Prospect response to CMA provisional findings

In regard to the NERL RP3 Business plan and performance targets, Prospect has submitted a formal responseresponded to the provisional findings of the CMA.

Whilst some of the findings such as on cost-of-capital will have an enduring validity, much of the business plan is now irrelevant and we believe that the process should conclude without delay with a further process opened up to develop a revised business plan for the latter part of RP3 once the landscape in terms of draft demand etc. post Covid-19 is better understood.

Prospect ATSS Branch Member Update (Pay) – 03-Apr-2020

Dear member,

I want to update you on the latest developments in regard to NATS’ current financial situation caused by the COVID-19 pandemic.

You are aware of the serious effect this continues to have on the aviation industry as well as the broader economy. Over recent days, we have been working with the NATS senior team to understand the social and economic impact COVID-19 is having on the company and to explore measures that could be taken to keep NATS going.

Cash Conservation

As you will have seen on the NATS hub, the company is seeking to conserve cash (to maintain company liquidity) through the next few months until traffic (and therefore revenue) begins to trend towards some form of normality. You will have received an email from Martin Rolfe on the 18th March which states a number of measures being undertaken to restrict cash expenditure in the drive to maintain liquidity.

We have been in consultation with NATS with respect to measures that could be implemented from an employee (payroll) perspective to contribute toward this objective.

Having considered some ideas we (together with Prospect ATCOs Branch and PCS) have reached a conclusion regarding the “fairest” way that the whole workforce can contribute to the conservation of cash in the short term. We have now reached an agreement with NATS on this cash saving measure and this is set out in the following two parts:

Firstly – the pay award of 2.3% as implemented with effect from 1st Jan 2020 will be reversed. This means that from April 2020, all pay scales will revert back to the levels they were at prior to the start of 2020. There will however be no ‘clawback’ of the payments already made covering the period of January to March. This applies to all employees who benefitted from the 2020 Negotiated Grades Pay Award.

Secondly – in line with measures already announced for the Personal Contract Grades (PCG) and other company bonuses, the bonus elements for those ATCE, STAR and ATCO grade staff that attract them will be deferred.

The combination of the two items above, along with the reduction in overtime will result in an estimated total saving in excess of £10m taken over a 12-month period.

The intention is that there will not be a detriment or erosion to earnings in the long term but a contribution in the short-term to reduce cash expenditure.

It is clearly impossible to predict with any certainty what the traffic levels and NATS revenue will be in the months ahead. Therefore 6-months after the implementation of the agreement there will be a joint review to consider whether (and when) the NATS financial situation will support the reinstatement of the 2020 pay award and/or the deferred bonus payment.

The ATSS Branch Executive has taken this collective decision as an elected body representing you our members. Whilst a ballot would have been desirable to seek your views on this course of action, there is simply not the time and it must be impressed upon members that this is a decision that has been taken in their best interests as to preserve NATS’ cash flow and the ongoing viability of the company in these uncertain times. To put this to a ballot could not have been conducted and implemented in time for April’s payroll.

Dear Colleague, we are in very uncertain times in a rapidly changing environment. Your Union has given careful consideration to implementing these measures as we look to protect all of our best interests. I thank you for your support.

A quick note on Furloughing

As you may be aware, the Government has announced a scheme, seeking to avoid job cuts, where staff are deemed to be on a on a leave of absence (‘furloughed’) for a period of time. We are actively discussing how this will operate within NATS, further details will follow in a further update to members.

Suresh Tewari

Branch President
Prospect ATSS Branch