Under the Transport Act 2000 the Government issued a licence to NATS (En Route) plc (NERL) to provide en route air traffic services in the UK.
The Act gives the CAA the role of economic regulator of NERL. The CAA exercises this role mainly through monitoring and enforcing the conditions in the Licence and through modifications to the Licence. The Licence is available below, as is a descriptive summary of the price control conditions in the Licence:
- Air Traffic Services Licence For NATS (En Route) Plc (December 2023)
- Correction to CAP2011: Economic regulation of NATS (En Route) plc: Decision on licence modifications (January 2021)
- Note on consents following NATS refinancing (August 2015)
- Note on consents issued in respect of Condition 5 or NERL Licence (July 2012)
Guidance on constructive engagement
Following the publication of our lessons learnt review findings in August 2024, we are now setting out draft guidance, for consultation, on the Constructive Engagement process for the next Heathrow price control review. We welcome views from stakeholders on this draft guidance.
Setting future price controls – review of approach
Review of approach findings
Consistent with best practice and the recommendations of Public Body Review of the CAA, we have reviewed our approach to setting price controls to identify opportunities to improve the efficiency, timeliness and effectiveness of the processes and outcomes. These documents set out the findings from our review of our approach to setting price controls (including the lessons learnt from H7 and NR23), which will inform our overall approach to future price controls.
Setting future price controls – lessons learnt from the review of approach (CAP3000)
Appendix C: Setting future price controls – lessons learnt from the review of approach (CAP3000a)
External reports
International approaches to airport and air traffic control regulation, MKmetric
Future regulatory approach – cost assessment, Grant Thornton
Consultation on review of approach
We are carrying out a review of our approach to setting price controls (including the lessons learnt from H7 and NR23) to inform our overall approach to future price controls. CAP2618 sets out our initial views on the scope of this lessons learnt review and on the key issues we should consider for the next price control reviews for HAL and NERL. We welcome views from stakeholders on these issues.
Responses
- Aer Lingus
- Airlines for America
- Airports Council International (ACI) Europe
- Arora
- British Airways
- easyJet
-
Heathrow Airport and community
- NATS (En Route) plc (NERL)
- Pandox
- Prospect
- Virgin Atlantic
NERL (NR23) Price Control Final Decision
CAP2597 sets out our Final Decision for the UK en route, London Approach and Oceanic price controls that will apply for the five calendar years from 1 January 2023 to 31 December 2027 (the NR23 period). It includes the modifications to NERL’s licence to implement the NR23 price controls.
- Economic Regulation of NATS (En Route) plc: Final Decision for the NR23 (2023 to 2027) price control review (CAP2597)
- Economic Regulation of NATS (En Route) plc: Final Decision for the NR23 (2023 to 2027) price control review (London Approach and Oceanic) (CAP2597a)
- Appendices A to D to Final Decision for the NR23 price control review (CAP2597b)
- Appendix E to Final Decision for the NR23 price control review – Final licence modifications (CAP2597c)
- Appendix F to Final Decision for the NR23 price control review - RAB Rules (CAP597d)
- Price Control Model (CAP2597e) (download spreadsheet)
- Price Control Model Guide (CAP2597f)
- CRCO Reporting Tables Nov-23 (CAP2597g)
- CRCO Additional Information Nov-23 (CAP2597h)
Reports by external consultants
NERL (NR23) Price Control Provisional Decisions
CAP2553 sets out our Provisional Decisions for the UK en route, London Approach and Oceanic price controls that will apply for the five calendar years from 1 January 2023 to 31 December 2027 (the NR23 period).
CAP2553 also sets out the statutory consultation on the proposed modifications to NERL’s licence to implement the NR23 price controls. It also contains our Decisions on non-NERL costs for the NR23 period.
