EU clears UK air traffic takeover

An alliance of seven UK airlines will operate Nats

The European Commission has cleared the UK government's part-privatisation of the National Air Traffic Control Services (Nats) through the sale of a key stake to the consortium Airline Group.

The Commission had been examining the sale on competition grounds.

"In the absence of overlaps, the Commission examined carefully the extent to which the involvement of British Airways and the other six airlines in the management of Nats could create or strengthen any dominant positions, but its investigation led to the conclusion that this would not be the result," it said in a statement.

The Airline Group, a consortium made up of seven UK airlines, won control of Nats from the government in late March for £800m.

The sale has been opposed by the Institution of Professionals, Managers and Specialists (IPMS), the union that represents air traffic controllers, over fears that the pursuit of profit would compromise safety.

The bill to privatise Nats also made turbulent progress through the UK's House of Lords because Labour failed to include the policy in its last election manifesto and stated that the party was against such a move.

'No profits'

The Airline Group pledged Nats would be run on a "not for commercial return" basis and to invest £1bn ($1.4bn) over the next seven years to increase domestic air traffic capacity.

Nats can make a profit from its airport-based activities, but not from en-route or oceanic services.

Any profits will be ploughed back into the system or paid as dividends to other shareholders - the UK Government and Nats employees.

The Airline Group, comprising Airtours, Britannia Airways, British Airways, BMI British Midland, EasyJet, Monarch Airlines and Virgin Atlantic Airways, has management control of Nats.

All members have equal stakes of the 46% shareholding, while the UK government retains a 49% share, with employees taking 5%. Nats shares are not listed on a stock exchange.