Thomas Cook, Virgin Atlantic,Lufthansa and Tui sell their 21% stake in NATS to UK pension fund

Thomas Cook, Virgin Atlantic, TUI Travel and Lufthansa have agreed to sell most of their stakes in NATS to Britain’s biggest pension fund, the Universities Superannuation Scheme (USS). USS will pay £152m for 49.9% of the “Airline Group”, which owns 41.9% of NATS. The deal indirectly gives USS a 21% stake in Nats, which handles more than 6,000 flights a day. Thomas Cook and TUI each issued statements to the London Stock Exchange saying they sold their stakes for £38m and that Nats was not a core part of their operations. BA, easyJet and the Monarch Airlines retirement plan, the other owners of the Airline Group, will keep their stakes. A spokesman for the Airline Group said BA and easyJet were the two companies most reliant on Nats so they kept their stakes to maintain their influence over operations. Nats is controlled by the government, which has a 49% stake plus a special share. The government had intended to sell half its stake but ministers changed their minds when faced with a potential outcry (Feb 2011) over letting air traffic control out of public hands.
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Thomas Cook and Virgin Atlantic sell air traffic control stake to pension fund

Universities pension fund will pay £152m for 49.9% in Airline Group, while BA, and easyJet  retain ownership
  • 19 November 2013 (Guardian)

National Air Traffic Services Heathrow

The new air traffic control tower at Heathrow airport run by the National Air Traffic Services. Photograph: David Levene

Thomas Cook, Virgin Atlantic, TUI Travel and Deutsche Lufthansa have agreed to sell most of their stakes in National Air Traffic Services (Nats) to Britain’s biggest pension fund.

The Universities Superannuation Scheme (USS) will pay £152m for 49.9% of the Airline Group, which owns 41.9% of Nats. The deal indirectly gives USS a 21% stake in Nats, which directs air traffic above the UK and handles more than 6,000 flights a day.

Thomas Cook and TUI each issued statements to the London Stock Exchange saying they sold their stakes for £38m and that Nats was not a core part of their operations.

British Airways, easyJet and the Monarch Airlines retirement plan, the other owners of the Airline Group, will keep their stakes.

A spokesman for the Airline Group said BA and easyJet were the two companies most reliant on Nats and that they kept their stakes to maintain their influence over operations.

Nats is controlled by the government, which has a 49% stake plus a special share. The government had intended to sell half its stake but ministers changed their minds when faced with a potential outcry over letting air traffic control out of public hands.

USS was considered a suitable buyer because it would be a long-term investor. Nats was controversially part-privatised by the Labour government in 2001.

Nats said: “As we continue to expand and develop, USS’s insight and expertise will undoubtedly benefit the continued growth of the business and we look forward to mutual future success.”

The travel companies had been looking to reduce their stakes in Nats for months. Other potential buyers were said to have included infrastructure companies and overseas air traffic controllers.

http://www.theguardian.com/business/2013/nov/19/thomas-cook-virgin-atlantic-sell-air-traffic-control-stake-pension

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also Wall Street Journal http://online.wsj.com/article/BT-CO-20131119-700477.html?dsk=y

 


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NATS press release

19.11.2013

NATS statement on the Airline Group share sale to USS

NATS welcomes USS (The Universities Superannuation Scheme Limited) as shareholders and a member of the Airline Group and we look forward to working with USS representatives on the NATS Board.

It is testament to the strength of the business that an investment in NATS matches the long-term criteria of the UK’s largest pension fund, with their long-term commitment to provide high quality pensions for the higher education sector.

USS acquiring a 49.9% non-controlling stake in The Airline Group, which is a 41.9% shareholder in NATS, is the most significant change in ownership since the company became a Public-Private Partnership (PPP) in 2001.

Since then, our delay and safety performance have improved significantly and we have introduced innovative measures to help generate significant fuel savings for our customers, all while reducing the underlying controllable operating costs by around a third in real terms in our regulated business. Our strategy has delivered service innovation to existing customers and attracted a range of new contracts, allowing NATS to strengthen its core UK business whilst expanding to operate internationally in more than 30 countries.