- Economic Regulation of NATS (En Route) plc: Provisional Decisions for the NR23 (2023 to 2027) price control review (CAP2553)
- Economic regulation of NATS (En Route) plc: Provisional Decision for the NR23 (2023 to 2027) price control review (London Approach and Oceanic) (CAP2553a)
- NR23 Review: UK performance plan Decision on DfT, Met Office and CAA en route costs (2023 to 2027) (CAP2553b)
- Appendices A to G to Provisional Decisions for the NR23 price control review (CAP2553c)
- Appendix H to Provisional Decisions for the NR23 price control review – Proposed licence modifications (including corrigendum) (CAP 2553d)
- Appendix I to Provisional Decisions for the NR23 price control review – RAB Rules (CAP2553e)
- Price Control Model (CAP2553f)
- Price Control Model Guide (CAP2553g)
- Responses to stakeholder requests for clarification on NR23 Provisional Decision (CAP2553h)
- NR23 Provisional Decision working for the assumed cost of debt (download spreadsheet)
Reports by external consultants
- NR23 Updated Beta Assessment, Flint Global (April 2023)
- Analysis of pension costs for NATS (En Route) plc – Government Actuary Department (June 2023)
- Letter of comfort: Financial model assurance for the NERL price control NR23, Vercity (July 2023)
Responses
NERL (NR23) Price Control Initial Proposals
CAP2394 sets out for consultation our Initial Proposals for the UK en route, London Approach and Oceanic price controls that will apply for the five calendar years from 1 January 2023 to 31 December 2027 (the NR23 period).
- Economic regulation of NATS (En Route) plc: Initial Proposals for the next price control review (NR23)(CAP2394) (October 2022)
- Initial Proposals for the next price control review (NR23) – Other price controls (CAP2394a)
- Appendices A to G to initial proposals for the next price control review (NR23) (CAP2394b)
- Appendices H to J to initial proposals for the next price control review (NR23) (CAP2394c)
- CRCO reporting tables Oct-22 (CAP2394d)
- Appendix I Draft RAB rules (CAP2394e)
Reports by external consultants
- Analysis of pensions costs for NATS (En Route) Plc, Government Actuary’s Department (June 2022)
- Estimating NERL’s Beta at NR23, Flint Global (May 2022)
- NATS (En Route) PLC SIP – Independent Reviewer Report, Egis (September 2022)
- Review of NERL Capex Engagement Incentive, Egis (September 2022)
- Support on cost assessment for NR23 period and reconciliation review (2020-2022), Steer and Integra (October 2022)
- Tax review for NR23 IPs, Grant Thornton (October 2022)
- Traffic sensitivities technical note, Steer (October 2022)
Responses
NERL price controls review 2023 to 2027 (NR23)
In response to the CMA's final report on RP3 and the impact of COVID-19, we are reviewing NERL's regulatory arrangements. The review - NR23 - will take both a backward look at NERL's determination for RP3 in light of the impact of COVID-19, and establish new price controls for NERL's regulated activities for the period 2023 to 2027 inclusive. NR23 encompasses activities previously sometimes referred to as RP3 interim arrangements (RP3I).
Updated timetable for NR23 price control review
Following review of the NR23 timetable, we consider it is appropriate to delay the publication of the CAA’s Initial Proposals to provide sufficient time to consider material policy issues and to ensure further robust engagement with NERL and stakeholders. Details of the updated timetable are set out in the below letter.
Invitation to stakeholders - February 2022
On 7 February 2022, NERL published its business plan for the NR23 price control review. As noted during the customer engagement process in autumn 2021, we have invited stakeholder views on NERL’s business plan to help inform how we develop the CAA’s Initial Proposals.
- Updated letter to stakeholders inviting submissions of views on NERL’s NR23 Business Plan (1 March 2022)
- Letter to stakeholders inviting submission of views on NERL’s NR23 Business Plan (February 2022)
Stakeholders provided the following responses to the CAA:
- Air Canada
- Air France
- British Airways
- easyJet
- Emirates
- Gatwick Airport
- IATA
- Lufthansa
- Prospect
- Ryanair
- Virgin Atlantic
Update - December 2021
CAP2306 sets out our request for further information and detail in relation to the operating expenditure, capital expenditure and non-regulatory revenue building blocks to be included in NERL's NR23 business plan, which we expect to be submitted by 7 February 2022.
