems on time, on budget and working as advertised (NERC, Oceanic Systems, TAATS, CAATS, etc, etc) have you maybe done us all a really big favour by persuading your company not to be interested ? :)

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PPRuNe Radar
ATC Forum Moderator
[email protected]

[This message has been edited by PPRuNe Radar (edited 02 October 1999).]

[POMPI]

P-R,
Just about every single ATC/ATM project is either currently running late or was deliverd late. I think that this says a lot about what a difficult market place ATC/ATM is to be in and how projects are underestimated to get them past the 'political officers' rather than the competance or lack of it from the computer industry - not even mentioning Change Requests once you have started !.

As to doing you a favour about persuading my outfit not to buy NATS, sadly for you all they are a good group to work for, look after their staff and generally give a **** about their employees and their conditions (safety, pay, benfits) etc. Yes, we need to make money, but we try and be reasonable about it and try not to enter into too many duff deals.

[PPRuNe Radar]

I didn't necessarily intend to imply global incompetence in the computer industry(although I can think of a few companies where that probably is the reason actually :)).

More that there might be a danger of the provision of ATS by NATS under one of these groups slipping into the way that these companies currently deliver (late, over budget, etc). And where would that leave us ?

And, it's not the same division which deals with the ATS/ATM part of the business I know, but the space vehicles part of one of the main NERC suppliers has now been acknowledged as causing the crash of the recent space probe because they supplied data which was in imperial measures when the NASA computer works in metric ones. As Homer Simpson might say...Doh !! ;)

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PPRuNe Radar
ATC Forum Moderator
[email protected]

[POMPI]

Yep, Doh !!, I'll second that.

[POMPI]

According to the Guardian today, privatisation may not happen.
Could Sir Roy be out of a job already ?.

[Zones]

Those news reports are now out of date. Prescott saying that he isn't going to back down, and rather will use NATS privatisation as a model for other privatised transport - especially on safety front.

Ref - best option for NATS.
At this early stage, it is so difficult to compare one with another as we do not know any of the details, terms or plans. There will also be an ongoing process of negotiation between interested parties, NATS & DETR.

However, from a high level stand point, and to continue the thread, I feel that BAA is best way forward....they are in similar business to NATS, with a similar, if not quite as robust, safety culture which is required so that they do not lose licence to operate.

They also give NATS best opportunities for expansion worldwide eg China where they have just recently been granted licence to operate something like 6 airports. NATS could do worse than get some nice consulting work out that way, which could lead to some new Airports to run. SImilarly elsewhere in the world.

The "allow NATS commercial freedom without privatisation" could be a good idea. I wonder though whether it would go anyway to improving NATS's company culture/structure. Certainly, NATS would get the investment funds it desperately needs. But would it allow NATS the commercial freedom to "take over the world". Or would NATS remain just another civil service...

There has long been talk regarding harmonising European, or even worldwide ATC. But whilst governments & politics are still involved it will continue at a snails pace. The only way to add some much needed impetus to harmonisation is to add the financial incentive.

Hence in ten years time NATS will be not only controlling UK airspace, but a big slice of Europe, with a few other outposts globally. All safely!!

[granny smith]

Zones

Sorry mate but you're living in cloud cuckoo land if you think it'll all be rosy if /when we're bought by the BAA, or anyone else for that matter. If you don't want another Paddington disaster in 10 years, this time with 747's you've got to remove the profit motive from ATC.

Look at Belfast airport (Aldergrove) who are only just now getting SSR 30 years after it became common elsewhere because Aldergrove ATCOs provide a service to City traffic and the airport co opposed it on commercial grounds.

BAA is contracturally too difficult and would probably have to go to Monopolies Commission cos NATS is contracted already to provide ATC at all its airports and the others would cry foul. My preference would be for the airline consortium as they've stated they want to run it as a non-profit making enterprise. Don't believe it'll stay that way but best of a bad bunch.

Granny

[NikeAir]

Granny,

Totally agree with your sentiments.

Pompi & Zones are dreaming.

What the hell do BAA (Build Another Arcade)know about safety? please tell me how/where they have demonstated this?, their primary reason for existence is maiximising revenue through the selling of retail floor space and profits from Duty Free sales in their shopping malls (Apt Terminals).

Q.What is the largest cost to NATS?
A.Its Staff.
We dont need to guess where the cost savings, post PPP start then do we?

NikeAir

[PPRuNe Radar]

Granny,

NATS doesn't quite do all the BAA airports. Southampton Airport and ATC is BAA run (I think). Doesn't change your point though :)

And what's the original rationale behind the airport company at Aldergroves non supply of SSR do you know ? What has changed their minds ?

Nike,

How true about the BAA. Terminals full of shops and jobsworths http://www.pprune.org/ubb/NonCGI/frown.gif I wouldn't want to let them near the UK ATC operation.

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PPRuNe Radar
ATC Forum Moderator
[email protected]

[This message has been edited by PPRuNe Radar (edited 12 October 1999).]

