CMA announces decision regarding CAA-NERL ATC charges dispute

24 July 2020 (Last Updated July 24th, 2020 10:46)

The UK Competition and Markets Authority (CMA) has announced its decision for the price control dispute between the Civil Aviation (CAA) and NATS (En Route) Plc (NERL).

CMA announces decision regarding CAA-NERL ATC charges dispute
NATS (En Route) Plc (NERL) is a subsidiary of NATS, which is the UK’s main air navigation service provider. Credit: Government of UK.

The UK Competition and Markets Authority (CMA) has announced its decision for the price control dispute between the Civil Aviation (CAA) and NATS (En Route) Plc (NERL).

CMA was charged as the independent body to investigate the dispute.

As a NATS subsidiary, NERL holds a licence to offer en-route air traffic control services over the UK and the North Atlantic. CAA regulates NERL.

The CAA’s price control decision for the period between 2020 and 2024 was rejected by NERL, following which the issue was referred to the CMA for investigation.

The investigation was underway before the global Covid-19 pandemic, which has severely affected air traffic and NERL’s operations.

The organisation finalised the price control mechanisms that are mostly in line to the ones proposed by the CAA, with some changes to comply with the NERL’s submissions.

This will act as the price control basis for an interim period from 1 January this year until 31 December 2022.

During this time, CAA will conduct a review of the price control, which will also reconcile the data from the Covid-19 period.

The final determination also mandates improvements to capital expenditure governance and incentives that are applicable after the interim period.

In 2018, CMA expressed its concerns that the merger of Menzies and Airline Services will adversely affect competition within the country’s airport services industry.

In a separate development, Manchester Airport in the UK has announced plans to introduce an air service to Belfast City Airport from 14 September.

Aer Lingus Regional operator Stobart Air will establish five ATR72-600 aircraft at Belfast City Airport.