Investment Markets » Transport
Should The Airport Monopoly Be Smashed?
The Competition Commission is investigating whether BAA should be broken up. Are Britain's airports really so bad?
Heathrow bashing has long been an English pastime but it has gained a new shrillness of late. The Daily Telegraph claims, preposterously, that using the airport is more stressful than being mugged at knifepoint; Ken Livingstone accuses it of keeping people almost "as prisoner" in its "ghastly shopping mall"; and even the level-headed City minister Kitty Ussher warns that "Heathrow hassle" is damaging Britain's competitiveness.
Yet although the Heathrow experience has never been particularly good, it is improving: the Civil Aviation Authority reports that security queues are getting shorter.
Much of the fuss may be down to jingoism following the buyout of BAA, which controls six other airports including Gatwick and Stansted, by the Spanish group Ferrovial last year. But some concerns are justified. Ferrovial borrowed heavily to finance the deal; if it has to pinch pennies to repay the loans, investment may be delayed.
Capital spending on Heathrow has fallen 15% since Ferrovial took over. Even so, the vitriol is overdone. Much of the denigration comes from airlines who stand to profit from BAA's break-up, but bogus stories of chaos also play into the Government's hands. If flying is judged intolerable, then ministers have a ready-made justification for their crazy expansion programme.
The excuse is that Britain's prosperity depends on flying and the ability to offer a shiny international hub. Yet this merely reflects a wider delusion about the role and capacity of a small country.
Flying is not shameful or sinful, as the Bishop of London has implied. There is simply too much of it and the trend needs to change. If exaggerated rage about the misery of Heathrow was refocused on the hellish future of our railways, where subsides are due to be cut, it would be a useful start.
The importance of Heathrow as the gateway to the uncontested financial capital of Europe cannot be exaggerated, and it is nonsense to suggest that the airport is anything but a disgrace. In a recent survey of passenger satisfaction, it came a shocking 56th out of 58 airports.
Matters will be eased by the opening of Terminal 5 but BAA's real problem is poor management and a corporate culture that sees nothing wrong with treating passengers like cattle.
It was one of the Thatcher Government's great mistakes to privatise BAA as a single entity rather than sell the airports separately. Time, now, to rectify this error.
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