[granny smith]

Radar

At Aldergrove the airport owners are in stiff competition for traffic with City airport owned by a different company. Aldergrove ATC provides an inbound and outbound radar service to both airports within the Belfast TMA. If the owners of Aldergrove were to pay for SSR to benefit their traffic City's would also benefit. It seems the two companies were unwilling to share costs hence nothing was done until recently.

As to what has changed - I'm not too sure. Perhaps someone with a closer knowledge can help out? In the meantime I'll ask around.

It just goes to show the falsehood of the arguement that privatisation will bring greater investment as a direct result. Quite the reverse is more likely. All the nice new toys the boys at the ATMDC are dreaming up to reduce the overloading of our poor little brains will come to naught since no company is about to stump up millions of quid for something that doesn't increase revenue and/or profit. A simple cost/benefit analysis will support that since most of the new toys are in the 'nice to have' bracket. Look how long it took to get the essentials like SSR at Glasgow, SMR at Edinburgh etc.

Say bollock to Blair on Privatisation!

[2 six 4]

Chaps. I think you will find that NATS is paying for the Belfast TMA SSR and making it available to any airport which wishes to pay for it.

Story is that NATS is fed up being implicated in incidents which would have been solved with decent (1960s technology)radar and have decided to pay the cost.

Would that happen if NATS was beholden to shareholders ?

[Zones]

Sorry for late reply - been busy elsewhere.

OK - BAA (as I allude to in my post) may not have same requirement for safety that NATS does. But they do operate within certain safety bounds. They do more than just shopping arcades...including responsibility for running the terminal buildings and ramp/parking areas. BAA give growth (hence profit) opportunities through their conduct of business outside of UK...which is where NATS should be heading.

Granny wrote : "If you don't want another Paddington disaster in 10 years, this time with 747's you've got to remove the profit motive from ATC."

So does fact that 99% of world's airlines have profit motive mean that they are unsafe ? Afterall they have safety to consider...don't they ?

Nikeair wrote
"Q.What is the largest cost to NATS?
A.Its Staff.
We dont need to guess where the cost savings, post PPP start then do we?"

There are two sides to profit : cost is only one of them. The other is revenue. Hence profits can increase if costs remain same but revenue goes up...simple stuff...a privatised NATS can start to grow outside of UK, with same resources. I doubt that a nationalised NATS would be able to do so, due to political blockages - sort of like we have today (re Eurocontrol)

BAA MAY NOT BE the best option...I'll accept that as questionable....but certainly privatisation of NATS should not have effect on safety....safety is any business such as this one's key asset upon which it sells its services....

[2 six 4]

Zones - you repeat this NATS management chant of expansion and profits from overseas.

Just where are these contracts ?

[granny smith]

Zones

Sorry mate but you've been listening to our caring, sharing management too much with their vested interest and political agendas. The most likely way a commercial owner of NATS will make a short-term profit (and short-termism is rife in British business at the moment)is to make staff cuts, which in ATC will result in increased delays to the travelling public and greater pressure on individual controllers to accommodate more and more aircraft into finite amounts of airspace.

This can have no other effect than to jeopardise safety. This is in a profession already short of qualified controllers, and at times, stretched to capacity.

Oh sure in the long run if NATS 'strategic partner' can break into foreign markets there is a potentially lucrative market to be exploited but at what cost here in the UK?

[2 six 4]

Come on Zones. If the profit bit is simple stuff and there are contracts to be had abroad which will make NATS lots of profit .... simply tell us where they are.

[2 six 4]

Poor Zones. He must have gone back to CAA house for the NATS plc or CANSO answer.

[Zones]

Didn't go anywhere, apart from the PC shop to get new toy as my old PC crashed (pls forgive the doube entendre...)

In all this debate about privatisation, I have still to hear any answer to the "what about other privatised airlines/airports" question. Any constructive comments out there ?

All I keep hearing is the "profits means cuts" bit....nothing about how safety is an asset that such an organisation sells on, and as such why would they risk their prime asset?

As for the "where are the foreign contracts", just wait and see, they will come along without much trouble. At first just little ones such as consultancy (which DFS already does), but later, when the industry looks at liberalisation, and politicians get their noses out of the issue (like they do in Eurocontrol), then the big ones will come along...

I also keep hearing the "no other country has done it yet" bit. Well funnily enough, heard someone say the other day that Fiji government has let a contract to a private company to run it's FIR. That company is majority owned by the national ATCO's that work for it, and is quietly planning takeover of other Pacific nation ATC.

Have also heard that other governments are exteremly interested to see how it all goes in UK, with a view to following suit...

UK led the way with Airline privatisation, and our airline indutry is one of the best. We lead the way with airports, and now the world is following....why not ATC ?

[Zones]

P.S.

All my own thoughts and nothing to do with any management indoctrination....

Some of us just have differnt opinions, hence the beauty of websites like this one!

[Mr Chips]

Yeah - BA are doing great, and they hardly ever cut staff, do they!