Nats warning over 15 per cent cut in charges

Britain's air traffic control service warned yesterday that it might not be able to generate enough profit to invest adequately in the business after the industry regulator ordered it to cut charges to airlines by 15 per cent over the next five years.

Britain's air traffic control service warned yesterday that it might not be able to generate enough profit to invest adequately in the business after the industry regulator ordered it to cut charges to airlines by 15 per cent over the next five years.

National Air Traffic Services (Nats), which is part-owned by a group of UK airlines, said it was disappointed with the proposals from the Civil Aviation Authority, claiming they could hamper its ability to meet rising demand and minimise delays.

The CAA has proposed a cut in real terms in Nats' charges averaging 3.4 per cent a year between 2006 and 2010. It also proposes to increase the maximum penalty Nats could pay for poor performance from £10m a year to £24m.

CAA's initial recommendations last November would have cut Nats' charges by 4.8 per cent a year and imposed penalties of up to £27m.

Nats, led by chief executive Paul Barron, has until the end of July to decide whether to accept the new price controls or go to the Competition Commission.