Group Director’s Office
Martin Rolfe
Managing Director, Operations
NATS
4000 Parkway
Whitely
Fareham
Hampshire PO15 7FL
12 August 2014
Dear Martin,
Air Traffic Control Disruption on 7th December 2013
Thank you for your comprehensive (July 2014) report into the Swanwick technical failure of
7th December 2013, which was recently published on your public website (report,
appendices). The CAA has now undertaken a detailed review of this report and your earlier
technical reports, as well as conducting our own interviews with airlines, airports and
representative bodies. In this letter, I have set out our response to this collective weight of
evidence and set out the way forward for both NATS and CAA.
Background to the incident
In the interest of enabling this letter to be read self-standing, I begin by summarising the
background to the incident and the immediate financial implications, for those who are less
familiar with the incident and response.
On the night of 6/7 December 2013 there was a failure of the Technical Monitoring and
Control System (TMCS) servers that configure the Voice Communications System (VCS) at
Swanwick. This resulted in NATS being unable to re-configure the Area Control
Operations Room from its 5 night-time sectors to the normal daytime configuration of 15-20
sectors.
This failure had a particularly disruptive effect on airlines and passengers. Some 300
flights were cancelled and almost 1,500 were delayed which we have calculated could have
affected some 240,000 passengers. Total delay amounted to 126,000 minutes which is
almost twice the scale of delays arising from any previously recorded failure of a NATS
system since PPP in 2001. The CAA is however satisfied that there were no safety issues
associated with NATS’ handling of the incident.
Financial implications for NATS
There have been financial consequences of the disruption for NATS as a company and for
its executives. Under the delay term in the licence held by NATS (En Route) plc, NATS
will forgo revenue of some £7.4 million with £0.97 million due to be repaid to airlines
through a rebate in the en route rate in 2015. Furthermore, the incident triggered two
measures in relation to personal remuneration packages which mean that the executive
team have forgone 12% of the annual performance incentive plan value. Such financial
incentives should ensure that management attention is focussed on the delivery to users
(and ultimately passengers) of the level of service that they need and for which they pay.
Civil Aviation Authority
K4 CAA House 45-59 Kingsway London WC2B 6TE www.caa.co.uk
Telephone 020 7453 6200
[email protected]
There is no penalty for cancelled flights, only for those subject to NATS related delay.
Some stakeholders have expressed concern that the current arrangements may operate
perversely insofar as they could give NATS an incentive to cease service altogether rather
than seek innovative solutions when a problem arises. We have, however, seen no
evidence that this occurred on 7 December. NATS appears to have identified some
workarounds, although not all of these were acceptable to those airlines who made the
commercial decision to cancel some flights instead.
NATS is protected from liability to its customers for the impacts of service interruptions.
This is a statutory provision (found in section 10 of the Transport Act 2000) and the CAA
cannot alter this.
The response by NATS
Given the scale of the disruption, NATS launched immediate investigations into the causes
of the system failure and its consequences. These included:


A Technical report - an internal investigation into the engineering, operational,
communications and contingency aspects of the event and into NATS’ resilience in
general including reviewing lessons learned and mitigation measures to prevent a
repeat of the incident; and
An Independent expert investigation - at the request of the NATS Board, a review by
the Technical Review Committee (TRC) headed by a non-executive director and
supported by an independent risk expert of the key issues and decision-making to
provide assurance to the Board that NATS had fully addressed the underlying
issues revealed by the events.
NATS kept in close touch with the CAA during its investigations and the CAA identified a
number of particular matters it wanted NATS to address. NATS delivered its final single
comprehensive report to the CAA on 7 July 2014 which consolidated all of the evidence
and findings from its various reports and research into a single report. At the CAA’s
request this report was published in full on NATS’ public website on 1 August.
We have supplemented the evidence from these reports with our own interviews with senior
operational managers from airlines, airports and industry bodies and with the Eurocontrol
Network Manager.
From a purely technical perspective the comprehensive report (along with the TRC report
and the initial investigation report) demonstrates to the CAA’s satisfaction that NATS
thoroughly investigated the event to establish, as far as practicable, the cause of the initial
failure and the subsequent problems with restoring the system. NATS responded rapidly
to establish a number of additional technical and operational mitigations to reduce the
impact of any future failure while it continued with its plans, which were already in place, to
replace TMCS. The independent expert investigation into the failure found that NATS’
response had overall been sound although some lessons had been learnt. The expert
also concluded that it was unreasonable to expect NATS to have predicted this failure and
the complications with restoring the system and hence the significant impact upon service
delivery.
Recommendations by NATS
The NATS compresensive report identifies a number of measures that NATS has already
put in place, are in the process of being implemented or are planned for the future to
improve NATS’ service delivery. The areas that have been identified by NATS where
improvements can be made include:
Continued (2 of 5 pages)




