London Area Airports | LCY/LGW/LHR/LTN/SEN/STN

Stansted runway setback for BAA
Dominic O'Connell
15 May 2005
The Sunday Times

THE airport operator BAA has suffered a setback in its plans for a second runway at Stansted, Essex, with the regulator saying it will look again at how much the company is allowed to spend on preparatory work, writes Dominic O'Connell.

BAA was given the green light to spend Pounds 105m on planning for the runway, with half of this sum earmarked to buy affected houses. But earlier this year the Civil Aviation Authority, which regulates BAA's spending, said it had withdrawn its approval.

Now the watchdog has decided it will hold a new consultation process, which could take six months. The CAA said it wanted to "avoid the risk that it has not properly captured the views of all interested parties".

The move is a victory for airlines at Stansted, which say BAA's plans for a new runway and terminal are too expensive and will drive up charges.

BAA said that it was committed to the spending. The company will report its full-year results on Tuesday, when it is expected to reveal that profits at Stansted have risen from Pounds 39m to about Pounds 55m.

BAA: Runway May Face More Delays Without Other Rev
18 May 2005

(This updates an item timed around 1138 GMT with reaction from airlines.)

LONDON (Dow Jones)--BAA PLC (BAA.LN) said Wednesday that a second runway at Stansted can't be built within the U.K. government's envisaged timeframe and warned that a further delay may occur if the airline industry regulator opposes its preferred way of financing the project.

Due to its complexity and planning issues, BAA said the runway project had moved at a slower pace than originally expected and 2013 is now the earliest completion date. The government's 2003 Air Transport White Paper envisaged that a second runway be built at Stansted in southern England by 2011-2012, followed by a third at London's Heathrow by 2015-2020.

Mike Toms, BAA's planning and regulatory affairs director, said on a conference call that the runway couldn't be built economically by 2013 if it's solely financed by Stansted airport revenue. He said there could be a delay of "several" years beyond 2013 if this was the case. The second runway and all associated developments could ultimately cost about GBP4 billion.

Arguing that the second runway will have economic benefits to southeast England, BAA will lobby the regulator, the Civil Aviation Authority,to allow the project to be broadly financed with revenues from Heathrow and Gatwick airports, as well as Stansted. BAA wants to take about a GBP0.50-GBP1 levy from passengers passing through Heathrow and Gatwick. The regulated average passenger charge at Stansted is now GBP3 but this will rise to about GBP5 in April 2007.

Assuming it can be broadlyfinanced then the runway would be economical to build, added BAA Chief Executive Mike Clasper. "I am very confident we will be building a new runway at Stansted," he said.

But airlines using BAA's airports criticized its proposed methods of financing Stansted's second runway.

"This is totally outrageous and we will fight this proposal tooth and nail," said long-haul specialist Virgin Atlantic Airways, which uses both Heathrow and Gatwick. "We remain totally opposed to cross-subsidization between London airports. We look to the independent regulator to maintain its current position that those who should benefit from Stansted should pay for its development."

Virgin Atlantic is owned by Richard Branson's Virgin Group (VGN.YY) and Singapore Airways (S55.SG).

In a joint statement, rival low-cost carriers Ryanair Holdings PLC (RYAAY) and easyJet PLC (EZJ.LN) - which operate out of Stansted and Gatwick - said they will call on the CAA to force BAA to scale back its plans for the Stansted expansion.

"Today it (BAA) has added insult to injury with its plans to fleece up to GBP1 from passengers at Heathrow and Gatwick to pay for the development of Stansted," said easyJet Chief Operating Officer Ed Winter.

Ryanair and other carriers have argued that the envisaged development plans for Stansted's expansion are way too ambitious and pricey and will lead to higher airport charges.

BAA is the U.K.'s major airport company, owning Stansted, Heathrow and Gatwick, among others.