- Request for information to NERL for the NR23 business plan submission: cost and revenue building blocks (CAP2306) (December 2021)
- CAA letter to NERL: Template for NERL's building block update submission
- Building block template (Excel file)
- Opex template (Excel file)
Update - November 2021
The document covers the following topics:
- stakeholders' responses to the June 2021 Update (CAP2160), in relation to the 2020-2022 reconciliation review, and our views on these responses;
- in the appendix, the request for information to NERL, which provides a high-level overview of the information we require to carry out the reconciliation review; and
- a more detailed description of the evidence that is being sought from NERL as part of its submission for each building block.
Update - June 2021
CAP2160 provides further details in relation to the next NERL price control review (NR23), including:
- our current view on the timetable;
- guidance for NERL in developing its business plan and the customer engagement process with airspace users; and
- the reconciliation review for NERL's revenues for 2020 to 2022.
Responses to CAP2160
Update - August 2021
CAA letter to NERL: further guidance on the approach to the next price control review, NR23
Update - March 2021
- Economic regulation of NATS (En Route) plc: Update on approach to the next price control review (CAP2119) (March 2021)
Responses to CAP2119
Approach to next price control review - December 2020
- Economic regulation of NATS En Route plc: Consultation on the approach to the next price control review (CAP1994) (December 2020)
Responses to CAP1994
RP3 UK performance plan – UK final decisions
Exceptional measures for 2022
Decision to modify the price controls for NATS (En Route) Plc's (NERL's) regulated activities under its air traffic services licence for the year 2022, following consultation of CAP2245.
- Exceptional measures for the economic regulation of NATS (En Route) plc: decision on licence modifications (CAP2279) (November 2021
NERL RP3 price control conditions: Exceptional measures for 2022
In October 2021 we consulted on modifications to the price controls for NATS (En Route) Plc's (NERL's) regulated activities under its air traffic services licence for the year 2022. These related mainly to exceptional measures in response to the impact of covid-19 on traffic levels.
- Economic regulation of NATS (En Route) Plc: consultation on licence modifications to implement exceptional measures (CAP2245) (October 2021)
Responses to CAP2245
NERL RP3 price controls decision
Decision on licence modifications to NERL's air traffic services to implement the price controls for the period 2020-2022. The modifications implement the CMA's decision, introduce a new licence condition to establish processes and procedures to coordinate airspace modernisation, modifications to improve the clarity of certain obligations in the licence, and guidance relating to NERL's capital expenditure incentives.
Economic regulation for Reference Period 3 under the Single European Sky (2020-2024)
RP3 UK performance plan - CAA final decisions
The CAA has made its final decisions on the UK RP3 performance plan. These decisions are contained in the documents below. On 10 September 2019, NATS formally advised the CAA that it rejected our decisions in respect of the NERL UK and Oceanic price controls. Consistent with the statutory provisions within the Transport Act, on 19 November 2019 the Civil Aviation Authority referred this to the Competitions and Markets Authority to consider and report in due course.
- Economic regulation of NATS (En Route) Plc consultation on licence modifications and guidance (CAP1967) (September 2020)
Responses to CAP1967
- Reference to the CMA - CMA Final Report (August 2020)
- Reference to the CMA - CMA Final Report appendices (August 2020)
- Reference to the CMA - CMA Final Report glossary (August 2020)
- CAA response to CMA request to extend reference period (May 2020)
- CMA request to extend reference period (May 2020)
- Reference to the CMA - CAA response to CMA Provisional Findings - Appendix A Responding to Covid-19 (April 2020)
- Reference to the CMA - CAA response to CMA Provisional Findings (April 2020)
- Reference to the CMA - notice of variation of reference (February 2020)
- Revised draft Condition 10a - Airspace Modernisation
