Airlines ask BAA to cut back on Gatwick improvements

26.5.2009   (Guardian)

by Dan Milmo, Transport Corrrespondent

With passenger numbers dwindling and a new owner due soon, the airport’s carriers
are concerned that they will be stuck with a £900m bill

EasyJet is one of the airlines that has urged BAA to cut back work on its £900
improvement scheme at Gatwick airport

 British Airways, easyJet and Ryanair have urged BAA to cut back work on its £900m improvement scheme at Gatwick airport after warning
that the project is futile in the face of dwindling passenger numbers.

Airlines have demanded curbs in the programme because they will ultimately have
to pass on the costs to
recession-hit passengers through fare increases.

In a letter to BAA executives at Gatwick, seen by the Guardian, the airport’s
airline customers said the business case for funnelling hundreds of millions of
pounds into new facilities was “unproven”. Gatwick, which handles 34 million passengers
a year, has seen
traffic fall by 12% since the beginning of the year.

“At this time, when all the Gatwick airlines are facing a level of unprecedented
commercial challenge, the airport is seeing dramatically reduced passenger throughput
and many analysts are forecasting a slow recovery, it would not be sensible to
proceed without a proven business case,” said the committee.

BAA intends to spend £900m on the airport over the next five years.   The airlines’
letter suggested that a new owner may have cheaper investment plans.   “It would
therefore be pointless to come to a decision about future developments which are
not agreed with the future owner of the airport.”

Gatwick’s buyer will be confronted by an airline campaign to shelve a £200m aircraft
pier in the north terminal. A Gatwick spokesman said the pier was needed to reach
a target of transferring 95% of passengers to aircraft via piers instead of coaches.
“It’s what passengers want,” he said. “They don’t want to be coached in from a
remote stand.”

The dispute came as one of the front runners to acquire Britain’s second- ­largest
airport, Manchester Airports Group, pledged shorter security queues and uncluttered
terminals if it acquires Gatwick. “We would have a very different approach and
our approach is designed with the passenger at the core of what we do,” said Geoff
Muirhead, MAG chief executive.

Resolving the conflict over the pier will be one of the first tasks facing MAG
if it wins the
Gatwick auction in a consortium with the Canadian infrastructure investor Borealis.     MAG is
owned by Manchester’s local authorities and is favourite to acquire the airport
because the only other bidder, Global Infrastructure Partners, is considering whether to continue work on its
.    MAG is expected to submit its final offer in the next three weeks and both suitors
value the business at about £1.4bn.

MAG is the largest UK-owned airports group, carrying more than 28 million passengers
a year through its ownership of Manchester, East Midlands, Humberside and Bournemouth
airports but far behind Spanish-controlled BAA, whose seven UK airports handled
145.8 million customers last year.

MAG has been criticised by passengers for charging £1 for plastic bags to carry
liquids through security gates and the airport’s chief executive refused to rule
out extending the regime to Gatwick, one of the world’s busiest single-runway

“People need to take responsibility for that themselves,” said Muirhead. “You
should sort yourself out before you get here.   In the more than two years that
this has been in place we have given out for free 4m bags.   Two years is long
enough for people to understand.”

Muirhead also backed schemes introduced by Luton and Liverpool airports that
charge passengers £3 to be fast-tracked through security.   The MAG boss said the
concept was acceptable so long as ordinary queues were not made longer in order
to force customers to shell out £3 to make their flight.

“There is nothing wrong in that so long as you don’t go out of your way to make
queues longer.    If you have fewer security guards on the free queue that’s not
where we want to be.”

It is understood that MAG has no immediate plans to develop a second runway at Gatwick because of an agreement that the airport cannot be expanded before 2019.   The
Conservative Party, far ahead of Labour in the polls, has also pledged to block
any attempt to build a new landing strip at the airport.

A BAA spokesman said: “MAG is right to put the customers first.   Putting the
customer first is the only way that any airport operator will survive.”