£1bn INVESTMENT AT HEART OF AIRLINE GROUP STRATEGY FOR NATS

The Airline Group today announced its plans as the UK Government’s new strategic partner for NATS – including a commitment of £1billion for new investment. The Airline Group, a consortium of Britain’s leading airlines, will forge a new public private partnership (PPP) with the Government and the staff of the UK’s National Air Traffic Services to enable it to continue to provide a safe, reliable and efficient service, to deliver essential increases in capacity and to take the lead in air traffic development worldwide.

As major users of UK airspace the Airline Group’s strategy for NATS commits it to:



· ensuring that safety remains NATS’ paramount priority and that NATS will always be managed and resourced to enable it to continue to provide a safe, reliable and efficient service.

· providing NATS with over £1 billion for new investment over ten years to deliver essential increases in capacity ahead of current plans.

· working with NATS on the two centre strategy and to ensure the new en-route centre (NERC) at Swanwick becomes operational from NATS’ target date in January 2002.

· putting the new NATS in the vanguard of the movement towards greater operational integration of air traffic systems across Europe and the rest of the world.

· ensuring NATS continues to provide its services without discrimination and to involve all airspace users, including the MOD, in consultations about how the airspace is going to be managed.



As part of the deal the Airline Group will pay the government around £800m on completion of the process on 1 June 2001 when the Airline Group formally becomes NATS’ strategic partner. The agreement is subject to regulatory approval.

Sir Michael Bishop, Chairman of the Airline Group, said today:

“The aims and objectives of NATS and the Airline Group are inextricably linked. We are absolutely committed to working with NATS and the Government to maintain NATS’ excellent safety record. Our main focus will be on NATS’ vital objective of managing the safety of the skies above the UK and at our major airports. We will operate NATS core business on a not-for-commercial-return basis.

“Our £1bn investment will give NATS’ controllers the modern tools they so desperately need to replace their outdated systems. NATS’ controllers are recognised as being among the best in the world and we will ensure their experience and expertise is fully reflected in building a world-class NATS fit to face the challenges of the future.”

The PPP has the potential to act as a catalyst for the development of a Single European Sky. Accordingly, the Airline Group is also working with a number of other leading international air traffic control providers in order to facilitate the international development of NATS business: the Irish Aviation Authority, DFS German AFS (Germany), ATC the Netherlands (Holland), Belgo Control (Belgium) and Icelandic Civil Aviation Authority (Iceland).

The Airline Group was supported in its bid by BT, as technology partner, and the Irish Aviation Authority who provided air traffic management expertise. The Airline Group was advised by Schroder Salomon Smith Barney, Spectrum Capital Ltd and Norton Rose.

Sir Michael Bishop takes over as Chairman of the Airline Group from Danny Bernstein, Chairman of Monarch Airlines, who headed the Group during its successful bid to win the competition.

Notes

1. The Department of Environment, Transport and the Regions (DETR) announced on 27th July 1999 its proposal for a public/private partnership (PPP) for National Air Traffic Services (NATS). The Government will transfer 51% of NATS to a strategic partner and employees, but will retain 49% and a so-called ‘golden share’. It is anticipated that the Strategic Partner will assume operational control of NATS. The NATS PPP formed part of the Transport Act.

2. The Airline Group and their heads are:

Airtours International Airways Mike Lee, Chairman

British Airways Lord Marshall, Chairman

Britannia Airways Kevin Hatton, Managing Director

bmi British Midland Sir Michael Bishop, Chairman

easyJet Stelios Haji-Ioannou, Chairman

Monarch Airlines Danny Bernstein, Managing Director

Virgin Atlantic Airways Sir Richard Branson, Chairman