Morning:
10°c
BAA spent extra £24m for a 'smooth' opening of T5
Nick Goodway, Evening Standard28 May 2008
Heathrow owner BAA today admitted that it spent an extra £24 million in just three months in the run-up to the chaotic opening of Terminal 5.
It described the spending as "exceptional costs" associated with the opening of the terminal on 27 March which became a public relations disaster with hundreds of flights cancelled and tens of thousands of bags lost.
Incredibly, BAA, which is now owned by a consortium led by Spanish group Ferrovial, made no mention of the chaos in its announcement to the Stock Exchange today.
Instead it said: "These costs are associated with managing the opening of Terminal 5 to ensure it is smoothly integrated into the Heathrow operations, including fit-out, facilitating the mobilisation of key contractors, the recruitment and enabling of staff, testing to ensure the building is 'fit for purpose', coordinating the major overnight move activities, IT costs and testing baggage systems."
A spokesman said that any costs associated with the initial opening problems would be revealed in the next three-monthly figures from April to June but he did not expect them to be substantial.
British Airways, the airline operating out of Terminal 5, has already taken an £18 million hit from the opening days of chaos and has told the City to expect another £40 million to £50 million of extra costs.
The group made operating profits of £107 million in the first quarter of 2007 but managed to lose £51 million from January to March this year. Even before the various exceptional costs were taken into account, profits dropped from £123 million to £90 million.
The airports operator is facing growing calls for it to be broken up and could be forced to sell off at least one of its London airports.
Meanwhile, plans to link Heathrow to the national rail network and the Channel tunnel have been mooted by civil engineering experts.
If agreed, the scheme, designed by engineering group Arup, would replace the possible sixth terminal building that has been proposed to accommodate the building of a third runway.
Mark Bostock, Arup director, said he hoped the plan would make Heathrow more attractive for travellers arriving by rail rather than road.
It would include a 12-platform station, a twin-track 24km high-speed rail link and extra terminal capacity for check-in and baggage facilities.
The first step would be to extend the present high-speed rail line from the Channel tunnel which currently terminates at King's Cross St Pancras. It would then terminate at the new Heathrow Hub which would be built to the north of the airport, in place of the sixth terminal building awaiting planning permission.
Arup believes it can deliver the proposal for less than £10 billion and that the hub could be operating by 2017. A decision is likely to be made before the results of the consultation on terminal six are revealed later this year.
