Heathrow has been controversial for as long as anyone can remember.
Since the airport's inception in 1946 it has mirrored the politics and commercial situation of its time. Heathrow is the world”s most important (and largest) international air hub, and the business gateway to the United Kingdom. It certainly is not the world”s best airport from a user friendly point of view but somehow it works. Landing slots for aircraft at Heathrow are the most valuable on the globe. That says it all.
BAA, the airport”s owner, is now controlled by a group led by Ferrovial of Spain.
It is not a question of whether an absentee landlord should have been allowed to purchase (with borrowed money) one of this country”s major assets, nor if BAA should be broken up. This discourse is regarding the vital central area redevelopment. What is the current situation? Where is it going? And what is the future?
If BAA is to be disembowelled, and that seems to be the general view prior to the Competition Committee”s announcement expected later this week, what is to happen to the substantial funds that this will realise? The fact that BAA is highly geared is well known. BAA has indicated that it hopes to complete a ”9bn refinancing package shortly. However nothing is definite and there is no actual timescale.
It was back in November 2005 that the then managing director of Heathrow, Mick Temple, proudly unveiled a scheme which he named as Terminal East. Costing ”1.5bn it would effectively replace T1 and T2 with a totally new building much the same size as the new T5. He indicated it would be completed by the 2012 Olympics. By June 2007 another Heathrow MD, Tony Douglas, who had led the T5 development, confirmed that outline planning permission had been approved by the London Borough of Hillingdon. This was good news in that no public enquiry was needed for what is a relatively simple scheme to develop a ”brown field” site.
One month later Douglas resigned, Mark Bullock taking over. Following the debacle of the T5 opening he too will be replaced in September, this time by Mike Brown, the chief operating officer of London Underground.
The proposed Terminal East has been designed by Foster and Partners, responsible for the one-time wobbly Millennium Bridge but also the new Beijing Airport (and London Stansted). Tenants are likely to be the Star Alliance plus possibly Virgin Atlantic. Rather like T5 the terminal construction should cause little disruption in terms of nuisance and traffic problems. The number of cars and coaches in the central area has already been dramatically reduced since British Airways” departure from T1 and the introduction of a new car park for T3 has sorted out the previous access difficulties for that complex.
Ask BAA just where they are with Terminal East and you get a somewhat convoluted answer. In the meantime BAA itself has had a change in management with Colin Matthews in as chief executive officer, replacing Stephen Nelson. Matthews was formerly of Severn Trent Water and spent five years as technical director of British Airways.
"In July both Air New Zealand and United (Airlines) successfully moved from Terminal 3 to Terminal 1. Later this year British Airways are planning on moving more of their operation into Terminal 5. We continue to work with our airline community on the airline moves programme. This is a highly complex undertaking which will see airlines located in their alliance group, and will enable us to undertake a major programme of transformation including the construction of Heathrow East," said a BAA spokesperson.
Just to remind readers, 92% of British Airways” Heathrow operations is expected to be ensconced in Terminal 5 by the start of the summer 2010 programme, with the balance in T3. This will also be the home of its Oneworld partners, Virgin Atlantic and those carriers operating the Airbus A380.
Originally opened in 1986 a refurbished Terminal 4 will be the location of Air France and the members of the Skyteam alliance. It is no longer linked to the Heathrow Express which now goes via the central area to T5. T1 is bmi, to be joined by the rest of the Star Alliance Heathrow operators.
Moving 50 airlines around during a 12-month period is, and has been, a complex task and BAA is to be complimented on what has been a relatively smooth process. The public only see a change of check-in area and arrival at a different terminal but in truth each change is very complicated concerning all the multifaceted components of airport operations.
Incorporating the lessons learnt with T5, Terminal East was part of a programme to ensure virtually a new Heathrow in time for the 2012 Olympics. BAA had announced that construction would start in January 2009 on the new terminal, the final piece of the Heathrow jigsaw. They have confirmed that in fact enabling work has already commenced. The timetable is still on.
Whatever happens later this week regarding recommendations on the future of BAA it is essential that focus be continued regarding the prize asset, Heathrow and its redevelopment. ”1.5bn is a huge investment by any standards. While BAA will not confirm a possible postponement of Terminal East, rumours are circulating strongly at the airport. BAA is claiming any slowdown is due to the knock-on effect of the BA Terminal 5 move. However the suspicion is that money issues are the real cause. If the expected recommendations of the Competition Commission are that BAA should be split we need to know where the funds amassed are going to be spent.
Not we say on getting Ferrovial out of a re-financing hole.
An analogy can be drawn with a soccer club who sells a player for some outrageous sum with both manager and supporters expecting the windfall to be used for bolstering the team. Somehow the owners find another use for the money.
London 2012 is not the be all or end all, but promises were made. They should be kept. ”England Expects”.
Malcolm Ginsberg
http://www.baa.com/assets/B2CPortal/Static%20Files/Nov05HeathrowEastpresentation.pdf