Thursday, December 18, 2014

U.K. Air-Traffic Agency Faces Financial Hit from Disruption: Service Provider Was Responsible for Flight Disruption Across Much of the U.K.

The Wall Street Journal
Dec. 18, 2014 2:33 a.m. ET

LONDON—The U.K. air traffic services provider responsible for Friday’s disruption of flights across much of the country said it would suffer a financial hit from the disturbance even as the country’s regulator said a fine was unlikely.

“Customers will receive a rebate on charges in the future,” air traffic organization NATS said in a statement late Wednesday. “The amount is being calculated and will be notified to customers in due course,” it said.

Andrew Haines, chief executive of the Civil Aviation Authority told the U.K. Parliament’s transport committee on Wednesday that the disruptions were probably not severe enough to trigger a fine under the limited powers the regulator has over NATS.

NATS’s performance bonus paid by airlines is linked to how smoothly air traffic is managed. A failure a year ago that led to far wider flight disruptions cost the organization that is part-owned by airlines and the government around £7 million ($10.91 million).

Air travel in the U.K. was hit when a critical system at the Swanwick center in charge of the busiest portion of the U.K.’s airspace failed. NATS had to limit the number of flights in the region, including the congested London area, as air-traffic controllers processed far fewer flights than normal.

NATS CEO Richard Deakin told legislators the incident was “unfortunate” and that the cause of the disruptions last week wouldn’t recur.

He wouldn’t rule out future disruptions, though, as other elements of the complex air traffic system could encounter problems. “These systems do fail occasionally,” Mr. Deakin said, adding that NATS strove to maintain full service.

The outside probe will assess whether lessons from an extensive probe of the year-earlier failure were implemented and effective. NATS investment plans also will be scrutinized, Mr. Haines said. The service provider said it would wait for the outcome of the review before adjusting plans.

Separately, the CAA is drafting a proposal to gain more authority over NATS in part because of a similar outage a year ago. Proposed legislation is due to be submitted to the government early next year, Mr. Haines said.

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