Page last updated at 20:26 GMT, Thursday, 27 March 2008

T5's importance to BA and BAA

By Simon Atkinson
Business reporter, BBC News

Heathrow Terminal 5
British Airways will move most of its flights over the next year
With its 30,000 square metres of glass and 80,000 tonnes of steel, Heathrow Airport's Terminal 5 is Europe's largest free-standing structure, taking about 60,000 workers more than six years to build.

With outlets from Boots to Harrods and a Gordon Ramsay restaurant, it had been hailed as helping put glamour back into air travel.

But for its sole resident, British Airways, and the airport's owner BAA, the 4.3bn project is far more than a building.

BA's boss Willie Walsh has said that the terminal will completely change his passengers' experience.

"For the first time in about 40 years we will be able to bring most of our operations under one roof at Heathrow and it really will transform the customer experience," he told the BBC last month.

But its reputation is already in danger of being seriously tarnished.

'Ultimate humiliation'

BA has blamed the glitches on problems with "staff familiarisation" at the terminal, which includes a state-of-the-art baggage handling system (containing 18km of belts and capable of transporting 12,000 bags per hour).

Terminal 5 was supposed to be starting afresh, and leaving behind the woes of those other terminals
Jamie Bowden
Aviation expert

And it has pointed out that 34 flights which it has had to cancel on the opening day represented just under 10% of those scheduled to leave the terminal.

But passengers with check-in luggage being told to seek a refund or rebook to later flights was "the ultimate humiliation" for BA, said aviation expert Jamie Bowden.

27 March: Domestic and most European flights move from Terminal 1 to T5
27 March: Long-haul flights from Terminal 1 move to T5
27 March: Miami service moves from Terminal 3 to T5
30 March: Algiers moves from Gatwick to T5
30 April: All Terminal 4 long-haul go to T5 (except Singapore, Bangkok and Sydney)
17 Sept: Barcelona, Madrid, Lisbon, Nice and Helsinki move from Terminal 1 to Terminal 3
Early 2009: Singapore, Bangkok and Sydney move from Terminal 4 to Terminal 3
Source: BA

And he added that news that Heathrow's Terminal 1 and Terminal 4 were operating as normal was "the worst case scenario".

"Terminal 5 was supposed to be starting afresh, and leaving behind the woes of those other terminals," he said.

"Instead you've got BA's director of operation having to make an apology to its customers, which is clearly embarrassing."

On the shiny new floors of the building, passengers who remained in the dark about whether their planes were going to take off complained that the media were being briefed before them.

"I'm not impressed by how they're handling this," one told the BBC.

"When I booked the flight I didn't know it would be the first day of the new terminal but when I found out I had a chuckle.

"I knew that, this being Britain, it would be chaotic."

New runway?

For Spanish-owned BAA meanwhile - massively in debt - Terminal 5 is arguably key to its future.

The operator has been under a barrage of criticism, with passengers, airlines, and businesses all attacking the airport operator for poor performance.

Its critics are calling for the break-up of BAA's monopoly in the South East (Gatwick and Stansted are among the seven airports it owns).

And it is currently being investigated by the Competition Commission, which has the power to do exactly that.

Given the scale of the challenge over the last 48 hours, it was inevitable that we would face some difficulties
BAA statement

So BAA is hoping that the terminal will be proof that it can turn around the Heathrow experience for the 68 million passengers a year who use it.

And then there is the impact on its balance sheets.

Although Terminal 5 provides much-needed extra passenger capacity, it does not increase the number of flights.

But most expect that the next step will be a further runway at Heathrow, the airport's third.

If this goes ahead - and there have been hints that the government is keen - then this will create more flights, more passengers, and of course more revenue.

"Given the scale of the challenge over the last 48 hours, it was inevitable that we would face some difficulties," BAA said.

Difficulties which it, BA, and passengers, hope will soon be behind them.

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