151. Would you like to estimate what year that would be, please?
(Mr Everitt) What has gone on here economically is that the taxpayer has taken a very sizable sum, in other words in lieu of certainly dividends over the next few years. That is really what has gone on here.
152. When you go to the bank for any working capital, like you did last year, you turn up to the Government, you went to the Government because the bank said they would give you no more.
(Mr Everitt) We were in a period where we had not settled with the Civil Aviation Authority and the Civil Aviation Authority were considering our application for price adjustments. This was a temporary facility, hence it ran out in September, to tide us over a period to enable the CAA to make a decision. It has taken longer to get the CAA decision but we have not had to call on that money. It is not a precedent for the future.
153. You are being sent notes that are quicker than your answers at the moment. When you look at any company, and if you look at this one in particular, you realise because of the viable nature of it as an entity you can load some debt on to a company but at one point the bank say "no more". How close would you be to that point where the bank say no more? How much debt would you have to have before this company becomes non-viable and you will you have to move to put it into administration? have you worked out a scenario? Have you got an exit route mapped out?
(Ms Lomax) The CAA has made it clear that it thinks that an appropriate financial structure for NATS in the current circumstances, given the risks as we now see them post September 11, has less debt than it had at the time the PPP was concluded. That is part of what the financial restructuring is achieving. Both the government and the new shareholder will put in some more equity to reduce the amount of bank borrowing levels. That is the essence of the composite agreement that is being discussed at the moment. The details on it are not finalised but at the moment that is where we are.
154. Do not tell me that our partners are going to borrow this money off the banks and incur a further debt on the company, they are going to put in cash, are they?
(Ms Lomax) This is a conversation that is going on between NATS and the CAA, I do not want to anticipate a deal which has not yet been done.
Chairman: You are going to have to leave it there.
Mr Davidson
155. Can I ask Mr Everitt, if I heard you correctly you mentioned that the airlines were going to have a 12% reduction in charges.
(Mr Everitt) The average increase in Europe this calender year was 12%, that took effect last April. We went down 1.5%.
156. That is a 13.5% difference had we been following. I am not clear in terms of the scale of this how much you receive in income overall from airlines?
(Mr Everitt) Our total income is just under £500 million a year from airlines in the en route business and another £80 million or so in the airports business.
157. Leaving aside 13.5%, that is too complicated. If I took 10% of that it is £50 million that airlines would have saved by your charges not having gone up, considering a consortium of airlines paid round about 50 million for a share in yourselves they have effectively got most of the money back in 15 months or so?
(Mr Everitt) They are about 25% of our costs. They pay about 25% of our charges.
158. The reduced charges they are paying is in effect a shareholder dividend for them and they have got a substantial percentage of their money back already.
(Mr Everitt) I think there are very few airlines that would see it quite that way. They have clearly lost significant sums of money in the past 12 months, certainly the major carriers have obviously tremendous difficulties.
159. In terms of those that put in the 50 odd million to yourselves they have had a substantial proportion of that back already in reduced charges?
(Mr Everitt) I think it is difficult to characterise it in that way because whether they invested in us or not they would still-