CAP 1682 - Decision on modifications to Condition 2 of NATS (En Route) plc licence in respect of resilience planning, policy statement on enforcement and resilience plan guidance

Responses to our consultation (CAP 1639):

• NERL
• British Airways
• Colin Hume, AOC Consultant
• Prospect ATCO's branch
• Guild of Air Traffic Control Officers

Expectations for NERL Revised Business Plan 

• Letter from CAA to NERL regarding NERL Revised Business Plan (September 2018)

Views on NERL Initial Business Plan

• Letter from NERL to CAA regarding NERL RBP3 Initial Business Plan (June 2018)
• Letter from CAA to NERL regarding NERL Initial Business Plan (May 2018)

Business Plan guidance to NERL for RP3

This document sets out guidance to NERL from the CAA in preparing its Business Plan for Reference Period 3 (2020 to 2024).

This consultation document sought views from interested parties on the Business Plan guidance that should shape the CAA's approach to the future economic regulation of NERL in the period from 2020 to 2024.

Responses to consultation document:

• NERL
• IATA
• British Airways
• Virgin
• Prospect ATCOs Branch & ATSS Branch
• PCS
• CAA Pension Scheme
• FAS Deployment Steering Group
• Aviation Communities Forum and Stop Stansted Expansion

Strategic themes for future regulation of NERL

This discussion document sought stakeholder views on the CAA's proposed strategic themes for the future regulation of NERL, in order to inform the development of the CAA's approach to the regulation of NERL from 2020.

Responses to discussion document:

• NERL
• British Airways
• Virgin
• Gatwick Airport
• Biggin Hill Airport
• Prospect - ATCOs Branch
• CAA Pension Scheme
• Local resident

Consultancy reports on NERL's Initial Business Plan

This document is a review by the Government Actuary's Department on certain aspects of NERL's pension arrangements, to help inform the CAA's allowance for pension costs in RP3 (covering the period from 1 January 2020 to 31 December 2024). This report analyses the principal factors which determine NERL's pension costs and predominantly covers the defined benefit costs arising from the NATS pension scheme. The results of this review enable the CAA to understand the factors affecting NERL's future cash pension contributions, and the extent to which NATS pension scheme's funding approach is consistent with that of other UK private sector defined benefit pension schemes.

We would welcome views from interested parties on the findings from GAD's review, to inform CAA's allowance for pension costs in RP3. Please email any comments to economicregulation@caa.co.uk.

• Letter from CAA to NATS about interim SIP18 (October 2018)
• Letter from CAA to NATS about SIP18 (March 2018)
• SIP2018 Independent Review Report (February 2018)
• Letter from CAA to NATS about interim SIP17 (July 2017)
• Interim SIP17 Independent Reviewer Report (July 2017)
• Letter from CAA to NATS about airspace and technology programmes and SIP17 (May 2017)
• Airspace and technology programmes Independent Reviewer Report (May 2017)
• Letter from CAA to NATS about SIP17 (January 2017)
• SIP17 Independent Reviewer Report (January 2017)

Condition 10 of NERL's licence requires it to provide a business plan, service and investment plan and periodic reports. After consultation we modified Condition 10 to require NERL to produce detailed technology and airspace plans for RP2 (2015-19) and outline programmes for RP3 (2020-24) as well. At the same time we removed the requirement for it to produce plans on raising the UK transition altitude (TA) and the implementation of the London Airspace Modernisation Programme (LAMP). Our consultation documents, as well as previous documents relating to Conditions 10 and 10(a) are below:

• CAP 1418 - Decision on modifications to NATS (En Route) plc licence in respect of certain planning and reporting requirements under Conditions 10 and 10a (June 2016)
• CAP 1405 - Proposal to modify NATS (En Route) plc licence in respect of certain planning and reporting requirements under Conditions 10 and 10a: Notice under section 11(2) of the Transport Act 2000 (May 2016)
• Responses to CAP 1405:
  • NERL
  • LACC (Heathrow)
  • British Airways
  • Virgin
  • Prospect - ATCOs branch
  • Gatwick Area Nightflight Nightmare
  • Mr Henderson
• CAP 1362 - Decision on modification to NATS (En Route) plc licence in respect of reporting of certain plans under Condition 10a (December 2015)
• CAP 1352 - Proposal to modify NATS (En Route) plc licence in respect of reporting of certain plans under Condition 10a: Notice under section 11(2) of the Transport Act 2000 (November 2015) See the response from NERL.

Advice to the Secretary of State for Transport on extending the length of the notice provisions for termination in the Air Traffic Services licence.

• Section 16 Advice
• Independent Europe Economics report

As part of the European SES performance scheme - member states can submit reports on costs exempt from cost-sharing. Below is the UK's report for RP2, which includes amounts for variances in Eurocontrol, spectrum and agency costs.

• UK NSA costs exempt report for 2015 (November 2016)
  • Annex A - National pension regulations and accounting regulations
  • Annex B - Mitigating actions taken to control cost risk
  • Annex C - Calculations of adjustment mechanism - exchange rates
  • Annex D - Breakdown of 2015 actual costs of Eurocontrol Agency
  • Annex E - Eurocontrol multi-lateral agreement

As part of the European SES performance scheme - member states can submit reports on costs exempt from cost-sharing. Below is the UK's report for RP!, which includes amounts for variances in Eurocontrol, spectrum and agency costs.

