Up, up and away with BAA?

Last Friday 14th March 2007 when BAA opened Terminal 5 at Heathrow should have been a day of celebration for the company but on the same day a committee of MPs has called for the break-up of BAA, saying that its dominance has proved stifling for competition. BAA, owned by the Spanish brick company Ferrovial, runs London's Heathrow, Gatwick and Stansted airports, Glasgow, Edinburgh, Aberdeen and Southampton.

MPs said BAA's dominance is "bad for passengers" and the aviation industry. BAA said a break-up would only delay "the provision of extra runway and terminal capacity". However the MP’s committee has stated "BAA's monopoly position in the UK airports sector is unnecessary. Indeed, it is bad for passengers and bad for the aviation industry.

BAA was bought by Ferrovial for £12 Bn, mostly borrowed as the Spaniards put in only £460 of their own money and £10.5 Bn. of this debt still sits on its balance sheet. The real winners were BAA’s former shareholders who happily accepted their absurdly inflated bid. Now Ferrovial with the connivance of the so called regulator, the CAA, is saddled with these huge debts which it would like us, the travelling public to pay off. The company serves almost 150m passengers a year but in the past year has been attacked by the public and airline industry alike for its mismanagement of airport operations with third world style camp outs in its terminals and horrendous security queues.

The criticism of BAA is that it should have predicted the predictable and planned accordingly but basic infrastructure has been dismal such as the inadequate luggage handling system at Terminal 4. It also turns out that Terminal 5 has been built as a result of a succession of broken promises by BAA which has consistently lied about its intentions over the years.

BAA’s recently departed managing director Stephen Nelson admitted to MP’s that, 12 years ago BAA had given public assurances that proved to be false, saying that a third runway would not be needed.

In 1995 BAA stated in its official newsletter: “BAA has said repeatedly that Terminal 5 will not lead to a third runway. BAA has said repeatedly THERE WILL NOT BE A THIRD RUNWAY. And BAA has been proved right. The Secretary of State has accepted the BAA view. The issue has been settled; people’s concerns have been met. What now of those who claimed BAA was not telling the truth?”

In 2001 BAA and the Government accepted the recommendation of the planning inspector who approved Terminal 5 that the number of flights at Heathrow should be capped at 480,000. However, despite those BAA assurances in 1995, ministers now support a third runway and a plan was published in November that would increase the capacity to 702,000 flights.

The double standard has led to a rash of broken promises on Heathrow. Terminal 4 was approved in 1978, subject to a cap on annual traffic movements of 275,000. Two years later BAA recorded 287,000 movements and 376,000 in 1990. When Terminal 5 was approved in 2001, the planning inspector and BAA stated that a third runway would be “totally unacceptable”, and set a new cap of 480,000 movements. But by 2003 a White Paper aimed at 700,000.

But BAA has not misled the public on its own but has had a collusive relationship with central government with its current head of Public Affairs being Tom Kelly, former press secretary to Tony Blair. Take the current Heathrow greenwash first. Ministers repeat the mantra that “Heathrow's expansion will only go ahead within strict environmental limits”. But they know full well that the absence of legal standards on noise leaves communities defenceless. New EU air-quality standards had looked like an insuperable hurdle to a third runway, but are being fudged with ropey claims that road traffic emissions will fall. Two weeks ago the Advertising Standards Authority ordered British Airways to withdraw the claim, made by its CEO in an e-mail to Executive Club members, that the third runway would reduce carbon dioxide emissions because aircraft would no longer have to waste fuel queuing to take off or land. This flatly contradicted Whitehall models, which assume that the new runway will raise CO2 emissions by 2.6 million tonnes a year from the 200,000 extra flights. When I lived on the Great West Road in Hounslow directly under the landing approach a mile from the airport the houses had triple glazing and soudbox ventilators to cope with the environmental fall-out. Walking outside you inhaled air that smelt and tasted of Avjet, as modern aircraft are particularly inefficient at burning fuel when the engines are throttled back for landing.

Secondly, take the arguments about capacity. BAA's figures demonstrate clearly that Heathrow is not full. Not remotely. The appendix to the government consultation on the third runway states that 67 million passengers used Heathrow in 2006, and that this could rise to 122 million if a third runway were built. But it also shows that 95 million people could use Heathrow if “maximum use were made of existing runways”. At one stroke we are looking at a deception, perhaps the greatest ever perpetrated on the British people by the optimistically named Department for Transport. For BAA itself is telling us that 28 million more people could use Heathrow without a new runway and without breaking the cap on flights.

How? By using larger planes and filling more seats. Jeff Gazzard, of Airport Watch, says that if Heathrow were not allowed to expand, it could spur the airline industry to invest more rapidly in larger aircraft like the A380, on which some are already hedging their bets. Bigger planes would not solve climate change, although they would reduce local pollution. The point is that we have been told that Heathrow is full when it is not. That kind of distortion suggests that the DfT has ceased to function as an arm of government and has become a mere subsidiary of BAA.

The justification is the importance of aviation to the economy. It would be foolish to argue that air travel is not important to business. But some of the mythology is misleading. The growth in air traffic is overwhelmingly from leisure travel, not business. More than 80 per cent of international travellers at UK airports, and 60 per cent at Heathrow, are holidaymakers. Outbound tourism outstrips inbound, creating a whopping £18 billion balance of payments deficit. Only this week, the Travelodge chain of hotels called for an end to unfair tax breaks for budget airlines, which it said were “the single biggest cause of decline in traditional [UK] tourism resorts”. It is one thing to treat the air industry as a special case; it is quite another thing to distort the facts. And here the Government's collusion with the industry is a problem.

No where does this collusion seem more dramatic than with the unfit for purpose “watchdog” the Civil Aviation Authority, the CAA, and its passenger watchdog, The Air Users Council which has been so inept in enforcing air passengers rights under EU Law. 261 that the EU has threatened enforcement action against them and Ryanair actually give passengers a leaflet saying the law is stupid and they won’t comply with it. I must remember this defence the next time I’m stopped by a police officer! I’m sure I would receive a succinct response.

Anybody who has used Heathrow’s clapped out facilities over the past 5 years has helped pay for the gleaming new Terminal 5 but as it is reserved for British Airways customers they will not have the benefit of it if they fly with another airline. Despite this they will get to share the burden of a 23.5% increase in airport charges next month as in a dramatic award for failure the CAA has allowed BAA to double charges over the next 5 years. What does BAA have to do other than sit back and count the cash?

As for Terminal 5 when the Queen opened this terminal of broken promises on Friday this was a “soft” opening with a hand picked and screened audience lest Her Majesty, Government Ministers and BAA’s exceptionally talented and remunerated management be exposed to the gratitude of the travelling public. It will start to open to real people on the 27th March. One surprise is that 54% of gates will not have air bridges and consequently step free access as provided for under phase 3 of the Disability Discrimination Act which became law in October 2006. Indeed under our wonderful regulator disabled people are effectively excluded from UK airports unless they book “assistance” in advance, which is not what the Act says. Perhaps the Government could pursue its “Respect” agenda by respecting its own laws and ensuring its regulator enforces them?