Air traffic group denies cash crisis

Nats admits it is 'not immune' from the aviation crisis

The UK's recently part-privatised National Air Traffic Services (Nats) has criticised as "speculation" a report that it might have to ask the government for an injection of funds.

The Financial Times newspaper claimed that Nats is coming under pressure from its bankers to ask for the money.

Speaking to BBC News Online, a Nats spokesman said the company was "not immune" from the effects of last month's terrorist attacks and said reports that it was seeking cash handouts from government were speculative.

It is too early to tell what effects those events [relating to the 11 September attacks] will have

Nats

Many airlines are cutting back services as they attempt to trim costs, and this is thought to be hitting the income of the air traffic control business.

'Too early to tell'

"How great an effect the downturn in air travel will have on our business is something we are examining closely as part of our first business plan scheduled for completion by the end of the year," the spokesman said.

For the moment though he said it is "too early to tell what effect those events will have".

"Throughout the whole process we will continue to consult closely with our major shareholders, the government and the airline group. We will also continue to keep our staff and trade unions informed."

"Whatever the outcome of our business review, safety and service standards will not be compromised," he added.

Nats has already announced a number of cost cutting measures.

These include reducing its support staff and management by 20%, delaying plans to build a new air traffic control centre at Prestwick, and moving its headquarters out of central London.

Approach 'within weeks'

The Financial Times said the government is bracing itself for a request for extra funds.

It says a senior ministerial insider has indicated that an approach from Nats is expected over the next few weeks.

"They are trying to work it through, trying to do some estimates. When they've done that I think they'll probably come to us," the source is quoted as saying.

Nats was partly privatised three months ago.

A group of seven airlines - including British Airways, Virgin Atlantic and EasyJet - owns 46% of the company.

The government holds 49%, and employees own the remaining 5%.