• UK NSA costs exempt report for RP1 (September 2015)
  • Attachment 1 - National pension regulations and accounting regulations
  • Attachment 2 - NATS defined benefit scheme
  • Attachment 3 - Mitigating actions taken to manage cost risk

In our Ad Hoc Review of NATS-related risks in 2012/13, we found that the current arrangements for governance and ring-fencing may need to be strengthened to ensure that users are adequately protected from risks which arise outside of the regulated business.

We consulted on initial proposals to modify these arrangements, and have now published our decision to modify NERL's licence.

• CAP 1380 - Decision on modifications to NATS (En Route) plc licence in respect of Governance and Ring-fencing (March 2016)
• CAP 1368 - Final proposals on modifications to NATS (En Route) plc licence in respect of Governance and Ring-fencing (February 2016)
• CAP 1287 - Initial proposals on modifications to NATS (En Route) plc licence in respect of Governance and Ring-fencing (April 2015)

Responses to consultation:

• easyJet
• Heathrow Airport
• NATS
• NATS unions

• CAP 1252 - Decision on the modification of NATS (En Route) plc licence to transpose the UK-Ireland FAB Performance Plan for 2015-2019 (January 2015)
• CAP 1254 - Decision on modifications to NATS (En Route) plc licence in respect of the Oceanic price condition for 2015-2019 (January 2015)
• CAP 1249 - FAS Deployment Facilitation Fund (January 2015)
• CAP 1253 - Decision on modifications to NATS (En Route) plc licence in respect of reporting and Specified Services  (January 2015)
• Flight efficiency metric calculation and annual review protocol (January 2015)

• CAP 1639 - Proposal to modify Condition 2 of NATS (En Route) plc licence in respect of resilience planning, policy statement on enforcement and consultation on draft guidance (February 2018).
• CAP 1229 - Proposal to modify the NATS (En Route) plc licence to transpose the UK-Ireland FAB Performance Plan for 2015-2019: Notice under section 11(2) of the Transport Act 2000 (November 2014)
• CAP 1230 - Proposal to modify the NATS (En Route) plc licence in respect of the Oceanic price condition for 2015-2019: Notice under section 11(2) of the Transport Act 2000 (November 2014)
• CAP 1242 - Proposal to modify the NATS (En Route) plc licence in respect of reporting and Specified Services: Notice under section 11(2) of the Transport Act 2000  (November 2014) 
• Responses to proposals to modify licence:
  • NERL
  • Heathrow Airport

In May 2015, after consultation, we published Economic Licensing Enforcement Guidance covering our approach to enforcing the NATS Licence and airport economic licences under the Civil Aviation Act 2012. The guidance outlines the legal framework in which our work fits and informs stakeholders of the enforcement powers we have and how we will use them.

• Economic Licensing Enforcement Guidance (May 2015)

After consultation, we also published prioritisation principles that explain our approach in deciding which pieces of work to take forward in the areas of consumer protection, competition law and economic regulation.

• Prioritisation Principles for the CAA's Consumer Protection, Competition Law and Economic Regulation Work (May 2015)

• The work of the CAA, at the request of the Department for Transport, to assess the contestability of the market in provision of ANSP terminal services in the UK

• Oceanic industry seminar 1 September 2014: Meeting note and presentation (September 2014)
• CAP 1205 - NERL Oceanic charge: Proposals for a charge cap 2015-2019 - consultation document (July 2014)
  • NATS response
  • IATA response
  • BATA response
  • British Airways response
  • Virgin response
  • NATS Unions response    

Final UK-Ireland FAB Performance Plan submitted to European Commission

• Corrigendum to the UK-Ireland FAB Performance Plan for RP2 (November 2014)
• Final UK-Ireland FAB Performance Plan for RP2 (2015-19) submitted to the European Commission

Post-consultation Performance Plan (NSA initial submission to State)

• FAB Performance Plan: UK-Ireland FAB - Second reference period (2015-2019) (May 2014)
• UK-Ireland RP2 performance plan supporting document  (May 2014)
• Responses to consultation on draft UK-Ireland FAB performance plan for RP2 (April 2014)
  • Airline community
  • Airline community position on opex contingency   
  • ATC Branch - Impact
  • CAA Pension Scheme   
  • Dublin Airport Authority
  • GATCO  
  • IAA PSEU
  • Manchester Airport Group  
  • NATS
  • NATS Trade Unions
  • Trustees of NATS Sharetrust  
  • Virgin   

Transcript and presentation from Stakeholder Consultation meeting

• RP2 Stakeholder Consultation meeting 14 March 2014 - transcript (March 2014)
• UK-Ireland FAB Performance Plan for RP2 - Stakeholder consultation (March 2014)

Draft performance plan published for consultation

• Draft UK-Ireland RP2 Performance Plan - Consultation document (February 2014)  
• FAB Performance Plan: UK-Ireland FAB - Second Reference Period (2015-2019)  - template  