As we continue to expand and develop, USS’s insight and expertise will undoubtedly benefit the continued growth of the business and we look forward to mutual future success.

http://www.nats.aero/news/nats-statement/

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Earlier

Airlines warn Tories not to sell Government 49% stake in NATS

6.2.2011

Seven of Britain’s leading airlines have warned the government not to sell Nats,
the national air traffic control service, arguing that the system is a key strategic
asset not suitable for full privatisation.   
In a letter obtained by the Observer, the Airline Group warns of “highly damaging” consequences if the state sells all of its 49% stake, an option under consideration by transport secretary Philip Hammond.  The Airline Group, which has a 42% stake in Nats, said in the letter to Hammond that it would sell its interest if the government failed to retain a shareholding of at least 25%.

http://www.airportwatch.org.uk/?p=2795

 

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earlier

Airlines warn Tories not to sell Government 49% stake in NATS

Edit this entry.

6.2.2011 (Observer)
Seven leading carriers condemn government plans as ‘highly damaging’ for a key
strategic asset
by Dan Milmo

Seven of Britain’s leading airlines have warned the government not to sell Nats,
the national air traffic control service, arguing that the system is a key strategic
asset not suitable for full privatisation.

In a letter obtained by the Observer, the Airline Group warns of “highly damaging” consequences if the state sells
all of its 49% stake, an option under consideration by transport secretary Philip
Hammond.

The Airline Group, which has a 42% stake in Nats, said in the letter to Hammond
that it would sell its interest if the government failed to retain a shareholding
of at least 25%.

Peter Read, the group’s chairman, said a government sell-out would risk relegating
Britain to the status of a bit-player in discussions over reforms of European
air traffic control: “It would be highly damaging if we were left on the sidelines
to watch while others, notably France, Germany and Spain, decided the future of
the air traffic control [ATC] industry. The evidence indicates a real risk that
such an outcome would occur if the UK was the only country without a government
shareholding in its national ATC company. The country’s interests would be best
served if the government were to retain a significant shareholding, perhaps 25%
as a minimum.”

Highlighting the consequences for future airline ownership in Nats, he said:
“The absence of a government stake would make it difficult to justify continued
airline participation in the ownership of Nats.”

The group – British Airways, Virgin, bmi, EasyJet, Monarch Airlines, Thomas Cook and Tui Travel – bought its shareholding in 2001 when the Blair administration part-privatised
the business. The carriers are concerned that the government’s remaining Nats
stake is among assets earmarked for disposal by the chancellor, George Osborne, alongside the potential sale of the Tote, a stake in the Royal Mail and part
of the student loan portfolio.

Read said the government’s need to raise money was “understandable” but it must
not be to the detriment of the UK’s main air traffic controller. Citing a recent
reduction in flight delays caused by air traffic control, he said: “It would be
in no one’s interest, including the government’s, if Nats were to revert, even
partially, to its bad old ways.”

Maria Eagle, the shadow transport secretary, said any sale of the government’s
Nats stake would be “ideologically driven” and about “short-term profit” rather
than safety and security: “They should listen to the warning from the airlines
that the country’s best interests would be served by government retaining at least
a 25% stake. If they go ahead with this reckless plan, Labour will oppose their
plans and vote against them in parliament.”

Potential bidders for the Nats stake include UK service company Serco, Gatwick
airport owner Global Infrastructure Partners and Lockheed Martin, the US aerospace
and defence giant.

A Department for Transport spokesperson said: “The DfT remains in discussions
with the Treasury over Nats and no announcement will be made until the budget
next month.”