BAA expects to publish its detailed plan for the second runway in Spring 2006. It has said the runway would only be built if it brings the desired returns for its shareholders.

Additional runway capacity is considered vital by the government as a means of reducing congestion among the main airports serving London. Stansted, to the north of the capital, is a key airport for low-cost carriers.

BAA officials are Wednesday meeting various stakeholders in the second runway. Residents living close to the airport raised a legal challenge to the government's White Paper in an effort to stop the airport's expansion.

In February, the U.K. High Court backed plans to build a second runway at Stansted but ruled that BAA needed to make further consultations on the location of the runway.

BAA profit soars on high passenger traffic and shopping

LONDON, May 17 (AFP) - British airports operator BAA reported on Tuesday a 36-percent rise in annual pre-tax profits, helped by a record high number of passengers that thronged its shops before boarding planes.

Group pre-tax profit jumped to 733 million pounds (1.065 billion euros, 1.347 billion dollars) in the year ending March 31, 2005 compared with 539 million pounds during the same period a year earlier.

The figure was inflated by an exceptional gain of 112 million pounds from property transactions.

Excluding the exceptional gain, but including reorganisation costs, pre-tax profit rose 18.8 percent to 637 million pounds compared with analysts' consensus forecasts of 618 million.

Across BAA's seven airports, passenger traffic rose 6.3 percent to a record 141.7 million in the 12 months ending March.

Turnover jumped 7.4 percent to 2.115 billion pounds and net retail income climbed 7.3-percent to 588 million pounds.

"Great retail performance, in spite of adverse conditions, smart use and development of assets and improved customer service, all supported by a strong focus on innovation, have driven our operational performance," BAA chief executive Mike Clasper said in a statement accompanying the results.

"We have also delivered an exceptional property related profit of 112 million pounds thanks to our property management and transaction skills."

Clasper said he had confidence that BAA could sustain growth, creating "a robust financial performance for 2005/06".

BAA's share price gained 1.58 percent to 612.5 pence in early afternoon London trading, while the capital's FTSE 100 index of leading shares was flat at 4,883.50 points.

At BAA's London Gatwick airport, annual passenger traffic rose 6.5 percent to 32 million, the first time it had risen above the level seen prior to the terrorist attacks in the United States on September 11, 2001.

At Heathrow, passenger traffic grew 5.3 percent to 67.7 million, which BAA said was in large part owing to faster check-in times that gave passengers greater time to buy goods before boarding.

"BAA has commenced the implementation of a significant reorganisation programme designed to ensure the group improves its focus on customers and operational effectiveness and efficiency," the group said Tuesday.

Stansted subsidy plan angers airlines
By KEVIN DONE
19 May 2005
Financial Times

BAA, the airports group, has warned that the building of a second runway at London Stansted airport would be delayed for at least a year to 2013 and said landing charges would have to be more than doubled to finance the project.

Even 2013 could be achieved only if the project were subsidised by increases in airline user charges at London Heathrow and Gatwick airports, said Mike Clasper, BAA chief executive. Otherwise the Pounds 4bn Stansted project would have to be delayed for "several years", he said.

Airlines using all three of BAA's London airports reacted angrily to the plans for higher landing fees.

Sir Richard Branson's Virgin Atlantic said: "This is totally outrageous and we will fight this proposal tooth and nail."

Ed Winter, EasyJet chief operating officer and chairman of the Stansted airport consultative committee, said: "BAA has today announced the great consumer rip-off and it should send a shiver down the spine of every airline passenger in the UK. It is planning to build a folly on the grandest scale, that is unnecessary and unwanted."

Virgin Atlantic said: "There is no way our passengers at Heathrow or Gatwick should subsidise those of Ryanair and other operators at Stansted. We remain totally opposed to cross-subsidisation between London airports.

"We look to the independent regulator, the Civil Aviation Authority, to maintain its position that those who would benefit from Stansted should pay for its development."