- Guidance note: NER Licence Condition 10a _ Airspace modernisation
- Reference to the CMA of NERL RP3 price controls: CAA response to NERL's Statement of Case
- CAA letter to CMA re: reference of the NERL RP3 price controls
- CAA reference to the Competition and Markets Authority of the NERL RP3 price controls
- NATS letter to CAA re: RP3 Final Decision Document CAP 1830
- CAA RP3 Decision Statement
- UK RP3 CAA decision document(CAP 1830)
- Appendices to UK RP3 CAA decision document (CAP 1830a)
- UK RP3 CAA Decision Document - RAB Rules Working Paper (CAP 1830b)
- UK RP3 performance plan
- Letter from Paul Smith to Martin Rolfe - Summary of CAA RP3 conclusions (August 2019)
Consultancy reports
- Europe Economics - Comments on NERA/NERL critiques of Europe Economics' WACC analysis (June 2019)
- GAD - Review of further evidence provided by NERL (June 2019)
- Grant Thornton - NATS Financial Model 2018 - Findings from agreed testing procedures, updated for CAA final decision on price controls for Reference Period 3 (August 2019)
- PwC Economics - Estimating the cost of capital for H7 and RP3 - responses to stakeholder views on total market return and debt beta (August 2019)
CAA draft performance plan proposals for consultation
This document sets out for consultation the CAA's proposals for the UK's draft performance plan for Reference Period 3 (2020-2024)
- Draft UK Reference Period 3 Performance Plan proposals (February 2019)
- Appendices to Draft UK Reference Period 3 Performance Plan proposals (February 2019)
- Update on cost of capital for RP3 and H7 (February 2019)
- NERL capital expenditure (capex) and Airspace Modernisation Strategy (AMS) funds governance policy and processes - draft for stakeholder comment (July 2019)
- Horizontal flight efficiency (KEA) target for RP3 (July 2019)
- Explanatory note: draft airspace modernisation condition for NERL licence (June 2019)
- Working note: Capex and Airspace Modernisation Strategy (AMS) funds governance policy development (April 2019)
Consultancy reports supporting the CAA's proposals for the UK's RP3 draft performance plan
- Components of the Cost of Capital for NERL by Europe Economics (February 2019)
- NERL's Cost Allocation and Non-Regulatory Income Forecasts by CEPA (February 2019)
- NATS (En Route) plc SIP: Review of SIP Process by Grant Bremer (February 2019)
- NERL's forward-looking capital programme and expenditure efficiency by Steer Group (February 2019)
- NATS Financial Model 2018 - Findings from agreed testing procedures by Grant Thornton (February 2019)
- H7 Initial WACC response document by PwC (February 2019)
- The trustees of the CAA Pension Scheme wrote a letter to the CAA in January 2019 about a Regulatory Policy Statement on NERL's Pension Costs.
Responses to consultation document
- NERL (response, Appendix E, Appendix F, Appendix G)
- NSL
- IATA (response, Attachment 1, Attachment 2, Attachment 3)
- IAG (response, cost of capital)
- Emirates
- Ryanair
- Virgin
- Heathrow Airport
- Prospect
- PCS (Aviation group)
NERL RP3 Business Plan
RP3 Customer Consultation Working Group
Consultancy Reports
- Updated Weighted Average Cost of Capital for NATS (En-Route) plc at RP3 - report by NERA (September 2018)
- Staff Operating Expenditure for Air Traffic Control - report by NERA (March 2018)
- GAD report
Views on NERL's RP3 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)
- IATA letter to CAA on NERL Business Plan (letter, Appendix 1, Appendix 2, Appendix 3, Appendix 4)
- IAG letter to CAA on NERL Business Plan
Expectations for NERL Revised Business Plan
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 documents ought 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:
Modifications to Condition 2, introducing a requirement to develop a resilience plan
Responses to our consultation (CAP 1639):
- NERL
- British Airways
- Colin Hume, AOC Consultant
- Prospect ATCO's branch
- Guild of Air Traffic Control Officers
July 2020 - NERL response to resilience plan assessment
June 2020 - resilience plan assessment - summary report
May 2020 - CAA approval of NERL resilience plan
Advice to the Secretary of State for Transport on licence duration
Advice to the Secretary of State for Transport on extending the length of the notice provisions for termination in the Air Traffic Services licence.
