The United Kingdom’s Heathrow Airport is facing harsh criticism and calls for a management overhaul from a group of its important clients who have come together in what travel expert Simon Calder, writing in The Independent, has called “an unprecedent coordinated attack.”
In a statement put together by high-profile airport customers such as the Heathrow Airline Operators’ Committee (AOC), IAG (the umbrella group for British Airways), Virgin Atlantic, and the Arora hospitality group, Heathrow is accused of being out of line with other competitor hubs around the world. It is, the group of critics say, “the world’s most expensive airport, with passengers and airlines today paying £1.1bn more each year than if charges were in line with equivalent major European airports.”
Heathrow Reimagined?
The statement effectively launches a campaign for change, branded “Heathrow Reimagined”. The first step, the group behind it say, should be for the Civil Aviation Authority (CAA) “to conduct an urgent and fundamental review into the way in which Heathrow, the UK’s only hub airport and the largest in Europe, is regulated, for the benefit of consumers, businesses and the UK economy”.
Pulling no punches, the group says that part of the problem is the airport’s “substantial market power” which they say, “has, for too long, given it an incentive to spend inefficiently which means it has acted against the interest of both consumers and airlines.”
Ageing facilities and a declining customer experience
There have been improvements to the airport’s offer, which include the addition of the Richard Rogers-designed Terminal 5 in 2008 and the brand new “Queen’s Terminal” or Terminal 2, opened in 2014. But, the clients say, every time work takes place that increases the airport’s asset base, costs go up correspondingly.
And despite those improvements and plans for a new runway which have recently been backed by the new Labour government, the airport is accused of not keeping up with international standards. It suffers from “ageing facilities and a declining customer experience” according to Shai Weiss, chief executive of Virgin Atlantic.
Heathrow’s infrastructure, the group’s letter says, compares unfavourably with that elsewhere. Never mind a new runway, they say, Istanbul is building a whole new airport. What’s more: “New terminals at Munich, Frankfurt, Madrid, and Barcelona have all cost half or less, when adjusting for terminal size than the upgrades to Heathrow Terminals 2 and 5. If Heathrow is to expand and build a third runway, it cannot continue to gold-plate its construction costs and spend inefficiently.”
Monopoly results in high aviation and parking fees
Surinder Arora, founder of the Arora Group, made it personal in words that may galvanise public opinion, saying: “I have worked in and around Heathrow for several decades and have seen with my own eyes the decline in what used to be the world’s best airport. The current monopoly at Heathrow doesn’t only vastly overcharge passengers on aviation fees but also on their parking and a variety of other services.”
In response to the excoriating rebuke and calls for new management models, a Heathrow source speaking to Travel Weekly said there are already new regulatory models in the pipeline for the third runway. Still, the spokesperson defended current practices, pointing out that it is normal for consumers of a good or service to pay for the cost of providing or producing it.
