Why ownership matters: 25 years of the NATS PPP

Most people boarding a flight this summer won’t give a moment’s thought to who owns the air traffic control service supporting their journey.  Quite right too.  What matters is that it works, that traffic moves safely, delays are kept to a minimum and the network can cope with some of the busiest, most complex airspace in the world. 

Yet ownership matters more than it might appear.  It determines how an organisation invests, whose interests shape its decisions and how far ahead it can afford to think. 

Yesterday marked 25 years since the Airline Group became NATS’ strategic partner on 26 July 2001, completing our move to a Public Private Partnership (PPP).  It made NATS the first major European air navigation service provider to operate in the private sector.  At the time, it was a bold and controversial idea – combine public safeguards with private finance, give customers and employees a stake and use that mix to support a safety-critical national service. 

The immediate problem was practical.  NATS needed to modernise, but its investment programme was constrained by public sector borrowing rules.  Under the PPP, the Government retained a 49 per cent stake and a golden share, while NATS gained more freedom to raise finance privately.  Airlines acquired a direct interest in the performance of the service and employees held five per cent of the company. 

Finance, though, is only part of why the model has endured.  Its real strength is the partnership between public and private sectors.  Government, industry and employees will not always see every issue in the same way, there’s no point pretending otherwise.  The PPP model requires those competing interests to be worked through, with safety always non-negotiable and the long-term health of the service kept firmly in view. 

Then came 9/11.  Less than seven weeks after the privatisation, traffic and revenue fell sharply and the assumptions behind the original business plan no longer held.  By 2003, NATS had been refinanced and put on firmer ground.  The business plan had been overtaken by events, but the partnership proved able to adjust. 

Aviation has provided no shortage of tests since, from the global financial crisis and volcanic ash to the Covid pandemic.  The PPP could not shield NATS from those shocks, but it offered a stable base from which to respond and continue investing. 

That ability to look beyond the immediate crisis is crucial.  Air traffic management systems cannot be changed overnight.  New technology can take years to design, test and introduce safely, so decisions cannot be driven by the next quarter or even the next financial year. 

Twenty-five years on, NATS handles more than 2.5 million flights a year, compared with just under two million in 2001.  Average delay has fallen from more than 100 seconds per flight in the early 2000s to just a few seconds today, while our safety performance is consistently among the best in the world. 

An ownership model does not control aircraft, people do.  The credit for that record belongs to colleagues across NATS.  The PPP’s contribution has been to give them the stability, tools and investment they need to do their best work. 

Longevity alone is not proof of success, and the PPP must keep earning its place.  We now need to modernise UK airspace, integrate new types of aircraft, digitise more of our services and improve aviation’s environmental performance.  None of that will be quick or simple.  It will demand patient, long-term investment and close cooperation between government and industry.  That is where the model must prove its value next. 

Most passengers will never notice any of this, and that is fine.  If the PPP continues to help us make the right long-term decisions and give our people what they need, it will be doing its job – quietly, in the background, much like NATS itself. 

Listen to our anniversary podcast below: