The air traffic control authority in the UK has received approval to raise fees by over 25% and increase the cost of air travel. This comes shortly after a system malfunction caused disruptions and led to the cancellation of over 2,000 flights.
The CAA announced that it has approved a pricing plan that would allow Nats to increase their fees by approximately 25% from 2023 to 2027. This would result in a 43p increase in the average charge per passenger per flight, bringing it to £2.08.
The airline industry responded with frustration to the statement, labeling it a “betrayal” for customers who would ultimately have to pay more through increased prices.
The CAA announced that their decision will enable Nats to recoup their operating expenses and fund necessary new investments in order to maintain a high standard of service in the future. This will also help compensate for lost revenues during the Covid-19 pandemic when travel restrictions were in place.
The Prospect labor union, which advocates for employees in the transportation industry, stated that investing in infrastructure is crucial to maintaining the UK’s safe air traffic record. The UK’s airspace is known to be highly busy and intricate compared to others around the globe.
“I support the CAA’s decision to reject airlines’ demands for even lower costs. This would have resulted in reduced investments, fewer air traffic controllers, and a less robust system that would cause more delays for passengers,” stated Mike Clancy, general secretary of Prospect.
There has been increasing conflict between the CAA and airlines as the airlines have requested compensation from Nats due to a major disruption in August that impacted numerous travelers during the holiday weekend.
Tim Alderslade, the head of Airlines UK, spoke out against the raised fees, stating that they were another setback for travelers who have already faced numerous problems this summer, such as the IT failure by Nats in August. He expressed concern that passengers would ultimately be the ones paying for the significant cost increases.
Alderslade stated that the situation cannot be justified until there is clarity on measures being taken to prevent future disruptions for airlines and their customers.
“It is evident that a more comprehensive external evaluation of Nats’ regulatory practices is necessary to safeguard passengers and prevent airlines from constantly being burdened with the role of last-resort insurer and the accompanying financial burden of mishaps that are beyond their control.”
Nats is a company that is owned by both the government and private investors, with the state holding a 49% stake. They have been granted a license by the CAA to manage the country’s airspace, with their main base located in Swanwick, Hampshire. Their operations are funded by collecting overflight fees from airlines, amounting to hundreds of millions of pounds.
The CAA stated that their investigation into the malfunction of the system is still in progress. They also mentioned that they will take any necessary regulatory actions based on the results of the independent review.
The incident has been attributed to “unusual circumstances” by Nats, who stated in their initial report that it was caused by an incorrect input of data from an unidentified airline in the flight plan.
According to Willie Walsh, the head of Iata, it is astounding that one mistake in a flight plan could cause the entire system to fail.
Nats has not confirmed if they will utilize the additional funds to improve their IT systems. They have stated that they are currently examining the CAA’s final ruling on pricing.