A group involving the Irish Aviation Authority (IAA) remains in the race to acquire a 46 per cent stake in Britain's national air traffic services (NATS) body after two consortiums were eliminated in the first round of the competition.
Known as the Airline Group, it is one of seven invited late last month by Britain's Department of Environment, Transport and the Regions to make formal bids in September, according to an informed source. Nine formal expressions of interest were received by the department in the first round. A department spokesman in London would say only that a "substantial" number of bids had been received, although he confirmed that groups had been invited to submit formal bids.
The process is likely to value the 46 per cent stake in NATS at £1 billion sterling (€1.66 billion) over 10 years. Its outcome will not be known until early next year.
As well as the State-owned IAA, the group's other members include eight British airlines - among them British Airways, British Midland and Virgin Atlantic - and telecoms group BT.
The department spokesman declined to name groups who expressed interest in the stake. Yet reports suggest that five leading international aerospace and defence groups submitted expressions of interest.
These were: BAe Systems of Britain; Thomson-CSF of France; and US groups Lockheed Martin, Boeing and Raytheon.
Submissions were also received from a British facilities management company, Serco, and from two financial groups, reports said.
The IAA would not take an equity stake in NATS if the bid by the Airline Group is successful. It would, however, take responsibility for the management of non-military air traffic control services in Britain. Technology services would be provided by BT.
The British state will retain a 49 per cent "golden share" in NATS when the sale is complete. Workers at NATS will take 5 per cent of the company and the remaining 46 per cent will go to the successful bidder.
The British government first proposed operating NATS as a public/private partnership just over a year ago. However, the plan has been opposed in parliament and by trade unions representing air traffic controllers and pilots.
For the IAA, the initiative signals its intention to remain active in any restructuring of the air traffic control business in the EU.
Observers believe that, if it does not move now to expand its business, the IAA might itself become a takeover target for a larger group when change comes. Britain is the first EU state to partly privatise its air traffic services, though Blair government hopes that NATS will take a leading role in a general shake-out of the business.
Such a shake-out is likely, particularly after comments last year by the president of the European Commission, Mr Romano Prodi. "Europe's airports are in a state of near-permanent chaos due to the ever-increasing volumes of traffic and the lack of co-ordination between air traffic controllers," he said. "The problem transcends national borders - we need to look for European-level solutions that actually work."
While some 49 groups currently control European airspace, one analysis suggests that this could be reduced to four or five major groups.
The Airline Group has said it will not seek a "commercial return" if its bid is successful.
Britain's civil aviation authority will continue to regulate safety after the change in ownership, scheduled for April 4th, 2001.