Cross-subsidisation would fly in the face of the principle of "stand-alone" economic regulation of Heathrow, Gatwick and Stansted, established by the CAA for the present price cap regime running from 2003-08.

The BAA proposals for higher charges at all three airports to finance the Stansted expansion appear certain to provoke a row this year when the CAA starts negotiations with the airlines and BAA on the next pricing regime for 2008-13.

Delays in the Stansted project would undermine the the government's aviation policy. A white paper published in December 2003 called for the biggest expansion of airport capacity in 50 years.

Alistair Darling, transport secretary, gave strong support for the building of two runways in south-east England, the first at Stansted airport by 2011-12, and the second at Heathrow by 2015-20, provided they could meet tough environmental conditions.

The CAA said two years ago that it would only depart from its policy for stand-alone financing of the London airports for "compelling reasons".

Mr Clasper yesterday fired the first shots in the airport group's campaign to convince the regulator that some cross-subsidisation was vital in the interests both of the national economy and the consumer.

Terminal to relieve passenger chaos at Heathrow airport
20 May 2005
The Australian

SOME 30km west of London the largest current building project in Europe is half complete, on budget, on time and preparing to ease the lives of the travelling public.

Heathrow Terminal 5 will be British Airways' gateway to the world, a single complex offering all its customers a straightforward path to and from their aircraft instead of the confusing routes in existing Terminals 1, 2 and 3.

It will also spare connecting passengers the headaches of changing terminals.

BA hopes the new terminal will enable Heathrow to challenge Amsterdam Schiphol and Paris Charles de Gaulle -- airports that have been successful in siphoning UK interline traffic away from London with their quicker connections.

Most of BA's Oneworld partners are also likely to use the terminal and pick up extra business.

The terminal will increase Heathrow's capacity to 90 million passengers a year, compared with the 72 million who passed through the world's busiest international airport last year.

Passengers will still have to wait until the northern spring of 2008 to use it -- but that is a short time compared with the 20 years of political and planning wrangles that preceded its construction.

Heathrow will get a properly integrated railway station, with six platforms under the terminal: two for the Piccadilly Line, two for the Heathrow Express to Paddington and a pair to safeguard capacity for future rail links to the west.

While those who use the M25 ring road may curse the current problems caused by road-widening work, access to T5 should be easy, with no narrow tunnel to pass through or long drive, such as that from the motorway system to Terminal 4.

Although 4000 car parking places are being provided, the British Airports Authority, which operates the airport, says it expects half the surface journeys to and from T5 to be by public transport.

The journey through the terminal should also be more straightforward for passengers.

After checking in, mostly at self-service machines with e-tickets, they will pass immediately through security. They will also be able to see where they are going so that the route through the terminal will be more intuitive. After trooping off an aircraft, the arrivals hall will be visible, even if some distance away.

Some gates are being designed to accommodate aircraft of the future like the Airbus A380 superjumbo. The terminal itself is jumbo in size, occupying a site the size of Hyde Park, with the main concourse 396m long, 39m tall and 176m wide.

There are two terminals under construction, the main building plus satellite B connected by an underground people mover.

Much of the below-ground work is also being constructed for satellite C, expected to come on stream in 2112. A further satellite, D, is also earmarked for future development.

Another benefit for British Airways is a consolidated baggage system which will not only handle items within T5 but those from the four other Heathrow terminals and those transferred from Gatwick.

To assist in the management of different bag routeings a computerised itinerary is developed for each item, which is controlled throughout its journey to the aircraft, including details of flight delays.

French group Accor has won the race to operate the new flagship hotel at T5 under its Sofitel brand. The five-star property, connected by walkways to the terminal, will also open in the spring of 2008 and will be the icing on the cake.

Pro-expansion group to intensify Heathrow runway conflict
By KEVIN DONE
23 May 2005
Financial Times

The conflict over long-term plans to build a third runway at Heathrow, already the world's busiest international airport, will intensify today with the launch of a pro-expansion lobby group, Future Heathrow.

