Nats funding emphasises cost control over investment

The Civil Aviation Authority has announced it will review Nats' licence following the failure of air traffic control on Friday

The Civil Aviation Authority has announced it will review the UK's national air traffic service's (Nats) licence following the failure of air traffic control on Friday.

The latest downtime, which caused disruptions of UK flights on Friday 12 December, has led to an independent enquiry on the air traffic control system's resilience.

The failure at Nats occurred a year after a ground communications failure brought major disruption to UK flights.

Following the failure on 7 December 2013, NATS looked at how it would achieve 100% resiliency.

The CAA said: "We have asked NATS for an urgent report into the causes and handling of last Friday’s incident and will be factoring this, and our findings, into a review of Nats licence which has already commenced."

Following the downtime, Nats CEO Richard Deakin said: "The air traffic control systems used by Nats are robust and have contingency built in to them so that if a problem occurs, it can be identified quickly and resolved. Our contingency plans worked as they should have done on Friday 12 December and allowed our complex systems to be fully back up and running after 45 minutes."

Unique transition error

In a statement issued on 13 December, Nats said the problem was a result of a transition from standby to live on the Swanwick controller workstations that provide a number of tools and services to air traffic controllers failed.  

In normal operations the number of workstations in use versus in standby fluctuates with the demands of the traffic being controlled. Nats said: "In this instance a transition between the two states caused a failure in the system which has not been seen before. The failure meant the controllers were unable to access all of the data regarding individual flight plans which significantly increases their workload."

Worryingly, Nats described the failure as unique, which suggested it had not tested the particular scenario that led to Friday's failure. "Following the issue on Friday, the root cause was identified, a correction put in place and we do not expect that failure to repeat," Deakin said.

As a result of the failure on Friday, the CAA will, in consultation with Nats, review the resilience if the air traffic control system.

A panel of experts is expected to examine the root causes of the incident on Friday and look at Nats’ handling of the incident.

Significantly, the panel will examine whether the lessons identified in the review of the disruption in December 2013 have been fully embedded and were effective in this most recent incident.

The panel will also review the levels of resilience and service that should be expected across the air traffic network and will look at measures that could be put in place to reduce the impact of any unavoidable disruption.

Nats said its backup plans and procedures worked on Friday exactly as they were designed to and the Nats system was back up and running 45 minutes after the event failure.

The cost of resiliency

Speaking on the Andrew Marr show, business secretary Vince Cable said that, due to financial pressure, Nats decided to "forego capital investment" for many years.

This year Nats' annual statement showed the organisation incurred a charge of £41m for voluntary redundancies. The CAA wants Nats to reduce costs, but this is at odds with increasing resilience.

The regulated part of Nats, called Nerl, can earn 6.8% per year. But, according to the annual statement, one of the ways it can earn additional returns is if it outperforms the CAA’s assumptions by becoming even more cost effective.

In the annual report, Deakin said Nats submitted a revised plan to the CAA, but the air regulator proposed even further price reductions, "making this a very challenging settlement".

Clearly there is a cost incurred to improve uptime. The CAA's review will include an assessment of whether NATS is sufficiently incentivised to deliver the excellent levels of air traffic service that UK passengers have come to expect

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