The festive period is normally a time to relax and reflect on events during the past 12 months. However those of you who picked up a newspaper or switched on the television news over Christmas and the new year would have been reminded of one of the many and constant challenges facing the aviation industry.
Security advice from the UK government led us to cancel four flights ” two to Riyadh and two to Washington. This coincided with the Department for Transport”s announcement about the introduction of sky marshals. Together, these stories dominated the headlines. They also reaffirmed that post 9/11, the world in which we live has changed forever. On a positive note our customer reaction has been good ” they recognise the need for enhanced security and accept that their journeys may not be as smooth as we”d like them to be.
As we look ahead, countering terrorism is not the only element that will make this year a tough one. Financially, revenue remains at the forefront of everyone”s minds and tackling costs will remain key. Despite an achievement of reducing costs by ”1.7b in the past two years it is still less than the drop in revenue over the same period. We were encouraged by our latest traffic figures last week which showed some improvement driven by long haul premium volumes. However short haul premium continues to be weak, our pension shortfall of just under ”1b needs to be addressed and our debt whilst manageable stands at ”4.8b.
All of these financial issues will be taken into consideration in our annual business plan which is due to be announced shortly. This will set our business agenda for the next couple of years and inevitably it will help us work differently and more efficiently.
One of the key movements in last year”s aviation calendar was the government”s publication of the aviation white paper in December which means for the first time the industry now has an effective forward-looking policy. The paper gave recognition to the enormous benefits that a third runway at Heathrow will bring to Britain and reinforces the airport”s key role as the UK”s main gateway. In addition to the third runway, Heathrow”s continuing development has been guaranteed with Terminal 5 and the opportunity to introduce mixed mode landings and take offs. In 2004 we will continue to work with the government and local authorities to ensure the environmental issues at Heathrow are resolved. We will also engage with all interested parties to ensure that the third runway is built as soon as possible in the timescale specified by the government.
As ever all of these challenges will place extra demands on our staff. It is a credit to them all that we have survived the extraordinary buffetings of the last three years ” lesser companies and lesser people would have been part of history by now.
Rod Eddington
ON THE SOAPBOX is a new monthly feature by ABTN where we offer distinguished leaders in the travel field an opportunity to air their views on matters that concern us all. Rod Eddington is the most powerful man in the British airline industry. His reflections on the year just gone are important but even more so are his comments on the challenge ahead.