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Heathrow's Collapse Is Traced to Privatization
Mon, 12/27/2010 - 16:45
Why did Heathrow Airport near London come to a standstill last week after a few inches of snow? How difficult can it be to keep a few runways clear, remove snow from the gate areas, and de-ice planes? Scores of airports in snowy regions around the world do it all the time.
Clive Irving, a senior consulting editor at Conde Nast Traveler, specializing in aviation, offers a persuasive explanation for the Heathrow debacle: the privatization of airport management. Writing at The Daily Beast, “The Secret Behind the Travel Mayhem,” Irving argues that “the fundamental reason for this failure is hiding in plain sight” – the transformation of publicly managed airports into privately managed shopping malls:
"The most telling clue lies in Terminal Five, which was purpose-built for British Airways. What do you see once you check-in? Not an airport terminal, but a shopping mall. There are two enormous floors with scores of stores, ranging from luxury franchises to electronics, Scottish whiskey and perfumes—as many perfume counters as you could imagine under one roof.
"This happened because in the late 1980s the Brits realized that an airport could be an entirely new kind of profit center. What began as a so-called duty-free opportunity, a few stores selling highly taxed items like whiskey and cigarettes, suddenly expanded into a shopper’s honey trap, a perfect place for merchandise with its own captive audience, bored people waiting for a flight. The management of British airports was privatized and turned over to a company called the British Airports Authority—a name implying that it was a professional aviation manager and not, as it became by stealth, a business dominated by marketers.
"Suddenly, every terminal at the two main London airports, Heathrow and Gatwick, was remodeled around the shopping mall. The airports were, in effect, re-purposed, and the actual management and running of a business centered on flying people rather than selling to them became secondary. In fact, this model became so lucrative that it was followed by other airports around the world—but never in a way that so strikingly distorted the management priorities."
Irving proceeds to explain how an ambitious Spanish company specializing in building highways decided to buy control of British Airports Authority in 2006:
Then the problems really began. Passengers complained of poor maintenance, filthy toilets, chaotic security lines, and poor communications. The full realization of what Ferrovial was up to came in March, 2008, with the opening of Terminal 5. This supposed state-of-the art building, long delayed because of planning problems, was the scene of embarrassing systems failures in its first weeks—thousands of bags were lost, flights were delayed or canceled, and it became an infamous public-relations disaster for British Airways.
More thought had gone into burnishing the shopping mall, and providing top-end restaurant franchises, than in actually making sure that passengers would have a seamless experience from check-in to the gate.
The collapse of air travel at Heathrow – a major hub serving Europe and other international destinations – meant that the whole air transport system experienced serious disruptions. In a networked environment, the bad fruit of privatization goes viral.
Heathrow has long been renowned by international travelers as an airport to avoid. Will last week's Christmas snow debacle finally jolt British authorities into doing something….like reclaiming control from inept free-marketeers?
Update: Will Hutton, a columnist for The Guardian (London), elaborates on Heathrow's ownership structure in "Heathrow's Chaos is Indicative of a Wider National Malaise." (Thanks, Hilary Wainwright!)