Nats, which handled 2.2m flights in 2009, posted a pre-tax profit of £78.3m in
the year to 31 March 2010, on turnover of £755m. In the current financial year
it has already paid shareholders an interim dividend of £20m.
see earlier

Budget 2010: Air traffic control organisation Nats to be sold off

Treasury in talks to fellow shareholders about selling off its 49% stake in Nats
air traffic control service

by Dan Milmo

  • Control tower, Edinburgh airport

     

  • The government is planning to sell off its stake in Nats, the national air traffic
    control service. Above, control tower at Edinburgh airport. Photograph: Danny
    Lawson/PA

Britain’s national air traffic control service could follow the High Speed One rail link into full private ownership after the government raised the sale of its shareholding
in Nats (formerly known as National Air Traffic Services) today.

The Treasury is to open discussions with fellow shareholders in Britain’s dominant
air traffic controller over selling its 49% stake, the chancellor, George Osborne,
said in his budget speech today. Nats is 42%-owned by a consortium of airlines includingeasyJet, British Airways and Virgin Atlantic, with 5% controlled by staff and a further
4% owned by airport group BAA. A spokesman for easyJet said the airline would
oppose selling the shareholding to a private investor more interested in profit
than running an efficient service.

“Profit should not take precedence over the efficient running of UK airspace,
so we will need to look at this carefully,” he said. The spokesman added that
easyJet would not support a sale that would lead to higher air traffic control
charges.

Nats was heavily criticised for its handling of the unprecedented six-day closure of British airspace in
April, after a cloud of volcanic ash drifted across the UK. However, blame was
later shifted by airlines towards the Civil Aviation Authority, which oversaw
the safety guidelines that grounded millions of passengers and thousands of flights.

Prospect, the union that represents more than 3,000 air traffic controllers,
said the proposal was a “short-sighted” and a “knee-jerk” reaction.

“A safe, efficient and effective air traffic control system is of crucial interest
not only to the UK economy but also to every member of the travelling public,”
said Garry Graham, Prospect’s national secretary for aviation. “This proposed
sale has nothing to do with supporting a safe and effective air traffic control
system and is entirely Treasury-driven.”

On Monday the government put a 30-year concession to operate the High Speed One
rail link up for sale and hopes to raise £1.5bn from the process. Eurotunnel, owner of the Channel tunnel, confirmed that it is interested in
bidding as part of a consortium. The Treasury also confirmed today that it is
exploring the sale of the Tote betting service and the Dartford river crossing.
see earlier

‘Shake-Up’ Of Air Traffic Control Service NATS

16.10.2009  (Yahoo news)

Airlines are discussing a shake-up in the ownership of the National Air Traffic Control Service, Sky News can reveal.

Nats is part-owned by a consortium of commercial airlines and directs aircraft
through UK air-space.

The Government currently retains a 49% stake in the business.

Sky’s City editor Mark Kleinman said:  “There are seven airlines which collectively
form the airline group. They own 42% of Nats.

“Some of these airlines including Virgin Atlantic and bmi, which is now owned
by German airline Lufthansa, are keen to sell their stakes in the airline group
to generate cash.

“But there is one stumbling block which is that easyjet, which is another member
of this airline group, does not want the others to sell out.”

He added: “There are also a couple of other potential obstacles to the sale of
this stake.

“One is that none of the airlines can sell until Prestwick, the new national air traffic control
centre, is completed, which is due to take place in the early part of next year.

“The other is that the Government, which owns 49% of Nats, has a right of veto
over any plans by the airlines to sell at any point in the future even after Prestwick
is completed.”

Nats was not on the list of public assets that Gordon Brown earlier this week said would be sold to raise a total of £16bn.

Kleinman said: “That’s partly because it’s potentially very, very sensitive,
particularly in the run-up to the General Election. Nats is what you might call
a strategic asset.”

Nats operates at 15 UK airports.  It handled two million flights and 220 million
passengers in 2007.

In 2001, Nats became a public-private partnership, and in 2008, it made profits
of £66m.  It has debts of £538m.

http://uk.news.yahoo.com/5/20091015/tuk-shake-up-of-air-traffic-control-serv-45dbed5.html

 

 

 

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