12 The Civil Aviation Authority has made two main contributions to giving NATS more robust finances. Firstly, following consultation with the industry, it agreed that the Company's prices should fall less in real terms than the price cuts originally planned for the first five years of the PPP. Though these concessions will cost airlines some £100 million over the period 2003-2010, NATS' prices should still improve relative to prices elsewhere in Europe, where operators raised their charges by 12 per cent on average in 2002. Indeed, on the basis of the amounts actually paid by air users NATS has improved to become the fourth most expensive service provider in Europe. Secondly, the Authority has introduced an automatic risk sharing mechanism for the first control period for reducing the impact of future traffic fluctuations on NATS, by allowing it to raise its prices automatically to recover half of lost revenue attributable to traffic falls below the level forecast by the Company in November 2001, rising to 80 per cent of lost revenue in extreme circumstances.
13 Following the good credit ratings that NATS received from major ratings agencies, and armed with the £130 million of additional shareholders' funds, in August 2003 NATS successfully completed the refinancing of its debt. It replaced with the proceeds of a bond issue the remaining £600 million of debt that it took on when the Airline Group bought a controlling stake in the Company. The practical advantage of this refinancing is that bonds are a cheaper source of very long term finance, without more onerous conditions, and reduce the company's dependence on bank finance.