Consultation outcome

UK airspace design service: modifications to NERL licence terms – government response

Updated 17 November 2025

This is a notice of modifications to be made to the terms of the air traffic services licence held by NATS (En Route) plc (NERL). This will support the implementation of the government’s decision to establish a UK airspace design service (UKADS), to be provided by NERL.

Introduction

This is a formal notice under section 11A(5) of the Transport Act 2000 (the Act) of the Secretary of State’s decision to modify the licence terms granted to NERL, dated 28 March 2001 (the licence). This follows the publication of a notice of the proposed modifications on 4 September 2025, with representations invited up to 1 October 2025 and then considered, as per the process set out in section 11A of the act.

These modifications to the licence terms are made under the power granted to the Secretary of State in section 11(3)(b) of the act to modify prescribed terms in a licence for air traffic services granted under section 6 of the act. They will authorise NERL to make or develop with a view to making (to the UK Civil Aviation Authority (CAA)) an airspace change proposal in the London, Scottish and Shanwick Oceanic Flight Information Regions. In effect, these modifications will authorise NERL to provide airspace design services in respect of UK airspace.

Modifications to the conditions of the licence will be subject to separate notice under section 11A of the act, given by the CAA, under the power in section 11(1) of the act. Subject to consultation, this will set out what NERL is required to do as the UKADS provider ^{[footnote 1]} and enable it to recoup relevant costs.

Policy background

The Department for Transport (DfT) and the CAA have a shared vision for the modernisation of UK airspace, as set out in the airspace modernisation strategy (AMS), which is a coordinated strategy for the use of all UK airspace for air navigation up to 2040.

Under the Civil Aviation Authority (Air Navigation) Directions 2023, the Secretary of State has given the CAA the function to maintain and keep under review the AMS.

The AMS aims to enable quicker, quieter and cleaner journeys and greater capacity for the benefit of those who use and are affected by UK airspace.

Modernised, efficient airspace design is an essential component of the AMS. The basic design of much of UK airspace has not changed significantly for decades, despite technological advances and a tenfold increase in demand from airspace users.

At present, no single organisation in the UK is responsible for airspace design. Airspace design is sponsored and carried out by individual airports and air navigation service providers. The existing model has led to problems with the delivery of airspace change proposals (ACPs), particularly in more congested areas such as London, where there are multiple overlapping ACPs, each with a separate sponsor. This fragmented approach adds complexity and means that the development of a more efficient airspace design is at risk.

As the co-sponsors for airspace modernisation, DfT and CAA held a joint consultation on proposals to establish a UK airspace design service (CAP 3029) to produce a modernised and holistic airspace design for the UK.

Both DfT and CAA published a response to this consultation (CAP 3106), stating that NERL will provide the UKADS, subject to changes to the licence granted under section 6 of the act. The government’s approach to implementing this policy is to make the UKADS a function of NERL, with any licence obligations falling on NERL itself.

To achieve this, the Secretary of State for Transport has used the power set out in section 98(2) of the act to make the Transport Act 2000 (Air Traffic Services) (Amendment) Order 2025. This Order, which came into force on 15 August 2025, amends the definition of ‘air traffic services’ in section 98(1) of the act to add the activity of developing and making an airspace change proposal to the CAA.

The Secretary of State has also used the power in section 11(4) of the act to make the Transport Act 2000 (Air Traffic Services) (Prescribed Terms) Regulations 2025. These Regulations, which also came into force on 15 August 2025, designate certain terms in the licence as ‘prescribed terms’. Those prescribed terms may then be modified by the Secretary of State, under section 11(3)(b) of the act.

The prescribed terms are:

1. Any term specifying air traffic services authorised under a licence.
2. Any term specifying the area in which a licence authorises the provision of air traffic services.

Statutory requirements

Under section 11A of the act, before the Secretary of State for Transport can modify a licence term, a notice that fulfils certain statutory requirements must be published.

If the Secretary of State then decides to modify the licence, a notice must be published that:

• specifies the modification
• specifies the date from which the modification is to have effect
• gives the Secretary of State’s reasons for the modification
• states the effect of the modification
• states how any representations made during the specified period have been taken into account
• states the reasons for any differences between the modification and that set out in the notice of the proposal

Notice of modifications

Part 1 – Terms of the Licence

Current version

1. The Secretary of State, in exercise of the powers conferred by section 6 of the Transport Act 2000 (the “Act”) and of all other powers exercisable by him for that purpose, hereby grants to NATS (En Route) Limited (the “Licensee”) a licence authorising the Licensee:  

a) to provide air traffic services in and in respect of the Licensed Area designated in Schedule 1 (“the En route (UK) Area”) from the date specified in paragraph 5 and for the period specified in paragraph 6, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3; and 

b) to provide air traffic services in and in respect of the Licensed Area designated in Schedule 2 (“the En route (Oceanic) Area”) from the date specified in paragraph 5 and for the period specified in paragraph 7, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3.

