How Heathrow became Hell on EarthMay 30, 2012: 7:13 AM ET
Lines at London's major airport are longer than they've ever been, embarrassing the country just three months before the Olympics.
By Katherine Ryder, contributor
FORTUNE -- On May 15, the British Parliament held a meeting about Heathrow's border control problem, in a gilded room with oriental rugs and chairs emblazoned with the crown. Here is the opening question, posed by the chair of the Home Affairs Committee: "Is this a recent phenomenon, or has it been going on for some time?" The response, from Virgin Atlantic's Director of Operations: "This has been a concern to us and our passengers for a few years now, Mr. Chairman."
Could Jon Stewart please come forward? Where is his British equivalent?
In the U.K., Heathrow-bashing is as common as commenting on the weather. The daily tabloids have made an art out of writing "Hell at Heathrow" headlines. Former mayor Ken Livingston famously commented in 2007 that Heathrow was keeping its passengers "prisoners." Much of the anger, traditionally, has been directed at BAA, Heathrow's private owner, for not modernizing fast enough. Now, faced with three-hour immigration lines, BAA is pointing its finger at the government, blaming recent budget cuts and strict passport controls for the nuisance the airport commonly causes passengers.
Although one might assume that BAA and the government would have interests in cooperating -- a well-run Heathrow benefits BAA as well as the United Kingdom's economy -- the politics of responsibility has created a nasty blame game between the private company and members of the government. Last month BAA even-handed out leaflets at passport control deflecting responsibility and encouraging passengers to complain. The fight is on, three months ahead of the Olympics, to the dismay of Prime Minster David Cameron and London Mayor Boris Johnson. And the dirty secret is that frustrated travelers shouldn't expect a resolution any time soon.
The "Heathrow problem" has been scrutinized for at least a decade. When London won its bid for the Olympics in 2005, BAA produced a plan to modernize Heathrow, though even at the time the press roundly doubted it. The airport was bursting at the seams and BA strikes were common. Today, even with the opening of a fifth terminal in 2008, the airport's two runways still operate at 99.2% capacity.
Beyond the recent chaos at immigration, the issue lurking in the background is whether BAA should build a third runway to alleviate capacity concerns. The company has been lobbying the government for years, to no avail. Although BAA, which is owned by the Spanish transport group Ferrovial, posted a 15% rise in first-quarter profit this year, the company's CFO says that real growth won't be achieved unless Heathrow adds the extra runway.
That's not a surprising stance, given that an airport makes the bulk of its money from charging airlines landing fees. A third runway would increase its profits considerably, and at a time when Ferrovial, which owned all seven major British airports as recently as four years ago, has been forced to sell three of them by Britain's competition regulator.
The British government, however, cites environmental concerns and has not backed down in its opposition to the plan. London is already served by six commercial airports, policymakers argue, so why does the city need more airplane traffic, and subsequently more carbon emissions? This week London mayor Boris Johnson, who is one of the biggest critics of the plan, continued to ignite the debate with a dramatic speech that concluded, "It is not deliverable now or in the future. It is dead, it is over, move on."
The latest round of recriminations about the immigration queues come as both sides are publishing reports for or against the proposed runway. The government claims it needs to balance the needs of the economy and the environment against BAA's commercial needs. BAA claims that Britain will lose 14 billion pounds (about $22 billion) worth of trade over the next ten years if Heathrow doesn't build more runways to support growth in air travel routes to emerging markets. The government says that it might build a new airport instead.
For months, BAA has been threatening to take legal action if the government continues to reject the idea of expanding Heathrow. Last week, the government acknowledged that it would listen to another round of presentations by BAA about noise reduction to residents (one could call them voters) and the importance of the third runway. Analysts, however, are saying that a definitive answer could be pushed off as late as 2015, when the next general election takes place.
Even if BAA gets approval, the company itself estimates that a new runway will take six to 10 years to open. And in the meantime? First, travelers coming to Heathrow during the Olympics might still experience significant waiting times, even despite the 475 extra staff, and special lanes for athletes, that the government has promised. But the greater question, perhaps, is what will happen after the Games.
Over the past decade, air travel has turned into a fraught experience for the passenger, a costly affair for struggling European and American airlines and, in the case of BAA, a hostile political negotiation with the government. Given that, in aviation, the needs of governments -- e.g., for security—trump commercial efficiency, the current problem looks here to stay, either until more airports are built, Heathrow expands, or someone develops foolproof biometric technology to make security dramatically more efficient.
Many experts believe that Heathrow will get its third runway -- particularly as the pleas from business leaders grow more intense. But the queues at immigration seem unlikely to ease in the immediate future. Judging by the government's probing inquiries into the matter -- and its stretched purse strings -- best to expect nothing less.