The first thing you notice is how light it is. Air traffic control rooms, on
television and in films at least, are dark, claustrophobic places where
groups of mainly men huddle around neon-lit screens.
The two main control rooms at the Nats complex just outside Southampton, which
house 800 air traffic controllers of both sexes, are huge, light and airy,
with high, arched white ceilings. With their banks of screens arranged in
curves and horseshoes, they resemble nothing more than a City dealing floor,
only quiet and calm. The original control rooms were dark because the
primitive radar screens were hard to see in full light, hence the
stereotype.
The Nats facility was opened in 2002 with the latest technology, which is
continually being updated.
The second thing you notice is the brightly coloured child's stuffed toy, a
Fimble, apparently, hanging on a string from the ceiling. It is there
because its blue and yellow striped clothing exactly matches the new Nats
logo, introduced in 2006 as part of a corporate rebranding that ditched the
organisation's old name, National Air Traffic Services.
The man largely responsible for that corporate makeover and the past five
financial years of profit from the former lossmaker is Paul Barron, chief
executive since 2004.
He inherited a corporate culture still run on Civil Service lines and debt of
almost £730 million, which saw the group, based on the then accounting
standards, with gearing of well over 100 per cent. Debt is now less than
£540 million, at the last financial year-end, and gearing below 60 per cent.
“I was brought in here to transform the business,” he says. “The average
intellect of the workforce was greater than anywhere I'd worked before —
which is good and bad. It's good that they are really bright people, but
they test everything.”
Mr Barron left school in his native Lincoln in 1967 aged 16 to sign on as an
apprentice at Ruston and Hornby, a local engineer. “There weren't many
options if you lived in Lincoln,” he says. “Very few people in my school
went to university because nobody could afford it. You looked to try and get
an apprenticeship.”
A talent for management appeared early on. By 24 his days of metal-bashing
were over and he was in a supervisory role. He was already a union
representative.
“From a very young age I had management capability. The kids in the street
looked at me for where we were going or what we were doing that night.
Engineering or manufacturing is my background, but my skill is management. I
can read people very well, hence the poker.” He is a keen player. “When I'm
in a group of people I can quickly see where the tensions are and what the
issues are. I can see how to get disparate people to work together.”
He rose to become managing director at Ruston's successor company, then part
of Lord Weinstock's GEC combine. “The day I first sat in that chair was a
fabulous day.” He was headhunted by Chris Gibson-Smith, then the Nats
chairman, who now chairs the London Stock Exchange.
Mr Barron reels off the various issues he has faced and still faces at Nats.
The company has just negotiated with the unions the closure of the
final-salary scheme to new entrants, in favour of a money purchase scheme.
The project management side, which he terms “projecting capability”, has
been transformed. The Southampton facility came in late and over budget. By
comparison, a new site at Prestwick, near Glasgow, is due to open in January
next year on time and to budget. The West Drayton facility, which handled
the last stages of flights into London airports, was closed and operations
moved seamlessly across to Southampton in 2007. “We can deliver projects as
well as Brown & Root or Bechtel,” he says. “This company is world class.
It wasn't. We built that.”
Nats has, therefore, been approached to handle big transport infrastructure
work overseas on a contract basis. While this will never be a significant
income stream, “it might soak up the current downturn”.
He points to an audiovisual display on the wall. It looks like someone has
kicked over an ant-hill. Each of those tiny specks on the screen represents
aircraft moving across the UK, speeded up to allow about ten seconds to
represent an hour. There are 6,500 to 7,000 commercial aircraft in the air
on any given day and they have to be manoeuvred around smaller civil craft
and military flights. No wonder Southampton is the biggest air traffic
control centre in Europe.
Nats handled just short of 2.5 million flights in the last financial year,
carrying 220 million passengers. But the economic downturn has seen an
inevitable fall-off, as families take fewer holidays and businessmen travel
less. The current quarter, to the end of March, is expected to show a
year-on-year fall of 10 per cent. “We're a barometer of the economy,” he
says. “We've seen some flattening [in the rate of decline] over the past
month. We hope it's a good sign, but we don't know.”
This does not necessarily make the air traffic controllers' jobs any easier.
The fall-off has been during the day and overnight. Flights first thing in
the morning and in late afternoon to long-distance destinations are
little-changed. But declining revenues, expected at £20 million
year-on-year, mean cuts must be made. Nats is seeking voluntary redundancies
among engineering, scientific and support staff from its workforce of 5,000.
“I believe over the next couple of years we will probably take £45 million
out of the costs of the business,” he says.