The campaign is to be led by Clive Soley, the former west London Labour MP and a former chairman of the parliamentary Labour party, who stepped down at the general election and was awarded a peerage a few days later.

Its launch follows doubts last week over the economic case for building a second runway at London Stansted airport: the government's favoured first move for expanding airport capacity in the highly congested south-east of England.

The lobby group has been formed by UK and foreign airlines operating at Heathrow including British Airways, Virgin Atlantic and BMI British Midland, and business and labour groups including the CBI, the London Chamber of Commerce, three leading trades unions - Amicus, the GMB and the TGWU - as well as the TUC.

The Future Heathrow initiative was attacked yesterday by environmental and local residents groups, which disputed that without a third runway and a sixth terminal the future of the airport was threatened by continental European hubs led by Paris Charles de Gaulle and Frankfurt.

The government white paper on aviation policy, published in December 2003, called for the building of a third runway at Heathrow between 2015 and 2020, but only if it could meet tough environmental conditions: in particular one on air quality, which will become mandatory under a European directive that comes into force in 2010.

However, the Heathrow area already fails to meet the 2010 air quality targets; much of the pollution is caused by surface transport using the nearby M25 and M4 motorways.

Richard Dyer of Friends of the Earth said that by leading the campaign, Lord Soley had "abandoned his commitment to a more sustainable aviation policy and the health interests of his former constituents".

"We simply cannot allow any new runways in Europe if we are serious about tackling climate change."

Nuclear threat over runway decision
JEREMY WARNER
3 June 2005
The Independent

On a junket with journalists to China this week, Martin Broughton, chairman of British Airways, has threatened the airports authority, BAA, with "the nuclear option" in the ongoing row about where to site a new runway for London and how to pay for it. The nuclear option so threatened seems to amount to BA throwing its lot in with Michael O"Leary of Ryanair in lobbying for a break-up of BAA. This would indeed be an unholy alliance of nuclear powers, for the two airlines" reasons for opposing BAA"s plans are poles apart.

Just to recap, the Government is proposing that the new runway be sited at Standsted, north-east of London. Ryanair reckons it is already being overcharged by BAA for use of Stansted and refuses to be railroaded into helping to fund a second runway. It is already actively lobbying to have BAA broken up. Now even British Airways is threatening to get confrontational, but for entirely different reasons.

Last month BAA bit the bullet and admitted what had been obvious all along " that there was no chance of building the runway and associated facilities by the planned date of 2011, unless it is cross-subsidised by passengers at Heathrow and Gatwick. This might suit Mr O"Leary, but it is anathema to Heathrow-based airlines such as British Airways. Hence the threatened nuclear option.

It"s all very well making threats, but in the end it will be the Government that decides all three of these matters " where the runway is sited, who pays for it, and whether BAA ought to be broken up. The commercial case for siting the new facility at Heathrow is still overwhelming, as this is where international travellers most want to arrive and depart from and where they are most likely to want to pay for the privilege.

The reasons for opting for Stansted are largely environmental and political. Heathrow and its environs already seem too crowded to take another runway, whereas Stansted is in the midst of purest green countryside. The fact that Stansted is also staunchly Tory country, whereas the flight path to Heathrow contains some key marginals, is by the by.

By seeking ways to meet the Government"s preferred solution, BAA has put itself on a collision course with all its major customers. Mike Clasper, chief executive of BAA, finds himself caught between a rock and a hard place. The only thing guaranteed to release him would be a Government u-turn in favour of a third runway at Heathrow, in which case from Richmond to Henley, the angry mob would march on Westminster. Not everyone can win in this battle of the runways.

Heathrow growth plans published


Draft expansion plans which could see a third runway and a sixth terminal at Heathrow Airport have been published.

About £7bn would be spent over the next decade, building Terminal Five and upgrading the west London airport.

