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BAA to fly Nats round the world

Clayton Hirst
Sunday 26 May 2002 00:00 BST
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BAA, the airports operator, plans to expand the beleaguered part-privatised national air traffic service (Nats) internationally if its negotiations to buy a £50m stake are successful.

Well-placed sources revealed that talks between Nats' adviser, SchroderSalomonSmithBarney, and BAA are at an advanced stage and a deal could be signed in a fortnight. BAA believes international moves to relax controls on airspace present an opportunity to roll out Nats in continental Europe, America and Australia.

As well as owning airports in the UK, BAA manages facilities around the world, including Naples, Boston, Pennsylvania, Melbourne and Perth. Unlike the UK, air traffic controls in other countries are state-owned. But some nations, notably the Netherlands, are already exploring the possibility of bringing in private partners.

BAA is the front runner to become Nats' investor after services group Serco last week pulled out. It is understood that talks broke down over the issue of how much management control Serco would take.

BAA is expected to take a minority stake in Airline Group, the company that owns 46 per cent of Nats. Other members include BA, Virgin, easyJet and BMI British Midland. As part of the deal, BAA would inject £50m into the company, to be matched pound-for-pound by the Government, which owns 49 per cent of Nats. The staff own the remaining 5 per cent.

The importance of new investment was increased last week after the Civil Aviation Authority (CAA) rejected Nats' bid to raise its charges by 5 per cent over three years. It is believed the CAA was opposed to the original part-privatisation of Nats. It has given Nats a further 30 days to discuss its application. Nats claims that if it can't increase the charges, it will jeopardise plans to modernise the system.

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