Page last updated at 15:45 GMT, Thursday, 28 February 2008

Heathrow, ready for take-off?

By Rebecca Opstad
BBC Money Programme

Heathrow terminal 5 (pic: BAA)
BA will be the first airline to benefit from Heathrow's facelift

It has taken 4.3bn, 60,000 workers and 6 years to build. Now Terminal 5 at Heathrow is less than a month away from its opening by the Queen.

For the airport's owner, BAA, it is much more than a building. It hopes this will be the proof it needs to convince the world that BAA is capable of turning Heathrow around.

The stakes are high for BAA.

It currently owns seven UK airports, including Gatwick, Stansted and the gateway hub to the country, Heathrow.

But it has been under a barrage of criticism from all sides, with passengers, airlines, and businesses all attacking BAA for poor performance.

Critics are calling for the break-up of BAA's monopoly in the South East, and it is currently being investigated by the Competition Commission, who has the power to do exactly that.

Facelift needed

At a time when BAA is also lobbying for a third runway at Heathrow, the next year will be critical for BAA and the future of its airports.

1985 - Planning for Terminal 5 begins
1989 - Design competition for Terminal 5 is won by Richard Rogers Partnership
1993 - on 17 February, BAA submits a planning application
1995 - on 16 May, the Terminal 5 Public Inquiry begins
1999 - The Terminal 5 Public Inquiry finishes on 17 March- making it the longest inquiry in UK history
2001 - on 20 November, the secretary of state for Transport grants planning consent for Terminal 5
2002 - Construction begins
2008 - Terminal opens

That is why Terminal 5 and its success is so important for the company.

Terminal 5's importance to passengers is also clear.

For the 68 million people a year who travel through Heathrow, improvements feel long overdue.

The state of Heathrow has become infamous, with repeated problems with security queues, baggage, transit, and cleanliness.

No-one is disputing that Heathrow needs a facelift, and BAA say that starts with Terminal 5.

As Mark Bullock, managing director of Heathrow says: "For us T5 is not the end of the journey, it's the beginning of a new transformed Heathrow."

Long term vision

After more than 15 years in the making, the brand new terminal will open on time and on budget, and expects to see 30 million passengers through its doors a year.

Decisions about infrastructure projects are deeply embedded in history

Terminal 5 is exclusively for British Airways, and chief executive Willie Walsh says it 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 says.

"I think people will be genuinely impressed, in fact they will be wowed, when they walk in the door of T5."

As well as an improved, bigger and cleaner space, Terminal 5 has more than 11 miles of baggage conveyer belt, and retail that includes Harrods and Tiffany & Co.'s.

But with just one airline getting the privilege of this "new face of Heathrow", what if you're one of the millions of other passengers still braving the other four terminals?

Chief executive of BAA, Stephen Nelson, stresses that BAA plans to invest billions of pounds improving the rest of the airport.

"By 2012, something like 65 to 70% of passengers will be travelling through terminal facilities which are not yet open," he says.

"I think that's a very exciting vision, but regrettably it takes time and we can't do that overnight."

Momentous occasion

But BAA does not want to stop there.

Heathrow terminal 5
Terminal 5's systems are built to improve efficiency

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

The two existing runways are full, meaning that the slightest disruption can cause chaos.

BAA argues that to really improve performance, it is additional runway space that is needed.

The business community agrees. The CBI argues strongly for a third runway, claiming it is essential to the UK economy.

But plans for a third runway are running into fierce opposition.

Not least from the residents of Sipson, whose homes and school would be flattened.

Some 700 homes would have to be removed for the runway itself, and thousands of homes in London would be affected by overhead plane noise for the first time.

As well as these local issues, it is also the wider impact on the environment that opponents of expansion say we cannot ignore.

Paul Ekins, Professor of Energy & Environment at King's College London, strongly opposes a third runway at Heathrow.

"The one thing we should not be doing is building long lasting new infrastructure that will lock us into high levels of carbon emissions in the future and that is what the third runway is par excellence," he says.

Whether or not the third runway is given the go-ahead will shape the future of Heathrow.

But the future of BAA is also in the hands of the Competition Commission, which will report on its market investigation later this year.

The opening of Terminal 5 in March will be a momentous one for BAA, but it is also just the beginning of a critical time for the company and all its UK airports.

The Money Programme: Heathrow, ready for take-off? BBC2 at 1900 on Friday 29 February.


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