NATS is making cost reductions

As its own contribution to the Composite Solution, NATS plans to reduce costs by some £170 million (just over ten per cent of total costs) over the four years ending 2005/06. The main sources of these reductions are savings in support costs, a pensions contributions holiday and fewer air traffic controllers than was assumed in the Airline Group's original bid for NATS. NATS has also deferred capital expenditure (in part reflecting slower projections of growth in traffic) to conserve cash. NATS still expects its investment programme to cope with the possibility of higher than expected growth in traffic over the next ten years. Because NATS expects its high case demand forecasts to be revised down, the apparent risk of a shortfall of capacity until 2009 should not be as significant as it appears.