German Air Traffic Agency Seeks Stake in U.K. Counterpart

Deutsche Flugsicherung GmbH, Germany’s air-traffic control agency, is pursuing a stake in its U.K. counterpart with a target of cooperating on reducing costs while consolidating handling of aviation routes.

DFS is awaiting results of a first phase of bidding on a venture that owns 42 percent of National Air Traffic Services Ltd., Chief Executive Officer Klaus-Dieter Scheurle said today at a press conference in the Frankfurt suburb of Langen. Combining DFS and NATS operations would enable more efficient control of in excess of 80 percent of trans-Atlantic air routes serving Europe, he said.

“Now we are keen to get access to more detailed data and participate in the second round,” Scheurle said.

The venture, known as Airline Group, is currently owned by seven partners, including U.K. carriers British Airways (IAG), EasyJet Plc (EZJ) and Virgin Atlantic Ltd., the airline of tour operator Thomas Cook Group Plc (TCG) and German carrier Deutsche Lufthansa AG. Rothschild & Cie. investment bank is handling Airline Group’s disposal, Scheurle said.

The biggest owner of Fareham, England-based NATS is the U.K. government, with a 49 percent stake plus a golden share giving veto rights over corporate decisions. Employees hold 5 percent and Heathrow Airport Holdings Ltd., operator of London’s busiest airport, owns 4 percent. NATS declined to comment today on Scheurle’s remarks. A message seeking comment at Hering Schuppener, the public relations company working for Rothschild in Frankfurt, wasn’t immediately answered.

EU Policy

Three dozen entities guide planes through skies in Europe, a figure that market regulators wants to reduce.

Air-traffic charges in Europe are about double the rate in the similarly sized U.S. airspace, and network inefficiencies add 42 kilometers (26 miles) to the average flight distance and increase costs by almost 5 billion euros ($6.5 billion) a year, the Brussels-based European Commission, the European Union’s regulatory arm, said in a May 3 announcement of new rules intended to push consolidation of air-traffic operators.

Press reports about the value of NATS have been exaggerated, Scheurle said in an interview. The London-based Sunday Times reported in January that 3i Group Plc (III) plans to buy a 12 percent stake in NATS valued at 120 million pounds ($184 million) from travel companies TUI and Thomas Cook.

“We won’t overpay,” Scheurle said, declining to comment on any price offered for a NATS holding. “But in the end, this is a political process” for determining who will buy a stake, as “it means influence over a country’s territory.”

To contact the reporter on this story: Richard Weiss in Frankfurt at rweiss5@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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