 Consultancy reports

• GAD analysis of pension costs for CAA's RP2 price control review of NERL (March 2014)
• NERL non-staff opex review - report by Capita for the CAA
• Assessing the efficiency of NERL's total employment costs in RP2: a research report for the CAA - report by IDS
• Estimating the cost of capital for NERL - report by pwc for the CAA
• What is the cost of capital for NATS (En Route) plc for RP2? - a report for NERL by Oxera
• NERL RP2 capex review - phase 1 report by Arup and Helios (January 2014)
• NATS cost allocation - final report by CEPA and BDO (October 2013)

London Approach

• CAP1158 - Regulatory treatment of London Approach charges in Reference Period 2 (2015-2019) of the Single European Sky Performance Scheme: CAA conclusions (February 2014)
• Regulatory treatment of London Approach charges in Reference Period 2 (2015-19) of the Single European Sky performance scheme  (October 2013)
  • Responses:
    • NERL
    • Airlines for America
    • British Airways
    • Heathrow Airport
    • IATA

UK Terminal Air Navigation Services (TANS)

• CAP1157 - The CAA's approach to the regulation of terminal air traffic service in RP2  (February 2014)
• Approach to terminal air navigation services regulation in RP2 - a consultation (December 2013)
  • Responses:
    • NSL
    • British Airways
    • GATCO
    • Heathrow Airport
    • IATA
    • Manchester Airport Group
    • Prospect/PCS
• Terminal Air Navigation Services - draft RP2 Business Plan (December 2013) 
• UK TANS charge benchmarking - consultancy report by Capita for CAA (December 2013)

Other

• RP2 airline community - Special interests paper (December 2013) 
• In focus - developing the UK-Ireland performance plan for RP2 - December 2013 update  
• RP2 Revised Business Plan (2015-2019) (October 2013)
• Appendices to RP2 Revised Business Plan (October 2013)
• Agreed modifications to the requirements following publication of PRB recommendations for EU-wide targets (October 2013)
• RP2 Customer Consultation working group: Report from co-chairs (September 2013) 
• Letter to NERL setting out CAA requirements for NERL Revised Business Plan (RBP) (September 2013)
• The CAA process update for the economic regulation of NERL and contribution to the UK-Ireland FAB Performance Plan for Reference Period 2 (2015-2019) of the Single European Sky Performance Scheme: A mandate for Customer Consultation between NERL and airspace users  (April 2013)
• A consultation on the CAA's process for developing economic regulation for Reference Period 2 under the Single European Sky (July 2012)
  • Responses:
    • NATS
    • BAA
    • British Airways
    • FABEC
    • Gatwick Airport
    • IATA
    • Prospect/PCS
    • Ryanair
  • Workshop

• Documents from the CP3 review (2011-2014) and CP2 review (2006-2010) are available on the National Archives website  

Notice to NATS (EN Route) plc under section 22(11) of the Transport Act 2000 (September 2018)

In July 2018, NERL submitted regulatory accounts with an audit report that did not comply with Condition 6 of its licence. Changes to audit guidance issued by the Institute of Chartered Accountants in England and Wales have meant that auditors are no longer able to express an opinion that meets the requirement under the Condition. NERL has informed the CAA that it will work with the CAA to modify Condition 6 such that a satisfactory audit report can be obtained.

• Notice to NATS (EN Route) plc under section 22(11) of the Transport Act 2000 (September 2018)

NATS (En Route) plc Condition 16 Code of practice, December 2016

• CAA approval letter
• NERL Code of Practice

Investigation under Section 34 of the Transport Act 2000: Project Oberon

The CAA investigated an alleged breach of licence conditions by NERL's regarding its operation of the London Approach Service

The CAA found that while flight delays increased in 2016, it did not fail to take all reasonable steps to meet demand or discriminate against any party in delivering the London Approach Service. The CAA has made a number of recommendations to NERL to ensure it improves its contingency planning and the resilience of its operations in the future, and will monitor NERL's implementation and the effectiveness of the recommendations going forward.

• CAP 1578 - Investigation under section 34 of the Transport Act 2000: Project Oberon, Final Report (August 2017)
• CAP 1551 - Investigation under section 34 of the Transport Act 2000: Project Oberon, CAA provisional conclusions (May 2017)
• CAP 1527 - Notice of Oberon investigation (March 2017)
  

Project Oberon recommended that we publish data to provide increased transparency on London Approach service quality. Three Oberon Report Indicators are included: NERL Attributable Delays by London Approach Function; NERL Average Delays per Arrival by London Approach Function; and All NERL Attributable Delays per Arrival into London Airports. We are publishing such data each quarter.

Starting with the indicators to June 2018, the format of the report has changed. As well as graphs and data showing delay attributable to NERL's London Approach service, the report also includes graphs and data showing all delay (including non-NERL attributable delay) for each of the London Approach airports. The report is produced by NERL using data and commentary provided by NERL.

• Oberon Report Indicators to June 2018

Information on the CAA's concurrent powers with the Office of Fair Trading under the Competition Act 1998 and part 4 (market investigations) of the Enterprise Act 2002 is available on the  Competition powers page.