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Thursday, 17 February, 2000, 17:58 GMT
Revolution in the air

A cross-party committee of MPs has fiercely criticised government plans to partly privatise Britain's air traffic control system. BBC Transport reporter Tom Heap explains:

What does the report say is the main danger of a public/private partnership in charge of air traffic control?

It says that a private company would be likely to cut costs which would jeopardise safety. They fear the priority of the new owner would be to provide a return for the share holders, this could come at the expense of safety.

What exactly is the govt proposing - is it privatisation in all but name?

A majority of the company - 51% - is passing to the private sector. There is little doubt the Conservatives would have called this a privatisation - but for them it wasn't a dirty word. The government will keep a golden share which enables them to veto plans which would threaten National Security.

What does the govt see as the advantage in its plans for air traffic control ?

A commercial company will be able to borrow money on the open market. As a private enterprise it would be completely separate from government spending or borrowing. NATS needs money, everybody agrees with that. The most recent estimate is 1.3bn pounds over ten years to cope with passenger numbers which are expected to double by 2012. They oppose a full sell off of such a strategically important business.

Have the committee of MPs produced any counter-proposals ?

They are very impressed by the Canadian model. In 1996 the Canadian government handede air traffic control over to a trust or `non share capital corporation'. The company is run by the airlines, the unions and some directors appointed by government. It was funded by a bond issue which was three-times over subscribed. Because there are no shareholders there isn't the pressure to make profits.

What do the air traffic professionals and the pilots think ?

Their unions are firmly against the government's plans. They fear a private company might cut corners on safety and alter their work patterns to save money. It should be remembered that privatisation is a right wing policy, unions tend to be left of centre.

How likely is it the govt will be forced to back down - and perform a U turn as it did over similar proposals for the London Underground ?

There is a whiff of compromise in the air. Interviewed since the reporty was published, the Transport Minister, Lord Macdonald volunteered that the government was quite prepared to see a trust or not for profit partner taking the private share if this suited other criteria. His tone was markedly more receptive to this idea than on previous occasions. It would not require a change in the bill but would quell much of the unrest on the backbenches.
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See also:
16 Feb 00 |  UK Politics
Selling off the skies
14 Feb 00 |  Scotland
Centre cleared for take-off
31 Jan 00 |  African
Are the skies safe enough?

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