Airlines to prop up crisis-hit Nats

The four airlines that own stakes in National Air Traffic Services have agreed to shoulder future losses at the troubled part-privatised business.

BA, Virgin, easyJet and BMI were forced to make the concession as part of the complex restructuring of Nats, which was thrown into crisis after the 11 September terrorist attacks.

The plans, to be announced in a fortnight, mean that if Iraq is invaded – leading to a downturn in air travel – then the airlines will almost certainly have to support Nats.

Under the plans, they will pay 50 per cent of extra costs if traffic volumes fall below a "base-case". If they drop 20 per then the airlines will have to pay 80 per cent of costs.

Under the restructuring, airports operator BAA will also invest £65m in Nats. This will be in the form of a bond but BAA will also receive a 4 per cent stake in Nats. The four airlines will each give up 1 per cent of their equity.

The Government has agreed to give £65m to Nats, whose side of the bargain is to find £200m of cost savings.

David Luxton, national secretary of Prospect, the air traffic controllers' union, said: "The restructuring should give Nats a robust financial structure. But we remain concerned about exactly how the £200m of cost savings will be found and the impact on Nats staff. This must not compromise safety."