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Airport industry bosses agree that Heathrow is a mess

Jun 03, 2013 9:57 am

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Transport leaders in the UK like to play a game of constant blame shifting, so it’s refreshing to hear experts weigh in with assessments that make sure responsible parties are called out for their failures.

— Jason Clampet

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IATA director general Tony Tyler listens to a question at a news conference in Beijing. Jason Lee / Reuters


Heathrow has been branded one of the biggest airport problems by senior industry figures. Aviation bosses say the west London hub is too expensive and overcrowded, warning that its service may decline unless it changes course.

Tony Tyler, the director general of the International Air Transport Association (Iata), said Heathrow “drives me mad with frustration”, and accused management of not taking tough decisions to cut costs and abusing its monopoly position.

In a change from attacking British government policy on Heathrow, Tyler lambasted the airport directly, warning that it risked turning its dealings with airlines into a constant struggle over cost, service levels and capacity.

Heathrow has been pushing for a 40% real-terms increase in landing charges that airlines regard as excessively high, raising the prospect of higher fares. The airport argues that it needs to reward shareholders after investing billions of pounds over the past decade, including on the construction of Terminal 2, scheduled to open next year.

However, in April the CAA, the regulator that caps airport charges, said it would ensure further rises were kept below inflation until 2019. Fees have surged to an average of £20.78 per passenger over the past five years.

Speaking at the world air transport summit in Cape Town, Tyler said the proposed cap was “weak medicine for a major illness”. He also criticised Heathrow’s response as disappointing and “not what you would expect of an important business partner”.

He added: “In a way only possible for a monopoly, it is threatening to cut capital expenditure to the detriment of service levels and operational resilience instead of getting serious about efficiencies.”

Heathrow should cut costs, improve operational efficiencies and consider outsourcing, he said.

Other aviation bosses echoed Tyler’s remarks. Alan Joyce, chief executive of Qantas and outgoing chairman of Iata, said: “When you look at what the airline industry has gone through – cutting costs – we don’t see that drive in the airports to use new technology and change practices in the way airlines have done.”

He accused several airports of “taking the easy approach of trying to boost income through raising charges”.

American Airlines (AA) and US Airways, poised to merge to become the world’s largest airline, also said charges at Heathrow were too high. Tom Horton, AA chief executive, said: “We think it is contrary to the objectives of a robust and growing hub. It’s not as competitive as it could be.”

Doug Parker of US Airways, who will replace Horton after the merger, said the charges at Heathrow were limiting airlines and their alliance partners. “We need to have a hub in Europe that is competitive with Frankfurt, Schiphol and Charles de Gaulle. We will not be able to expand in the way we want to,” he added.

John Leahy, chief operating officer of Airbus, the aircraft maker, said: “In terms of infrastructure around the world, British airports are a little bit behind.” He warned Heathrow must improve or risk losing traffic to other key hubs.

A spokesman for Heathrow said: “The airport has invested £11bn over the last decade in new facilities such as Terminal 5 and the new Terminal 2 and passengers say they have noticed the difference.

“We want to further improve the passenger experience but airlines’ draconian proposals to make swingeing real-terms cuts will have the opposite effect.”

The CAA proposals are under consultation until 25 June, and the regulator will reach a decision on charges by the end of the year.

Despite their criticism, aviation leaders lent support to Heathrow’s campaign for another runway.

Horton said there was demand for additional flights to London that the airport was unable to serve, adding that AA considered the airport’s expansion to be the only way to bolster capacity in the UK.

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