The Government had argued that the enormous investment programme to improve air traffic control, currently running at pounds 150m a year, would be put in jeopardy unless National Air Traffic Services was privatised.
However airlines such as British Airways had been worried about the privatisation plan because they thought it would result in an unnecessary rise in charges. Sir Colin Marshall, BA's chairman, said earlier this week that there were alternative ways of safeguarding the investment programme, such as the creation of a free-standing non-profit-making organisation to provide air traffic control. Alternatively, NATS could be given the power to borrow money from the private sector.
Ministers have been surprised at the unanimity of opposition expressed in the consultation process held this summer. Respondents raised concerns that a private company interested only in short- term profit would not fund the large research and development programme. There was also fear that the plan to integrate air traffic control services throughout Europe could be put in jeopardy.
The Government was also finding it difficult to ensure that a private company would make an adequate rate of return as Eurocontrol, the umbrella body for air traffic control services, does not allow for excessive profits to be made out of air traffic control services.
Ministers will say that the plan to privatise NATS has been dropped because of lack of legislative time in the forthcoming Queen's Speech and that it may be included in the 1995-96 programme.
However, opponents of the scheme suggest that the widespread opposition ensures that the plan will not be revived.Reuse content