1.12 The new "volume term" is committed for only the first price control period, up to 2005. But the Civil Aviation Authority has recognised the need for NATS and its financiers and customers to have greater certainty about how the Company's charges will be regulated in the longer term. This is not a mere formality. For example, there had been a fundamental difference of view between NATS (and its banks) and the Regulator over whether the downturn following September 11th constituted an "exceptional circumstance", such as to allow NATS to seek an increase in prices under the existing terms of its licence. In March 2003 the CAA produced a statement of regulatory policy which clarifies its stance on a range of important issues, including support for financing new assets, and incentives for better performance and efficiency. The fact that NATS' licence continues unless and until notice of revocation is given and so is effectively for an indefinite period, has also been helpfully clarified by the CAA1. With more certainty about the stance of the Regulator, NATS has been able to raise finance from the private sector on better terms.
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1 NATS' licence continues unless and until notice of revocation by the Secretary of State. There is a 10 year minimum notice period, and such notice may not be given until 20 years.