In addition, there is pressure to raise returns to shareholders. Under a
public-private partnership put in place in 2001, Nats is 42 per cent-owned
by seven airlines, including BA, 4 per cent-owned by BAA, the airport
operator, and 5 per cent by its staff. The remaining 49 per cent is with the
Government, which exercises effective control. Although the airlines, who as
the main customers initially put in £65million, have received only a 1 per
cent return on their investment so far, “they would like to see dividends in
future”. Mr Barron pauses. “We never compromise on safety. If you were to
write anything, write that.”
I query whether, as a utility and a monopoly, Nats should be in the business
of turning a profit. “You sound like one of my controllers,” he laughs. “Our
customers can't take that approach, and why should they? In this day and
age, you can't be a monopoly that isn't being properly regulated.”
Regulation is the responsibility of the Civil Aviation Authority and Nats is
gearing up for negotiations to cover the finances for the five years from
2012. “We can't just charge what we want to. People have invested in this
business and they want to see a return on their investment.”
Other issues include the ever-present prospect that the Government may opt for
full privatisation and sell its stake. “They aren't talking about it today.”
Mr Barron meets Geoff Hoon, the Transport Secretary, every three months, at
least. “I asked Geoff. His comment was, no, they don't have any plans to
sell at this time. You've got to find someone to buy it. Would you now get
the best price for it?”
Nats recently lost at a tribunal a high-profile case brought by a would-be
employee aged 50 who was turned down because of his age. It is deciding
whether to appeal. The company argued that not only was it difficult to
learn the job at that age, but also that the training, which takes three
years and costs £750,000 per controller, would not be cost-effective because
of the short period before such candidates could retire at 65.
Controllers are retested every year and any lacking the necessary skills are
weeded out and redeployed elsewhere. It is unlikely that anyone aged 50 and
over could qualify; of every 100 who attempt to gain the license, 97 fall
out on the way.
“We've had work done which told us that with age, your reflexes and some of
the skills you need as a controller do fall away,” he says, “but that
breaches the age discrimination laws, and we have to deal with that.”
The European Commission has been pushing for a so-called Single European Sky
and a reduction in the existing 42 air traffic control systems. “That was
the idea,” he says. “I don't think that's ever going to happen. Governments
aren't going to let go of sovereignty.”
One final point. Though the Government is committed to increasing the number
of apprenticeships available, such positions are few and far between. Could
someone coming into the workplace today replicate Mr Barron's trajectory
from the lowest rung on shop floor to the boardroom?
“It would be difficult. But I guess it was difficult then. I never imagined I
would make it to be an MD, because I didn't know what an MD did.”
CV
Born February 21, 1951, Lincoln
Career: September 1967 engineering apprentice, Ruston and Hornsby;
December 1974 production supervisor, Ruston Gas Turbines; June 1985
commercial director, Ruston Gas Turbines;
April 1988 director, Ruston Gas Turbines;
April 1989 managing director, Alstom Gas Turbines;
August 2000 - June 2004 president, Alstom UK; June 2004 - present chief
executive, National Air Traffic Services, now Nats
Family Married with four children
Q&A
Who, or what, is your mentor?
I have been fortunate to have had a few mentors. My MD in Lincoln, Kelvin
Bray, gave me my break and taught me about delivering results. He was a real
taskmaster, but he spotted my potential and over 12 years kept on taking the
next risk with me, until I took over from him. My former chairman at Nats,
Chris Gibson-Smith, gave me space to experiment and my current chairman,
John Devaney, is providing wise counsel during testing times
Does money motivate you?
My most important motivator is being recognised for doing a good job. Money is
a great compensation for hard work and long hours and, yes, it is satisfying
to have achieved my earning level from where I started as an apprentice
earning £5 a week
What was the most important event in your working life?
The day I became the managing director, aged 37, of the company I joined as an
apprentice at the age of 16
Which person do you most admire?
My Dad. At the age of 70 and for the next ten years he was the full-time carer
for my seriously disabled mother and never complained once
What gadget must you have?
My BlackBerry. Having my phone, e-mails, diary and contacts in one device is
invaluable
What does leadership mean to you?
Inspiring a strong and challenging team to continually deliver outstanding
results. I always ensure my immediate team is a set of strong individuals
who are by their nature challenging; my job is to ... ensure that
collectively we understand and deliver what the business needs to be
successful
How do you relax?
Being the non-competitive person I am - tennis, five-a-side football and
poker! I play in a Nats league five-a-side team (which won the trophy this
year!) and play tennis regularly with my family- who all play well so keep
me on my toes. We have an apartment in Spain, which is an important bolthole
