National Air Traffic Services (NATS) was owned by the Civil Aviation Authority and operated air traffic control in Britain. In 1997 it estimated that it needed an annual £100m capital investment to increase air control capacity. The government decided that privatisation via a PPP was the best option and NATS was privatised in July 2001. The Airline Group, a consortium of seven UK based airlines (BA, Airtours, British Midland, Britannia, Easyjet, Monarch and Virgin) obtained a 46% share in NATS for A$2,000m (£800m) (NAO, 2002). National Audit Office (2002) The Public Private Partnership for the National Air Traffic Services Ltd, HC 1096, Session 2001-02, July 2002, London.
However, the airline industry suffered a downtown after September 11th 2001 which forced a refinancing of NATS in 2003 – basically the company’s financial position was not strong enough to continue with capital investment and the airline group was unwilling or unable to invest additional funds. The four banks which funded the airline group did not want to change the structure of the PPP. After refinancing BAA plc, the owner of major airports and itself privatised in 1987, became a new investor with A$12.5m (£5m) of share capital and a A$150m (£60m) loan to NATS. The government also invested the same amount. The original PPP and refinancing deal cost A$187.5m (£75m) in advisers fees (NAO, 2004). National Audit Office (2004) Refinancing of the Public Private Partnership for National Air Traffic Services, HC 157, Session 2003-04, January, London.
BAA plc was acquired by the Spanish construction group Ferrovial in June 2006, the same company that acquired Amey plc in its financial crisis in 2002/03.