NERL capital investment
Response to stakeholders on programmes and projects for engagement incentive August 2021
Letter to stakeholders on programmes and projects for engagement incentive June 2021
Responses
- SIP22 Quarter 1 Update Independent Reviewer Report (June 2022)
- SIP22 Independent Reviewer Report (February 2022)
- SIP21 Quarter 3 Update Independent Reviewer Report (November 2021)
- SIP21 Interim Independent Reviewer Report (August 2021)
- SIP21 Addendum And Quarter 1 Update (May 2021)
- SIP21 Independent Reviewer Report (March 2021)
- Guidance on NERL's capital expenditure engagement incentive (December 2020)
- SIP20 Independent Reviewer Report (March 2020)
- SIP19 Interim Independent Reviewer Report (July 2019)
- Letter from CAA to NERL about SIP19 (May 2019)
- Letter from CAA to NERL about SIP19 (March 2019)
- SIP19 Independent Review Report (March 2019)
- Letter from CAA to NATS about interim SIP18 (October 2018)
- SIP18 Interim Independent Review Report (July 2018)
- Letter from CAA to NATS about SIP18 (March 2018)
- SIP18 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)
Modifications to Conditions 10 and 10(a) - Reporting on detailed airspace and technology programmes
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:
- 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 licence duration
Advice to the Secretary of State for Transport on extending the length of the notice provisions for termination in the Air Traffic Services licence.
UK National Supervisory Authority report on costs exempt for RP2 (2015-19)
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)
UK National Supervisory Authority report on costs exempt for RP1 (2012-14)
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.
Licence modifications in respect of governance and ring-fencing
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:
RP2 2015 - 2019 Price Control Licence Conditions
- 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)
Proposals to modify licence conditions
- CAP 1816 - Proposal to modify Condition 6 (regulatory accounting requirements) of NATS (En Route) plc air traffic service licence (June 2019)
- 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:
Licence enforcement guidance & prioritisation principles
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.
In March 2024, we published a statement of policy on penalties to support our enforcement work under Chapter 1 of the TA00, as modified by section 10 of the Air Traffic Management and Unmanned Aircraft Act 2021. This statement followed a consultation in December 2023. Alongside this statement of policy, we also published a consultation response document.
Economic regulation for Reference Period 2 under the Single European Sky (2015-2019)
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)
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:
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)
- 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:
- Workshop
Monitoring and enforcement of the NATS En Route plc (NERL) licence
Review of the 28 August 2023 NATS sub-system failure
Review of space based automatic dependent surveillance (ADS-B)
Reports following Project Palamon’s recommendations
- NERL update on the implementation of the Palamon recommendations (March 2024)
- NERL ATC Staffing Resilience Plan update (March 2024)
- NERL update on the implementation of the Palamon recommendations (September 2023)
- NERL update on the implementation of the Palamon recommendations (April 2023)
- NERL ATC Staffing Resilience Plan update (April 2023)
- NERL update on the implementation of the Palamon recommendations (September 2022)
- NERL update on the implementation of the Palamon recommendations (March 2022)
- NERL ATC Staffing Resilience Plan update (January 2022)
- NERL update on the implementation of the Palamon recommendations (January 2022)
Investigation under Section 34 of the Transport Act 2000: Project Palamon (February 2021)
We undertook an investigation (Project Palamon) under section 34 of the Transport Act 2000 (TA00) to consider alleged contraventions by NERL of certain statutory duties under sections 8(1)(c) and 8(1)(d) of the TA00 and certain licence conditions. This investigation followed complaints by Ryanair and Stansted Airport Limited about air traffic flow management delays experienced by airlines and passengers of Stansted and Luton airports.
In February 2021, we published our final decision (along with Annex 1) in relation to an investigation (Project Palamon) under section 34 of the Transport Act 2000. This investigation follows an earlier investigation conducted by the CAA addressing similar complaints brought by Ryanair and Stansted in 2016 in relation to NERL's performance (Project Oberon).
In our final decision we found that:
- NERL contravened its statutory and Licence duties and obligations in the period January 2019 to March 2020 in relation to the provision of sufficient staffing resilience in the London Approach Service for users of Stansted and Luton airports; and
- in relation to the other allegations raised as part of the complaints, including on airspace capacity, coding and discrimination, NERL has not contravened its statutory and Licence duties and obligations.
In making these findings, we took into account the very difficult circumstances faced by the aviation sector and the significant reduction in air traffic volumes, following the impact of the covid-19 pandemic. We also note that forecasts for recovery are highly uncertain and it appears likely it will take some time to reach traffic levels seen in 2018 and 2019. Given these circumstances, we consider it is not appropriate for us to take formal enforcement action, as the circumstances leading to the investigation are not currently occurring. Nonetheless, we make a number of recommendations that we expect NERL (and other stakeholders) to adopt in the future as they plan how to provide a resilient service when demand begins to recover, and in the longer term.