Proposed version, 4 September 2025

1. The Secretary of State, in exercise of the powers conferred by section 6 of the Transport Act 2000 (the “Act”) and of all other powers exercisable by the Secretary of State for that purpose, hereby grants to NATS (En Route) plc (the “Licensee”) a licence authorising the Licensee:

a) to provide air traffic services, except those set out in paragraph (c), in and in respect of the Licensed Area designated in Schedule 1 (“the En route (UK) Area”) from the date specified in paragraph 5 and for the period specified in paragraph 6, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3; and 

b) to provide air traffic services, except those set out in paragraph (c), in and in respect of the Licensed Area designated in Schedule 2 (“the En route (Oceanic) Area”) from the date specified in paragraph 5 and for the period specified in paragraph 7, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3; and

c) to provide air traffic services in respect of making an airspace change proposal to the CAA, or developing such a proposal with a view to making it to the CAA as provided for in section 98(1)(f) of the Act, in and in respect of the London Flight Information Region, the London Upper Flight Information Region, the Scottish Flight Information Region, the Scottish Upper Flight Information Region and the En route (Oceanic) Area, for the period specified in paragraph 6, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3.

Modified version to come into force

1. The Secretary of State, in exercise of the powers conferred by section 6 of the Transport Act 2000 (the “Act”) and of all other powers exercisable by the Secretary of State for that purpose, hereby grants to NATS (En Route) plc (the “Licensee”) a licence authorising the Licensee:

a) to provide air traffic services, except those set out in paragraph (c), in and in respect of the Licensed Area designated in Schedule 1 (“the En route (UK) Area”) from the date specified in paragraph 5 and for the period specified in paragraph 6, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3; and 

b) to provide air traffic services, except those set out in paragraph (c), in and in respect of the Licensed Area designated in Schedule 2 (“the En route (Oceanic) Area”) from the date specified in paragraph 5 and for the period specified in paragraph 7, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3; and

c) to provide air traffic services as set out in section 98(1)(f) of the Act, in and in respect of the London Flight Information Region, the London Upper Flight Information Region, the Scottish Flight Information Region, the Scottish Upper Flight Information Region and the En route (Oceanic) Area, for the period specified in paragraph 6, subject to the Conditions set out in Parts II and III of this Licence and the terms in Schedule 3.

Date of modifications coming into effect

Allowing for the minimum period of 28 days’ notice specified in section 11A(8) of the Act, these modifications will come into force on 19 December 2025.

Proposal reasons

In 2023, DfT and CAA jointly initiated a project to identify how a new single entity responsible for airspace design could better achieve the level of ambition set by the AMS.

After analysing several potential models, along with preliminary conclusions regarding their viability, NERL was identified as the only organisation in the UK with the required level of resources and the design expertise to provide the UKADS at the necessary pace. A public consultation was undertaken in autumn 2024 to gather views on the approach of tasking NERL to provide the UKADS.

NERL is the regulated monopoly air traffic services provider for ‘en route’^{[footnote 2]} and some terminal approach airspace. Under the Act, the Secretary of State licences NERL to provide en route air traffic services in the UK: the licence is the formal means through which NERL is subject to economic regulation by the CAA.

As explained in previous publications^{[footnote 3]}, following the amendments to the definition of ‘air traffic services’ in the Act and to set up the UKADS as a function within NERL, it is proposed that modifications will be made both to the terms of the licence – by the Secretary of State – and to its conditions – by the CAA.

Paragraph (1)(a) of the current licence terms authorises NERL to provide air traffic services in respect of the London and Scottish Flight Information Regions and Upper Flight Information Regions, as well as any adjacent airspace delegated to the UK by an international agreement – together described as the ‘En route (UK) area’. Paragraph (1)(b) authorises NERL to provide the same air traffic services in respect of the Shanwick Flight Information Region and Shanwick Oceanic Control Area – together described as the ‘En Route (Oceanic) Area’.

The proposed modification carves out from (1)(a) and (1)(b) the activity of making and developing airspace change proposals, by adding paragraph (1)(c): this authorises NERL to provide such air traffic services in respect of the:

• London Flight Information Region
• London Upper Flight Information Region
• Scottish Flight Information Region
• Scottish Upper Flight Information Region
• En Route (Oceanic) Area

The proposed modification furthers the Secretary of State’s duty under section 1 of the Act to maintain a high standard of safety in the provision of air traffic services.

Proposal effects

The proposed modifications to the licence enable NERL to make, or develop with a view to making, an airspace change proposal to the CAA, throughout UK airspace.

