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Thursday 01 December, 2005

Civil Aviation Auth.

CAA confirms NATS price caps

Civil Aviation Authority
01 December 2005





1 December 2005



CAA CONFIRMS FINAL DECISION ON NATS PRICE CONTROLS


The Civil Aviation Authority (CAA) today published its final decision on the
regulatory price controls of National Air Traffic Services (NATS) which will
come into effect next year.  The controls are the same as those set out in the
CAA's formal proposals published for consultation on 29 September.

The price caps cover NATS (En route) plc's (NERL's) Eurocontrol and Oceanic
businesses for the five years beginning 1 January 2006, and 1 April 2006
respectively.

For the Eurocontrol business there will be an average annual real term reduction
in the pence/kilometre allowance of 3.4 per cent each year over the period
2006-2010.  The cumulative reduction over the five years is around 15 per cent.

For NERL's Oceanic business, from 1 April 2006 there will be an annual 4 per
cent reduction in prices in real terms.

The decision paper can be found on the CAA website (www.caa.co.uk) in the 
'Economic' section, click on 'News'.

For further information please contact Chris Mason on 020 7453 6026.



Notes to Editors

 1. The NATS price control review was launched in March 2004 when the CAA
    explained and sought comments on its proposed approach to the review and
    identified the main issues for the review.  The CAA subsequently published
    three sets of detailed proposals for consultation.  The first was its
    initial proposals published in November 2004, and the second its firm
    proposals published in May 2005, followed by its formal proposals in
    September 2005.

 2. The CAA received five written responses to its final proposals.

 3. The Eurocontrol business provides air traffic services to aircraft using 
    controlled UK airspace.  In 2004, the Eurocontrol business served around 2
    million flights.  The Oceanic business is a much smaller business than the
    Eurocontrol business. It provides air traffic control services for the North
    Eastern area of the Atlantic.  In 2004/05, the Oceanic business served 
    356,000 flights.

 4. As its starting point, the CAA has taken the objectives set out in the
    Transport Act 2000.  Subject to maintaining a high standard of safety, these
    are: to further the interests of users; to promote efficiency and economy by
    NERL; to secure that NERL will not find it unduly difficult to finance its
    activities; to take account of the UK's international obligations. The CAA 
    must also impose the minimum restrictions consistent with the exercise of 
    its duties.  It has also sought to follow Better Regulation Task Force 
    Principles, namely that regulation should be proportionate, accountable, 
    consistent, transparent, and targeted.







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