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Friday, 25 April 2014

Lack of slack

Heathrow needs decisive capacity fix

Heathrow spent more than 36 million pounds on improving its snow defences after the chaos in 2010. The result? More bad publicity for London’s hub airport when this winter’s first blizzards hit. Heathrow’s operational upgrades have failed to address the fundamental problems it faces.

The latest debacle - with pictures of stranded passengers sleeping on terminal floors - underscore Heathrow’s core difficulty. The airport normally runs at near-full capacity. So there is no slack when things go wrong.

Two years ago, Heathrow struggled to clear snow from runways while its airlines had difficulties de-icing planes. This time, investment in advanced snow ploughs helped keep the airport operational. But there were still problems with de-icing the planes. Critically, there were cancellations because poor visibility necessitates greater intervals between flights. With no extra runway capacity, Heathrow’s only option was to ground flights.

The best way of managing this problem would be to lower customer expectations. The message would have to be conveyed loud and clear. The price of running lots of flights in “ordinary” weather is inevitable disruption when snow hits. Unfortunately, Heathrow’s recent investment has only raised expectations. Even when passengers were forewarned of cancellations this weekend, many still turned up hoping for the best or at least seeking - quite rationally - to grab pole position in the queue when flights resumed.

A second solution is to build a third runway while exercising the discipline to utilise only some of the extra capacity to meet day-to-day demand. But the current government has blocked the idea of extending the west London site, although it faces continued pressure from the business lobby to change tack.

The radical option is to operate the existing infrastructure at lower capacity. This would give Heathrow a cushion against disruptive events. True, it would risk a damaging knock-on effect for London and the UK economy. But the severity of that outcome would depend on whether passengers modified their behaviour and used London’s other less-crowded airports. Public policy could play a role in improving the local alternatives. The business impact on Heathrow, meanwhile, could be mitigated by charging airlines more.

It’s hardly an attractive solution - but it is the most economically realistic.

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Context News

London’s Heathrow airport cancelled 10 percent of flights on Jan. 21, a day after it cut its capacity by a fifth, and said services could face further delays with more snowfall expected.

Heathrow, Europe’s busiest airport, said it had cut around 130 flights - most operated by IAG’S British Airways - from its schedule on Jan. 21 to allow more space between aircraft because of low visibility.

The airport scrapped some 250 flights on Jan. 20 and said the decision had helped it operate smoothly.

Ferrovial’s Heathrow has spent 36 million pounds ($57 million) on upgrading its winter weather equipment since 2010 - a year that saw it face heavy criticism after it almost shut down when snow hit just before Christmas. It now has 130 snow-clearing vehicles.

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