By making such airspace change proposals and sponsoring them through the CAA’s airspace change process (CAP 1616) to deployment, NERL will be able to contribute to the delivery of modernised airspace.

While the Secretary of State’s modification will authorise this activity to be carried out throughout UK airspace, it is envisaged that the UKADS will initially prioritise airspace change proposals based on priority areas, set by the sponsors in the form of strategic objectives. This could mean, for instance, requiring NERL to begin with airspace re-design for the London TMA region^{[footnote 4]}, which is the UK’s most complex airspace and where modernisation can provide the greatest benefits.

Representations made and how they have been considered: summary

Following the notice published on 4 September 2025, 16 responses were received during the period to 1 October 2025. Two were from the same individual, so they have been treated as one response for the purpose of analysis, incorporating the comments from both versions. Thirteen were from organisations, one from an individual and one did not specify. Eight of the organisations that responded are primarily based in the south-east.

Overall, precisely two-thirds of respondents agreed with the proposed modifications, with 4 opposed and one who did not specify a view.

The majority of respondents did not make drafting suggestions or comment directly on the content of the proposed licence modifications. In most cases, respondents took the opportunity to express broader views on the concept of the UKADS or on airspace modernisation, in some cases reiterating points originally made in response to the DfT and CAA consultation on the proposals to establish a UKADS.

These included, for example:

• the benefits of airspace modernisation
• the need for transparent and effective governance of the UKADS
• a need to ensure fairness for different airspace users across the country

In general, the terms of NERL’s licence are not the appropriate place to address these points, but the co-sponsors anticipate that the upcoming package of publications relating to the UKADS will cover many of the points raised by respondents.

Three respondents suggested amendments to the proposed modifications, which sought to include differing forms of noise-related requirements within the licence terms. They proposed that:

• the licence should be made subject to the approval of a community forum consisting of overflown residents
• a statutory duty to consider noise to be included directly in the licence terms
• the terms should reference conditions setting out noise monitoring requirements

The purpose of the terms is fundamentally to set out under the licence what NERL is authorised to do by the Secretary of State, where and for how long it will be in effect, rather than to impose constraints on NERL or set out the details of its governance. These suggested amendments have, therefore, not been taken forward as they would not be appropriate to include in the licence terms.

As the UKADS provider, NERL, like existing sponsors of airspace change, will be required to follow the CAA’s airspace change process, CAP1616: this includes requirements to engage with local communities and factor in environmental considerations such as noise.^{[footnote 5]}

One respondent suggested an opportunity to simplify an element of the drafting of the proposed modifications: this amendment has been adopted and is incorporated in the final modifications set out above.

Reasons for differences between proposed and final modifications

Whereas the proposed version published on 4 September 2025 previously set out in full the definition of the relevant aspect of air traffic services, the final version simply references the part of the act that sets out this definition. This simplifies the wording and therefore improves readability and is consistent with how the act is referenced elsewhere in the terms.

The relevant part of the proposed version originally read: ‘to provide air traffic services in respect of making an airspace change proposal to the CAA, or developing such a proposal with a view to making it to the CAA as provided for in section 98(1)(f) of the Act…’

The equivalent part of the final version instead reads: ‘to provide air traffic services as set out in section 98(1)(f) of the Act…’

No other changes have been made to the modifications as previously proposed.

It is DfT’s view that the final modifications do not differ significantly from the proposals published on 4 September 2025 and that there is no requirement under section 11A(6) of the act to seek further representations before the modifications come into effect.

Next steps

The modifications will come into effect on 19 December 2025.

The modifications to the licence will be incorporated by the CAA and published on the CAA’s website.

Separately, the CAA plans to consult on final proposals to change the conditions of the licence, which would require NERL to provide the UKADS and enable it to recoup the costs of doing so.

1. As set out in CAP 3106: Airspace modernisation: Outcome of the consultation on a UK airspace design service, the mandate of the UKADS is to submit a single design that prioritises maintaining a high standard of safety, is consistent with the AMS, secures system-wide benefits and overall network optimisation that results in the most efficient and resilient airspace network possible, while giving due consideration to local circumstances and environmental impacts. ↩

2. ‘En route’ means that part of the flight from the end of the take-off and initial climb phase to the commencement of the approach and landing phase. ↩

3. See the CAA’s useful links related to the UKADS for more information. ↩

4. ‘London TMA region’ means the London terminal control area (generally abbreviated to London TMA) and adjoining airspace serving neighbouring airports (for example, Bournemouth and Southampton) that is outside the area but has interdependencies with the London TMA. ↩

5. The CAA is currently consulting on proposed changes to CAP1616. Any changes will retain the important principles of a transparent, evidence-based airspace change process that will involve impacted stakeholders. ↩