CAA Says NERL Should Not Charge GA

In a number of documents forwarded to PPL/IR, the CAA has rejected NERL initiatives to charge GA for the use of their services.  In  

NATS (En Route) plc price control review for control period 3
CAA Consultation
February 2010

They make the following arguments and statements:

4.47 There are a number of services provided by NERL, the costs of which either are, or are proposed to be, included in the en route cost base, that are used extensively by VFR traffic which is generally exempt from the payment of en route charges (see below). These include the Flight Information Service, Farnborough LARS, the Assisted Flight Plan Exchange Service (AFPEX), the emergency 121.5 frequency and fixing service and the London Special VFR service (primarily for helicopters). These services are mainly provided in order to ensure that the UK meets its international obligations under the Chicago Convention and consequently NERL is required to provide them under its licence. The costs of these services taken together are around £5- £6 million per annum.

4.48 Under long-standing Eurocontrol charging arrangements all aircraft under 2 metric tonnes are exempt from charging and, in addition, the UK has specifically exempted VFR traffic below 5.7 tonnes. These arrangements have been reflected in the more recent EC Charging Regulation which prevents the charging of aircraft under 2 tonnes and gives Member States discretion in relation to VFR flights. As a result, small aircraft currently pay no en route charges with those above the weight thresholds paying charges when they are operated for any non-exempt purpose28, including wholly business related flights. Of the total number of fixed wing aircraft on the UK register, around 80% (some 8,500 in number) are below 2 tonnes. However, in terms of UK service units, only 0.1% of the total generated in 2008 were accounted for by exempt civil aircraft of which 0.04% were weight-exempted aircraft. Around 1.4% of service units were exempt military aircraft operating under contractual arrangements between NERL and MoD.

4.49 Against this background, the CAA has considered whether, consistent with its statutory duties as well as the principles of better regulation, and in particular that of proportionality, there is a good case for disturbing the present arrangements by shifting some of the cost burden to small aircraft. The CAA sees both policy and practical difficulties in such a move.

4.50 As the ATS system is provided in the UK to ensure that all aircraft are able to fly safely, it is impossible (as well as undesirable) to stop anyone from benefiting from the service and the benefit derived by one user does not reduce the benefit available to others. However, as the design and extent of controlled airspace, and the various associated services supplied by NERL, are driven by the requirements of commercial operators for the safe passage of their aircraft (and the passengers carried in them), it is reasonable that they should meet the associated costs even when others may need to use those services. In economic terms, it could be argued that in order to operate safely the commercial airlines impose an externality cost on the generality of aviation and it is a well established economic principle that the entity causing the externality should bear its cost. If others derive benefit from using ATS services independent of the need to protect airspace used by commercial operators, this benefit is likely to of a much lower order of magnitude compared to the benefit of ensuring the safety of commercial aircraft using controlled airspace. Furthermore, the economic benefits from having controlled airspace itself are much higher for commercial aircraft than for General Aviation.

4.51 Even if the alternative view was taken that all aircraft operators should, in principle, be charged, a number of practical hurdles would need to be overcome. Clearly, the Eurocontrol charging arrangements could not be used given the legal constraints in the EC charging regulation on charging small aircraft. The regulation does, however, require Governments to reimburse their Air Navigation Service Providers for certain categories of exempt flight and HMG does so for civil IFR traffic and VFR flights where there is a flight plan. It would, therefore, be necessary to devise a scheme of charging, possibly unique to the UK, where charges were imposed directly on other exempt flights that reflected their use of services and facilities provided by NERL. In the CAA’s view, the small number of aircraft and movements that would be affected, the relatively low level of costs that could reasonably be recovered from them, and the difficulty of charging on the basis of the use made of NERL’s services (in order for consistency with the charging of commercial operators), in particular when there is no mandate to receive a service from NERL in some areas of airspace, all militate against the development of a separate charging scheme.

4.52 Charging options have been considered, and rejected, in the past. For example, in 2002 a number of options were assessed for the recovery of the costs of the Lower Airspace Radar Service (LARS) of which General Aviation was a major user. Funding options then considered included: hypothecation of fuel duty; charging at the point of use; an airport charge; an annual charge; an aircraft registration charge; and a pilot licence charge. Each of these options was found to have practical and other disadvantages and none appeared to offer an effective solution29. On present evidence, the CAA can see no good reason for taking a different view.