With the final decision we also published:
- an annex to the final decision summarising the representations we received on the draft decision and setting out the CAA's way forward in response; and
- non-confidential version of the responses we received to the Draft Decision.
Palamon documents
- Final Decision (25 February 2021)
- Final Decision Annex 1: (25 February 2021)
- Non-Confidential versions of responses received to the Draft Decision (Published 25 February 2021):
- Draft Decision (17 September 2021)
- Alongside this Draft Decision, we also published a report on the assessment of NERL delays in the London Approach service by the Performance Review Unit of Eurocontrol. This report was produced at our request in support of the investigation.
Notice to NATS (En Route) plc under section 22(11) of the Transport Act 2000 (September 2020)
Under Conditions 5 and 6 of its licence NERL has to provide regulatory accounts and certain certificates relating to its financial and operational resources and its compliance with certain conditions of its licence by 31 July each year. Because of the uncertainty with traffic forecasts due to the Covid-19 crisis, NERL was unable to provide the accounts or certificates by 31 July 2020. NERL has submitted a plan to us to provide the accounts and certificates by 31 October 2020. On 28 September we served a notice on NERL of the licence breach, but said we do not intend to make a final order in relation of the breach at present.
Investigation under Section 34 of the Transport Act 2000: Project Palamon (October 2018)
We have opened an investigation (project Palamon) under section 34 of the Transport Act 2000 (TA00) to consider alleged contraventions by a licence holder of certain statutory duties under sections 8(1)(c) and 8(1)(d) of the TA00 and certain licence conditions.
At this stage, no assumption should be made about whether there has been any contravention.
Civil Aviation Authority Transport Act 2000 investigation - draft decision (September 2020)
We have published our draft decision in relation to an investigation (Project Palamon) under section 34 of the Transport Act 2000 (TA00). We have considered alleged contraventions by NATS (En-Route) Plc (“NERL”) of certain statutory duties under the TA00 and certain conditions of its Air Traffic Services Licence. This investigation followed complaints by Ryanair and Stansted Airport Limited (STAL) about air traffic flow management delays experienced by airlines and passengers of Stansted and Luton airports.
This investigation follows an earlier investigation conducted by the CAA addressing similar complaints brought by Ryanair and STAL in 2016 in relation to NERL's performance (Project Oberon).
In our draft decision we provisionally find that:
- In relation to the provision of sufficient staffing resilience in the London Approach Service to users of Stansted and Luton, NERL has contravened its duties in the period January 2019 to March 2020;
- In relation to other parts of the investigation, including on airspace capacity, coding and discrimination, NERL has not contravened its duties and obligations.
This is a draft decision and we welcome the views of all stakeholders on our provisional findings by 19 October 2020 (to economicregulation@caa.co.uk). We will consider all the representations we receive carefully and intend to issue a final decision later this year.
In making these provisional findings, we have taken account of the very difficult circumstances faced by the aviation sector and that air traffic volumes have reduced significantly, following the impact of the Covid-19 pandemic. We also note that forecasts for recovery are highly uncertain and it appears likely it will take some time to reach traffic levels seen in 2018 and 2019. These circumstances suggest that it will not be appropriate to take formal enforcement action, as the circumstances leading to the investigation are not currently occurring. Nonetheless, we make a number of recommendations that we expect NERL (and other stakeholders) to take into account in the future as they plan how to provide a resilient service when demand begins to recover, and in the longer term.
Alongside the draft decision we have also published a report on the assessment of NERL delays in the London Approach service by the Performance Review Unit of Eurocontrol. This report was produced at our request in support of the investigation.
Notices to NATS (EN Route) plc under section 22(11) of the Transport Act 2000 (September 2018 and November 2019)
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. Condition 6 has now been modified. However, before that occurred, NERL submitted regulatory accounts that did not comply with Condition 6 of its licence in June 2019.
- Notice to NATS (En Route) plc under section 22(1) of the Transport Act 2000 (November 2019)
- 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)
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.
Competition powers
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.
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