The UK’s Civil Aviation Authority (CAA) has confirmed its Final Decision on new price control arrangements for NATS (En Route )Plc (NERL). As the economically regulated subsidiary of NATS Holdings, NERL is the provider of en route air traffic control services in the UK and is subject to economic regulation by the UK CAA. The controls regulate prices NERL can charge airlines for hte services it provides in UK and Noarth Atlantic airspace.
The Final Decision is in line with the Provisional Decision which was published in July 2023.
The average charge for NERL’s regulated en route service over the period 2023 to 2027 inclusive is forecast to increase by 26% compared with 2022, from £42 to £53 in 2020 prices. The Final Decision is expected to increase the average cost of UK en route air traffic services by around £0.43 to around £2.08 per passenger per flight.
In nominal terms, the average charge is forecast to increase £47 in 2022 to £64 in 2023 to 2027 inclusive.
NERL’s charges, in 2020 prices, are expected to stay below the average level experienced in the price control period from 2015 to 2019, prior to the impact of the global pandemic, and should remain broadly in line with NERL’s European counterparts.
The UK CAA’s decision will allow NERL to continue to recover its operating costs and finance new investment needed to provide a high-quality level of service in the future.
It also allows NERL to recover revenues from the period affected by the COVID-19 pandemic, which the regulator has spread over 10 years to reduce the impact on charges.
“Our decision will provide the resources and investment required for NERL to provide a resilient, high-quality service for passengers and modernise its services, while recovering costs from the pandemic, which is consistent with the traffic risk sharing arrangements in NERL’s licence at the time.
“Overall the price control should ensure that NERL provides an efficient service and value for money. Implementing targets around performance, efficiency and environmental impact will help deliver an improved airspace system that will benefit everyone.”
The regulatory arrangements for NERL include incentives to deliver environmental improvements and reductions in delays, as well as for effective engagement with airlines on its major investments.
