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Face it, Heathrow isn't big enough for London
Michael Bishop19 Aug 2008
Tomorrow we expect to learn the Competition Commission's findings from its investigation into the supply of airport services by operator BAA. In April, the commission made it clear when announcing its "current thinking" that it had identified potential for competition, through separate ownership at all BAA airports. Its confirmation of that would be excellent news for airlines and travellers alike - none more so than those flying in and out of Heathrow. But will increased competition be enough?
Despite Terminal 5's bad publicity, travellers this summer are in fact experiencing a new Heathrow. The opening of T5 has taken away thousands of passengers a day from Terminal 1, which is where my airline, bmi, is based. A whole raft of lounge improvements and upgrades are under way.
Unfortunately, it is just not enough. The interior improvements are important - but the real problem with Heathrow is, and has always been, with what is happening outside the terminals.
Heathrow's two runways are operating at 99 per cent capacity. The slightest problem such as fog or heavy rain can cause serious delays. And we know what the delays mean - queues of people waiting for flights, sleeping on floors.
These problems exist because Heathrow is at a critical point in its development. It must expand if it is to maintain its superior position against transfer airports such as Paris, Amsterdam and Frankfurt. It can do this only by adding an additional runway. When comparing Heathrow with our European neighbours it pains me to know that Charles de Gaulle airport in Paris has four runways, that Frankfurt will open its fourth runway in 2011, and that Amsterdam Schiphol airport has five runways. London Heathrow - the world's busiest international airport - has two.
Not only do our competitor airports in Europe have more runways but they also operate at approximately 75 per cent capacity. They can respond with greater flexibility to the demands of the weather: unsurprisingly, they have fewer delays. And make no mistake - those airports and their home carriers really are competitors to UK plc. They will be watching our airports' summer silly season with glee, as more transfer traffic continues to switch from Heathrow to their European hubs.
Heathrow is full, its route network is shrinking and our competitor airports in Europe are growing. We must act now to remain competitive.
The Government has already said it supports the expansion of Heathrow's runway capacity. Unfortunately, successive governments have been saying this for 20 years, with nothing actually being done. As the decision on a third runway continues to be delayed, so too do thousands of business travellers and holidaymakers.
Now we await the Government's judgment on the latest Heathrow consultation. It would be helpful if ministers did not give the impression of partiality to BAA. We believe very strongly that BAA should not operate any new runway and terminal: a competing airport operator should be introduced. The proposed new site is geographically separate from the existing airport and could successfully be jointly operated with a single air traffic control system. BAA has shown us and other airlines less than satisfactory customer service, at the same time generating a return on its sales of 40 per cent. Meanwhile, it has imposed a near tripling of handling fees in a 10-year period. This is iniquitous. Heathrow cannot afford a delay in the building of the third runway - but its development should not be left solely to BAA.
Much exposure has been given to those who are lobbying for Heathrow to displace its domestic transfer traffic to road and rail in an attempt to avoid any further expansion. But to do this would have a much wider and far-reaching impact on the whole infrastructure, business viability and future success of the airport. Getting rid of transfer traffic is simply not an option. Heathrow is the United Kingdom's connection to and from the world, not just London and the South. And domestic air services are vital to the competitive development of other major cities in the UK.
Meanwhile, as any new runway will take time to implement, bmi is eager to find alternative solutions. We, along with other airlines, support using Heathrow's existing runways on a "mixed mode" basis, allowing them to be used for both take-offs and landings. The current method demands planes land at one runway until 3pm, then using the other runway for the rest of the day. Mixed mode use of the existing runways could allow 60,000 more flights a year and will make a significant impact on the congested airport.
In addition, apart from heads of state and government business, private executive jets should be banned.
If the UK aviation industry is going to come out of the present downturn intact, and withstand soaring fuel prices, it needs to have a flagship airport capable of competing. And despite fuel prices, I believe passenger numbers will continue to increase. Aviation has had to face many problems in the past and any downturn in the global economy will have its impact. Yet the industry has proved to be extremely resilient in the past and reinvented itself to deal with these situations. The cyclical nature of the business means it will certainly return and Heathrow must be ready to deal adequately with the overall increase in demand.
Combined with the rising pressures of competition and fuel, airlines such as bmi must also balance the competing interests of increased demand for flights and more destinations with the growing environmental concern regarding climate change. It is no easy task but one that bmi is determined to meet.
We remain committed to meeting environmental standards on noise and pollution and minimising the impact any development may have on local communities. We should not forget that the aviation industry is not a big polluter, being responsible for only two per cent of global CO2 emissions - but it is an industry that is taking this issue very seriously and working hard to reduce emissions and noise through advances in aero engine technology and operational practices.
Whatever travellers' experience of Heathrow this summer, its reputation is now on a knife-edge. We must take decisions on expansion now, for the sake of all users of the airport, as well as to secure the financial benefits it brings to the UK economy. But we must find solutions to Heathrow's longrunning problems now - not in another 20 years' time.
• Sir Michael Bishop is chairman of bmi.
