NATS the company that runs the airspace in the United Kingdom has been marked as a sale target by the UK Department for Transport who have brought in Merrill Lynch Bank of America to advise. Any sale, leading to the privatisation of NATS should lead to a windfall of £500 million for the UK taxpayer.
At the moment NATS is 42% owned by The Airline Group, which as the name suggests, is made up of seven UK-based airlines including BA, BMI, Virgin Atlantic and easyjet, Monarch, Thomas Cook Group and Thompson Airways. These airlines are split on the merits of the sale with some pleased about the potential cash bonanza while others worry about the loss of influence a sale would bring. easyJet along with some other members of The Airline Group have told the Department for Transport (DfT) that they will oppose a sale of the Government’s controlling shareholding to a single buyer who might load the NATS balance sheet with debt. This is an excuse in part because the real problem for airlines remains the potential loss of influence. The 42% stake held by The Airline Group cannot be sold off unless six of the seven airline members agree to it. It is evident that easyjet will be at the vanguard of the anti-sale group.
But what if NATS were to be sold off to Eurocontrol or similar? This would be a wonderful development. It is true to say that if the UK government were serious about reducing its carbon footprint then it would engineer a process that allowed for a sale to another large European air traffic operator to help along integration for a future with a single one air traffic controller.
BAA, which owns Heathrow Airport, is likely to sell its 5% stake in NATS as part of a wider restructuring of the company’s investor register. Given that the shareholding is a non-core asset for BAA, that’s hardly surprising.