Proposals earmark land for growth, including a boundary for another runway and terminal, which would require the demolition of 700 about homes.

BAA Heathrow says the plans are not set in stone, but opponents say it will increase noise and pollution.

A fifth terminal at Heathrow, with an overall budget of £4.2bn, is due to open in 2008.

But BAA Heathrow says it still needs to modernise to meet growing demand for flights in the South East and believes there is a "strong economic case" for a sixth terminal.

Expansion plans could see the annual number of passengers could rise from 67m to 116m in 2030.

The government has said a new runway and another terminal could be built at the airport - but first it has to meet environmental targets.

Mick Temple, BAA Heathrow managing director, said Heathrow could not afford to stand still but said they had to expand it in a way "which is both socially and environmentally responsible".

"This draft is for consultation only and should not be considered as final," he added.

But he said the whole project could be shelved if they could not meet environmental targets.

"We will not be able to build this additional runway without addressing these air quality issues," he said.

If approved, a third runway would not be built until 2015 at the earliest, he said.

Two schemes to help residents affected by proposals either move or try to maintain the value of their houses was also announced.

But John Stewart, chairman of local pressure group Hacan, said a third runway would "bring more noise, more pollution, and people will lose their homes".

"It's also not necessary for the economy. Unemployment is at an all-time low in west London.

He added: "No-one's going to want to buy a home here if they think the third runway's coming."

The draft plan will be put out for consultation until the end of October.

British airports handled 12.3 million passengers in May
9 June 2005

LONDON (AP) - British airports handled 12.3 million passengers in May, 5 percent more than the same months last year, thanks in part to budget airlines adding to their routes, according to industry figures published Thursday.

The fastest growth in passenger numbers was the small Southampton Airport in southwest England, which saw 30 percent more passengers, largely due to regional carrier Flybe adding to its destinations.

London's Gatwick Airport benefited from new low-cost services to Ireland and handled 2.8 million passengers in May, up 4.9 percent on the same month of 2004, according to the figures from airports operator the British Airports Authority.

At Stansted Airport north of the capital, the number of passengers was 10.7 percent higher than a year ago while at London Heathrow, figures recovered from a decline in April to reach 5.6 million in May, 2 percent up on May 2004.

Edinburgh was the fastest-growing airport in Scotland, handling 749,600 passengers in May, an increase of 12.3 percent on a year earlier.

Separately, the National Air Traffic Services said the growing popularity of budget airlines meant it handled a record number of 205.378 flights in May, up 7.3 percent on a year ago.

"Flights by budget carriers and services using regional airports showed particularly strong growth," said chief executive Paul Barron.

Govt to maintain existing night flying controls till October - Aviation Minister
10 June 2005

LONDON (AFX) - Aviation Minister Karen Buck said the government intends to maintain existing controls on night flying until October.

Buck was speaking at the launch of the second part of the two stage consultation on night flying restrictions at Heathrow, Gatwick and Stansted airports. The first stage took place last year.

'We have concluded that it is necessary to continue the existing controls for a further twelve months,' said Buck.

'This will give us time to consult widely over the next three months about the measures we are proposing and to consider the responses to the consultation before taking decisions about the next 6-year period,' said Buck.

The consultation document seeks view on whether or not to extend the length of the night quota period and makes specific proposals for the movement limits and noise quotas in each season.

'I urge everyone with a view about night flights at the three London airports to read the consultation document and send us their comments,' said Buck.

'I look particularly to the industry to provide any evidence supporting the economic case for night flights.'

The consultation document proposes that night flying restrictions should continue to be based on movement limits and the quota count classification system, as at present.

It also asks for comments on extending the night quota period (NQP) to cover the whole night from 11pm to 7am, though the government's provisionally preferred option is to retain the current 6-1/2 hour NQP.

