Middle Eastern expansion and the future of the FAA

NATS experienced a difficult end to 2013 following the technical problem at Swanwick that saw a loss of 10% in airspace capacity for a few hours. But, with the start of a new year comes the chance to refocus on moving forward with the positive agenda that we’ve been able to pursue over recent years.

This year in particular I am hoping to see progress in our services business. There is a greater understanding than ever before of the value air traffic management can bring to airport and airline operators and I have a real sense of optimism about what this year could hold. My trip to China with the Prime Minister in December laid down some good markers for future cooperation in that vast market and we also made some excellent progress with our colleagues in Indonesia before Christmas, who have major challenges with airspace capacity and operations as their economy expands.

The growth of air traffic in the Middle East region brings both challenges and opportunities.

Over the course of 2014, we expect to be able to open our first permanent offices in the Middle East and the Far East, something that I think demonstrates our commitment to both regions and strength of the relationships that we’ve been able to build with the aviation communities there.

In the Middle East in particular we’ve been extremely busy working with the authorities to help them make the most of the fantastic ground infrastructure that is now in place. There has been a growing realisation in recent years that any airport, no matter how big, can only ever be as efficient as the airspace that serves it. The simple truth is that airport and airline investors don’t want to see their assets being underutilised because of a lack of capacity in the air. Those investors, as well as other stakeholders, are now increasingly pushing for cross-border coordination and cooperation, something that I expect to continue to be a hot topic over the course of this year and something that I believe NATS can help facilitate.

More widely within our industry, the future shape of the FAA in the United States continues to be a hugely contested issue. The recent Hudson Institute report, written by Robert W. Poole, Jr, the director of transportation policy at the Reason Foundation, illustrates the enormous technological, financial and organisational challenges that need to be urgently addressed by Congress.

Poole cites Australia, Canada, Germany, the UK, and New Zealand as examples of countries where ATM provision has been freed from the kind of budgetary and governance constraints that currently handicap the FAA. It seems that those people like Poole who are encouraging a move to a cost recovery or reasonable return model within a liberalised market are winning the argument at present, to the extent that even the unions have dropped their opposition to discussing change.

It would be easy for me to say the NATS model is the one to emulate, but it is one of a number of viable alternatives that would give the FAA the freedom to do the work that everyone knows is needed, while at the same time relieving some of the federal government’s budgetary problems. Progress in our industry is notoriously slow at times, but I would not be surprised if Congress began making some tentative steps towards a form of corporatisation of the FAA this year.

I’m sure all these topics and many more will be on people’s lips in March for the CANSO World ATM Congress in Madrid. NATS will be there once again and I’m looking forward to contributing to the discussions.