By John Burroughes Managing Director, Uniglobe Preferred Travel
In 2006 the Department of Transport confirmed its vision for expanding the runway at Heathrow and it took another year before the government set up a public consultation on the proposal.
I should have had a bet in 2006 as to whether I would still be a live to see a new runway, at either Gatwick or Heathrow open, I reckon I would have got good odds then, no chance now.
So, 10 years on, and with successive governments and decision-makers ducking the question we still don’t know exactly when a decision will be made. But when it does come you can be sure it will lead to a battleground of legal protests, objections and opinions which will take goodness knows how many years to sort out.
Then we were told it would take up to 10 years to construct, (Gatwick slightly shorter) and cost anywhere from £7.6bn at Gatwick or, according to the Davies commission, £17.6bn at Heathrow.
Gatwick clearly has a case as on the face of it, it would disrupt less people, would help strengthen the south-east economy and could be constructed quicker and cost less. Add to this their pledge not to increase its passenger charge above £15 plus inflation for 30 years, it’s clearly a compelling argument. There is also no doubt, since the current owners took over, that continuous investment and improvement in the customer experience is there for all to see.
If only the story stopped there, but the problem with Gatwick is twofold, firstly it is not a hub airport which is what all airlines need in order to fill their long haul scheduled planes with passenger and cargo traffic, this way they can keep the ticket prices we pay lower.
Secondly as I have said before, it’s ludicrous that there is no direct high-speed AFFORDABLE rail link between Heathrow and Gatwick, if this were the case even BA may favour Gatwick due to their lower operating costs.
While I am on costs, Willie Walsh CEO of IAG, British Airways parent company, slammed Heathrow airport recently saying “Heathrow is already the most expensive hub airport in the world with a history of inflating costs”. You cannot trust Heathrow to deliver anything in a cost effective manner, customers have been ripped off by Heathrow for years and leopards don’t change their spots”.
He added: “I’ll give you an example. We expressed interest in installing self-service bag drops. The airport estimated the cost at just under £150,000 per unit. We’ve been able to price the same unit at less than £15,000. That’s is one hell of a mark-up.”
When I looked at the proposed Heathrow expansion cost of £17.6bn, I can’t begin to understand how this figure is arrived at. The new runway is estimated at £182m whereas a new car park we are supposed to believe will cost £800m - we think parking in Brighton is expensive, imagine the cost per hour here!
Walsh also claimed “the majority of the money Heathrow raises from airport charges doesn’t go towards upgrading facilities but straight into the pockets of the airport’s shareholders. Heathrow paid £1.4bn to its shareholders in the last two years and only invested £1.3bn in the airport”
Don’t think the third and much cheaper option of extending the northern runway has gone away. Although not one of the Davies enquiries recommendations, it has not been totally dismissed, and nor should it be. This proposal is led by captain Jock Lowe, a retired Concorde pilot, who knows a thing or two about flying. Willie Walsh himself has publicly stated that the Heathrow Hub plan should be put back on the table. Heathrow is one of our strongest national assets and fundamental to the success of the UK economy.
The Hub option would be cheaper to build and run, less disruptive to local communities, it would put Heathrow on the national rail network for the first time and is totally extendable if and when Heathrow needs more capacity by extending the other runway. I would suggest we all watch this space. The other big gripe is the idea that passenger charges would have to be increased very early on, in order to fund the airport expansion. I thought this sounded particularly strange as at places like Twickenham and Wimbledon, debentures are offered to people who are willing to fund improvements in the facilities, this then results in preferential use of said facilities.
Whereas at Heathrow, it would appear we, the travelling public, would have to fund it by way of higher landing charges. The new infrastructure, which we wouldn’t be able to use for 10 years (and in my case I would probably be dead), would be owned by the company or “The Shareholders” out of which they would make even more money, so who are the share holders, I hear you ask?
The airport is operated by Heathrow Airport Holdings, which itself is owned by FGP TopCo Ltd, an International Consortium that includes Ferrovial Group (25%) (who construct transportation hubs), Qatar Holdings LLC (20%), Caisse de depot et placement du Quebec (12.62%), the government of Singapore investment Corporation (11.20%), Alinda Capital Partners (11.18%), China investment Corporation (10.00%) and Universities Superannuation Scheme (USS) (10.00%).
Heathrow is a primary hub for British Airways as well as the primary operating base for Virgin Atlantic, and our gateway to the world. If I have this right, after 10 years of discussion, an unknown number of years of legal wrangling, a further 10 years of building we should have the runway facilities we needed five years ago.
We would have paid (through higher landing charges added to our ticket price) the cost of the new facilities, which we wouldn’t own and the increased profit generated would go to the above shareholders some of whom may even have made a profit out of the building of the new facilities!
I think I’m beginning to understand where the price-tag for Heathrow of £17.6bn came from. A few weeks ago Theresa May stood in Downing Street and said her government would be a government for all of the people. I think it’s time Theresa and Willie had a little Tete a Tete. One thing you can be sure of with Willie Walsh is that he’s a straight talker, let’s hope Theresa listens.
