Put an end to the Heathrow misery

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The depressing thing is the relentless predictability of it all. The interminable delays at security. The shuffling crowds in search of somewhere to sit as yet another flight is delayed. Worst, when you eventually escape you know the reprieve is only temporary. You will soon be flying back to broken travelators, long queues at immigration and mayhem in baggage reclaim. Welcome to Heathrow.

I could go on. I will. I have seen too much of Heathrow lately to feel anything but rage towards one of the world’s busiest airports. Starved of investment, inefficient and understaffed, it is a veritable money machine for its owner BAA. For the rest of us it is a nightmare – the unacceptable face of monopoly capitalism.

You know the form. The check-in queues snaking hundreds of yards into temporary marquees. Coming back, the endless circuits in the skies above southern England as the pilot explains that the airport has run out of landing slots. Vast quantities of greenhouse gases pumped needlessly into the atmosphere.

Contrast the capacious splendour of the retail emporia that deliver a fifth of BAA’s revenues, with the cramped lounges, broken chairs and squalid toilets on offer to those unlucky enough not to have access to one of the airlines’ lounges. Oh, and one other small thing: on my last half-dozen trips not a single flight has left or landed on time.

None of this is the fault of BAA, of course. Nothing ever is. Heathrow, we must understand, is a victim of its success. We must blame booming air travel, capacity constraints, planning inspectors, price restrictions, security scares and, horror of horrors, school holidays. Anyone but BAA.

I listened the other day to one of the company’s managers explaining that the wait at security (this in the so-called fast track) was due to lack of space in Terminal 4. Nothing could be done until Terminal 5 opened next year. This from an airports authority that allocates 48,000 square metres to shopping malls. On this particular day several perfectly usable X-ray machines stood unstaffed and idle.

You learn some tricks. Check in online. Head straight for a lounge. Never return to Terminal 3 or 4 with anything more than hand luggage unless you have a couple of hours to spare. Avoid long-haul flights on Boeing 777s – for reasons unexplained they always seem to park on remote stands miles from the terminal.

I used to think I was unlucky. The evidence is otherwise. Surveys commissioned by the Office of Fair Trading say that Heathrow ranks fifth among 50 big airports at home and abroad in the revenues it gouges from passengers. Measure customer satisfaction and it is 56th out of 58.

The gap is not hard to explain. BAA’s ownership of Heathrow, Gatwick and Stansted gives it an effective monopoly of air traffic in southern England. The three airports account for more than 80 per cent of the flights and 90 per cent of the passengers leaving the south-east and East Anglia. BAA can do what it likes. Unsurprisingly, it does.

The absence of competition means BAA has little if any incentive to expand capacity or to improve facilities. Why should it care if passengers have a terrible experience at Heathrow when their only alternatives are BAA-owned Gatwick and Stansted? As the OFT says, competition would encourage investment in capacity and quality.

Regulation has failed. The Civil Aviation Authority sets the take-off and landing fees BAA levies on airlines, but the interests of passengers are essentially ignored. The regulatory and pricing framework has its own perverse incentives, encouraging BAA to “gold-plate” non-essential projects while neglecting long-term investment.

The answer, as it would be in any other industry, is for the Competition Commission to break up the monopoly. The OFT has concluded that even with the present capacity limits at all three of London’s main airports, there would be substantial scope for competition if they were separately owned. This, some might say, would be tough on Ferrovial, the Spanish company that only last year spent more than £10bn to buy BAA. Ferrovial knew the risks.

BAA’s answer is that it alone has the financial muscle to fund a necessary expansion of the airports over the next 30 years. The argument is a non-sequitur. To the contrary, dismantling its monopoly would encourage both more investment and greater efficiency.

There are lots of other problems with the structure of Britain’s aviation industry. They include the mispricing of take-off and landing slots at the biggest airports, and the tension between cheap air travel and heavy environmental costs and between airport expansion and the human rights of those living below flight paths. At some point, the government will have to face up to the conflicts. None of this, though, need or should stop the Competition Commission from easing the misery of the 67m passengers doomed to pass every year through Heathrow.

philip.stephens@ft.com

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