enhancing the existing escalation processes and identifying fall back methods of
operation;
longer-term proposals to enable other operations rooms in NATS’ centres to control
traffic in adjacent airspace;
reviewing with customers and the CAA the industry’s ability to respond, identifying
required changes to NATS’ crisis management capabilities, resilience of systems
and procedures, and service continuity plans; and
communicating better with customers, stakeholders and the wider world during a
crisis by increasing the speed of response, increasing use of social media, and
engaging more with stakeholders.
NATS’ view is that its current investment plans provide the best balance of cost versus risk
and that the correct approach is to develop a systematic and pre-planned industry response
to minimise the effect of service disruption. In the longer-term NATS’ capital investment
plan includes new technologies to further enhance technical resilience.
The report describes specific measures that NATS is planning to implement, including:






a review of NATS crisis management and resilience including a review of current
resilience and contingency capabilities and a cross-industry review of the wider
industry response;
new cross-NATS crisis management exercises and scenario training;
an industry crisis exercise to establish the capability of the UK air transport industry
to maximise total network capacity when faced with significant disruption;
the Operational Resilience Enhancement Plans for the Swanwick and Prestwick
centres to progress options for enhancing service resilience and performance during
contingency operations;
a new ‘Asset Sustainment Board’ chaired by the NATS Engineering General
Manager to provide additional assurance that the overall engineering risk is
tolerable; and
improved communication with stakeholders, including passengers, during a crisis.
CAA findings
The CAA considers that the NATS comprehensive report provides a detailed assessment of
the causes and impact of the system failure, NATS’ subsequent investigation process, the
adequacy of NATS’ response to the incident and the adequacy of its contingency and
resilience plans. It acknowledges where failings occurred and summarises the way
forward in Chapter 7.
The Chapter 7 themes on avoiding a recurrence of the incident are a good first step but
lack detail and clarity. The CAA would expect NATS to now draw up and publish project
plans for each of these measures to include accountabilities, deliverables, milestones and
timescales. The CAA would plan to monitor NATS’ subsequent progress on each of these
on a quarterly basis.
In addition to providing further detail on next steps, from our own interviews with
stakeholders the CAA would encourage NATS to:
i)
invoke the ATICCC procedures (or otherwise alert airlines and airports) as soon as
it has any indication of the potential for service disruption that is likely to have a
major impact on the first wave of airline operations in the morning. The CAA notes
that on 7 December ATICCC was not activated until several hours after the failure
first occurred.
ii) ensure that all airlines likely to be affected by service disruption are alerted at an
early stage.
Continued (3 of 5 pages)
iii) make best use of all the means by which a crisis can be handled from an
operational standpoint, for example by exploring the more effective use of and
interactions with the Eurocontrol Network Manager.
iv) put in place a comprehensive communications strategy that recognises the
legitimate interests of the various parties affected by disruptions.
Implications for the wider regulatory framework for NATS
This incident has served to expose a number of potential deficiencies in the current
regulatory framework for NATS. These include:



the ability to determine whether a breach of NERL’s service obligations in its air
traffic services licence or in the Transport Act 2000 has occurred;
the timing of a breach that the CAA has powers to investigate; and
the range of enforcement tools available to the CAA.
The CAA has therefore instigated a review of the specification of NERL’s service
obligations, including resilience and continuity arrangements, in Condition 2 of NERL’s
licence. The work on which the CAA is currently engaged in the operational resilience of
Heathrow and Gatwick airports in the context of their relatively recent operating licences
may offer some useful pointers here.
At the same time, the CAA will review NERL’s reporting requirements in the licence for
documents, such as the annual Service and Investment Plan (SIP), and the appropriate
degree of CAA oversight of them.
The CAA will review the enforcement mechanisms in the Transport Act 2000 and whether
these remain fit for purpose, for example in comparison with other regulatory regimes such
as for airports.
There are several references in the NATS report to the involvement of the NATS Board.
We presume this is a reference to the board of NATS Holdings rather than of the licensed
entity NERL. As the licence and statutory service obligations rest principally with NERL,
the CAA will be pursuing the recommendations on governance in Chapter 5 of the report on
the ad hoc review of NATS related risk published by the CAA in January 2013. At the
same time we will also be taking forward the recommendations on the financial ring-fencing
of NERL in the same chapter as both issues are directed towards the CAA’s objective of
ensuring that NERL maintains sufficient financial and non-financial resources and avoids
exposing en route airspace users to unacceptable risks from NATS’ activities outside the
regulated business. We will be writing to you separately about this project, in which we
have engaged Reed Smith to assist us.
Each of the reviews will be conducted over the next three months or so and they could lead
to proposals by the CAA to modify NERL’s licence and/or recommendations to the
Government for legislative changes.
I would be happy to deal with any questions you may have on this letter which, as I have
previously indicated to you, we are publishing on the CAA’s website.
Yours sincerely,
Iain Osborne
Continued (4 of 5 pages)
Continued (5 of 5 pages)