Financial performance

NATS demonstrated strong financial performance for the year to 31 March 2012. Revenue increased by £88 million to £865 million, while pre-tax profits rose by £89 million to £195 million.

The exceptional increase in profit mainly arises from the price control review for 2011-2014 (CP3) which:

• reset the mainly cash-based revenue allowances of the economically regulated business to enable the company to meet higher pension contributions and to recover additional investment in air traffic control systems, and

• adopted new traffic forecasts thereby ending the sizeable under-recovery of revenue allowances in the previous year caused by the weak economic environment.

Contract renewals and growth in NATS’ commercial business also contributed.

Delivering performance targets to customers of regulated business

NATS’ core en route air traffic control service is economically regulated and incentivised to deliver specific performance targets that create economic value for its airline customers. In the year, these involved delivering:

• Safety and capacity: Safety is our first priority. NATS handled some 2.2 million flights (2011: 2.1 million) and for the fourth successive year achieved its target of no NATS attributable risk-bearing airprox, maintaining an already excellent safety record.

• Low levels of delay: NATS limited average delay per flight to 7.3 seconds – around one tenth of the European average – achieved while integrating major new technology.

• Saving fuel and CO₂: NATS provided improved flight profiles to customers enabling savings of 25,000 tonnes of fuel worth c £17 million, or the equivalent to 80,000 tonnes of CO₂.

During the year, NATS also delivered a number of major projects with minimal disruption to services. This included transitioning iFACTS, one of the most advanced controller decision support systems, into full operational service at Swanwick, requiring some 30,000 hours of training to 480 staff. The system brings improvements to both safety and capacity.

This performance, supported by proactive communications, resulted in our best-ever customer satisfaction score with 81.1% of respondents satisfied or highly satisfied with the company’s service.

A growing commercial and international business

Outside its economically regulated business, NATS provides a range of commercial air traffic and airport optimisation services. Through renewing existing domestic airport contracts and winning business in new markets in the year, the company secured forward orders worth £495 million in the UK and 20 other countries. These included:

• a new seven year contract with Heathrow Airport Holdings Limited to continue to provide air traffic control services to five airports (including Edinburgh, which has since been sold to GIP);
• a two year extension to the Gatwick airport contract;
• a five year contract awarded to its Spanish joint venture for air traffic control services to 10 airports;
• consultancy contracts in the USA, the Middle East and Asia-Pacific.

NATS’ expertise in information management, designing and managing complex airspace, and optimising runway capacity for customers, supports the world’s busiest single and dual runway airports at Gatwick and Heathrow and is now helping to win new business internationally in markets from the USA to India, and from the UAE to Singapore.