The Committee is to hold a hearing on Monday 18 November in connection with this inquiry. The purpose of this memorandum is to update the Committee on NATS' performance on safety and delays since the National Audit Office published its Report on the NATS PPP in July.
This has proved to be a challenging year for NATS, both financially and operationally. Traffic volumes have remained depressed following the events of 11 September 2001, particularly over the North Atlantic. Chargeable traffic in the financial year to date is running at 15.5% below the 2000 traffic forecasts on which the original price cap was based.
The low cost sector has, however, continued its strong growth. Such flights place heavy demands on air traffic control resources due in part to the short distances typically flown, and their concentration on particular routes. These flights generate significantly less revenue than heavy traffic and overflights.
We have taken steps to reduce costs, conserve cash and attract new capital. We have worked closely with our lenders and shareholders and sought a relaxation of the regulatory price-cap from the Civil Aviation Authority. The CAA's Consultation Document on our application to relax the cap was published on 17 October and we expect a final decision by the end of November.