NATS-Annual-Report-2015

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Annual Report and Accounts 2015 | NATS Holdings Limited Strategic Report 38 Review of service line performance (continued) network) and we achieved this. The flight efficiency metric is discussed in more detail under Corporate Responsibility. We aim to deliver short term tactical benefits to our customers from changes to procedures. This year we enabled fuel savings of 189,000 tonnes (2014: 21,000 tonnes) worth £94.5m to our customers (based on average fuel prices of £500 per tonne over the year). This is equivalent to 602,000 tonnes (2014: 66,000 tonnes) of CO 2 emissions. OPA performance targets for 2014/15 Target Stretch Actual Hotspot projects 4.0 n/a 7.0 Short term flow measures 95% 96% 98% (% < = 45 minutes duration) Enabled fuel savings (tonnes) Flight efficiency (small scale procedural changes) 10,000 15,000 46,000 Our customers also set us targets under our Operational Partnership Agreement (OPA) to achieve short term operational improvements, and we met these. NATS Airspace invested £152.3m (2014: £125.5m) on its air traffic control infrastructure in the year. Of most significance was progress with SESAR projects, including the next generation of flight data processing systems for deployment by the Prestwick centre in 2016 and projects accelerated at customer request such as TBS. We also invested in our communications network and in systems for the North Atlantic en route service in a joint project with NAV CANADA, the Canadian air traffic service provider, which improves safety and flight and fuel efficiency. NATS Airports 2015 2014 Financial performance: Revenue (£m) 190.2 183.6 Service line contribution (£m) 62.1 57.3 Capital expenditure (£m) 0.3 0.5 Operational performance: Airports served: UK (no.) 16* 15 Airports served: Overseas, incl. JV (no.) 10 10 Risk-bearing airprox (no.) nil nil ATC service delivery events (no.) 7 8 ATC asset non-availability (hours) 20 15 Average delay per flight (seconds) 0.2 0.1 *15 from 1 April 2015 following the transfer of Birmingham in-house. Airports revenue improved by 3.6% to £190.2m, largely due to contract price indexation. It also included the RAF’s Wattisham airfield for the first time and a contribution from Project Marshall. Revenue growth was also the principal reason for better service line contribution of £62.1m (2014: £57.3m) and this offset higher staff pay and budgeted pension costs. The FerroNATS joint venture now trades profitably and its financial performance also contributed to the improved result. At customer request we agreed ten-year contracts with Manchester Airport Group for both Manchester and Stansted airports, the third and fourth largest UK airports respectively, and extended the contract with Luton airport by two years to November 2017. We also established a strategic partnership agreement with Heathrow airport. Strategic Report
Annual Report and Accounts 2015 | NATS Holdings Limited Strategic Report 39 Review of service line performance (continued) We will also continue to provide a service to military facilities at Aberporth and The Ranges following the award of a seven year contract by Qinetiq. In April 2015 the Birmingham contract transferred back to the airport for in-house provision and in February 2016 Gatwick will transfer to the new provider. We continued to provide a safe service at airports with no risk-bearing airprox during the period. The average delay per flight attributable to NATS Airports in the period was 0.2 seconds. We also track events which impact service delivery, such as equipment failure and staff shortages. NATS Engineering 2015 2014 Financial performance: Revenue (£m) 18.6 15.6 Service line contribution (£m) 4.8 2.2 Capital expenditure (£m) 0.2 3.3 Significant milestones: Multi-static Surface Radar at Heathrow September Runway visual range equipment at Newcastle November Time Based Separation at Heathrow March Manchester Receiver Site March Revenues grew by £3.0m to £18.6m (2014: £15.6m) in the year due mainly to engineering support provided to the Aquila joint venture for its Project Marshall contract and from TBS at Heathrow airport. The improvement in the service line’s contribution by £2.6m to £4.8m (2014: £2.2m) also reflected income generated from the Aquila joint venture. Contracts awarded in the year, which will be delivered during 2016, include changes to the instrument landing system at Heathrow and a refresh of Electronic Flight Progress Strips (EFPS) at Luton airport. Revenue from Aquila will also become more significant as we upgrade systems at military airfields. Other NATS Service lines 2015 2014 Financial performance: Revenue (£m) 18.5 18.8 Service line contribution (£m) 4.3 4.8 Capital expenditure (£m) 0.7 0.4 Secured order value: UK contracts (£m) 40.5 43.5 Overseas contracts (£m) 5.8 13.1 Other NATS Service lines include Consulting, Defence and Information. Revenues at £18.5m were broadly in line with the previous year (2014: £18.8m) and service line contribution was £4.3m (2014: £4.8m). The major part of revenues is derived from the production of aeronautical data, services to windfarm developers and to help improve airport performance. We continued to support Heathrow airport with a capacity management tool which has improved its scheduling capability and airfield management, enabling it to declare a new early morning landing slot, and continued to work on delivering 4 UK airspace design contracts. This year we worked with Newcastle airport to deliver an innovative solution to low visibility runway operations. We also provided an upgraded radar system at Heathrow which enhances ground surveillance within the new Terminal 2 apron areas at the airport. We continued to support developers and energy suppliers in mitigating the impact of windfarms, which can generate false returns on radar. Strategic Report
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NATS-Annual-Report-2015

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