The MoD said the deal will deliver a long-term, modern and reliable military air traffic management service and would save the British taxpayer up to 1 billion pounds over the next 22 years by merging 70 contracts into one.

The new joint venture, called AQUILA, will operate air traffic control at over 60 MoD sites across Britain and its bases in Cyprus, the Falkland Islands and elsewhere.

NATS, which is jointly owned by the British government and airline companies, controls commercial air traffic in Britain and other countries.

(Reporting by Neil Maidment and Sarah Young, Editing by Paul Sandle)