£130m rescue for air traffic control

THE company that runs Britain's beleaguered air traffic control system is to get a fresh handout of £130m. Transport Secretary Alistair Darling has backed the rescue package amid fears about a growing financial crisis besetting the National Air Traffic Services (Nats).

The bailout is the latest controversy to hit Labour's decision to part privatise the service last year. The deal, which involves a £ 65m payout from the taxpayer matched by private cash, comes just four months after the Government handed Nats £30m to help it cope with the slump in air travel after the 11 September atrocities.

Despite the new money, the boss of the company admitted that glitches in a new computer system could cause more delays for holidaymakers over the summer. A series of computer failures caused travel chaos for thousands of air passengers earlier this year.

Details of the payout were confirmed on Tuesday by transport minister David Jamieson and Nats chief executive Richard Everitt when they appeared before MPs. Everitt told the transport select committee he was finalising a deal which would see the British Airports Authority give Nats up to £65m - but only on the condition the Government hands over a similar amount. Jamieson confirmed the Government was ready to 'match the appropriate private sector contribution'.

The importance of the payout was stressed by Everitt, who said the service had seen its income plummet by 17% since September. Asked what would happen if the British Airports Authority - which owns the UK's main airports - did not invest any cash, he said: 'I do not think Nats can make up the shortfall.'

The chairman of the Civil Aviation Authority, Sir Roy McNulty, underlined Mr Everitt's fears, saying the service could face catastrophe if a deal was not agreed. 'If we do not collectively come up with a solution, it could put Nats into administration,' McNulty told the committee.

Earlier, Everitt had told MPs that Nats would not pay compensation to holidaymakers whose travelling plans have been disrupted by a series of glitches in the service's new computer system. And he warned there could be more delays ahead.

'We will do everything we possibly can to ensure the risks of further problems are very low - but we are in a learning phase and it will take some months to completely understand the issues,' he admitted.

Everitt was also quizzed about reports that air traffic controllers have been confused by the lettering on computer screens at the service's new Swanwick control centre, repeatedly misreading the destinations and altitudes of planes. He said work had started to tackle the difficulties but he told MPs the issue would not be resolved until November at the earliest.