Heathrow 'must grow'
By Charles Starmer-Smith
11 June 2005
The Daily Telegraph

The British Airports Authority this week hit back at criticisms of its plans to build a third runway and a sixth terminal at Heathrow to cope with rising demand. BAA Heathrow said it needs to upgrade and expand to meet growing demand for flights in the South-East. The airport, originally designed for a maximum of 50 million passengers, handled nearly 68 million last year. "Heathrow cannot afford to stand still. We need to plan for the future and ensure we provide excellent customer service and facilities to both our passengers and airlines,'' said Mick Temple, managing director of BAA Heathrow. The draft plans, which would necessitate the demolition of up to 700 houses, have been widely criticised. The South-East England Regional Assembly, in charge of planning in the area, said the Government's emphasis should be on reducing, not increasing, the number of flights.

John Stewart, chairman of the pressure group HACAN (Heathrow Association for the Control of Aircraft Noise) ClearSkies, said the airport expansion would affect more than 150,000 people in places such as Slough, Maidenhead, Heston, North Chiswick, Kensington and Chelsea. "Because a third runway is at least 10 years away, all these people will face a decade of blight," he said. "Hardest hit will be the communities of Sipson, Harmondsworth and Harlington, which will be virtually wiped out if expansion takes place.'' Last month Telegraph Travel reported that passenger levels were likely to break all records this summer, and London's airports are already struggling to cope with a demand fuelled by new routes and renewed confidence in air travel. Heathrow, the world's third-busiest airport, fears that, with its fifth terminal not due to be completed until 2008, the peak summer period will see significantly longer queues and journey times. A sixth terminal and a third runway, costing pounds 7 billion, would allow passenger numbers to rise to 116 million by 2030. Under the plans, which will have to satisfy Government environmental targets, the third runway will not be built until 2015 at the earliest.

Computer Glitch Disrupts Air Travel Over UK
19 June 2005

LONDON (Dow Jones)--A major air traffic control computer malfunction snarled airplanes over much of the U.K. Sunday causing nearly three hour take-off delays from London's Heathrow International Airport and forcing controllers to switch to manual operations and unusual flight patterns.

Caused by a widespread crash of some computerized British air traffic control systems, the delays rippled through European air space throughout the day and prompted some U.S. carriers to change flight patterns toward Europe in order to avoid the bottleneck.

The computer problem was so extensive that ground controllers at Heathrow resorted to giving departing aircraft flight instructions through 5,000 feet, something they usually don't do before the planes switch to departure controllers, people familiar with the situation said.

Departing and arriving flight paths were disrupted and controllers used special precautions and procedures to ensure that jetliners were adequately separated.

Pilots were providing extra information to controllers about their positions, speed, and directions because automatic safeguards weren't operating on the ground.

The delays were among the most severe pilots said they have encountered during the current summer travel season. The problem comes as European air traffic control is preparing for a particularly busy summer season with overall double-digit growth expected in its air traffic. Some regions of Eastern Europe anticipate increases of more than 50% in air traffic this summer.

The U.K. Control System is especially important because many planes arriving to Europe from the U.S. and elsewhere go through British air space.

Air traffic phone fault delayed London flights

LONDON, June 20 (Reuters) - Flights from British airports returned to normal on Monday after a problem with air traffic control's telephones and severe storms delayed some flights from the nation's capital by up to three hours over the weekend.

Authorities and airlines blamed a bottleneck at London's Heathrow Airport on a problem with the phones at National Air Traffic Services' (NATS) control centre at Swanwick, southern England, on Sunday.

The problem was compounded by heavy storms in Britain's north and an aircraft which blocked the runway at Heathrow for 40 minutes, airlines and airport operator BAA Plc said.

"It was a small glitch with the telephones at Swanwick which imposed some flow restrictions in the morning ... the impact was quite minimal," a NATS spokeswoman said.

However, airlines said flights were delayed up to three hours. Some passengers reported long delays on the tarmac at Heathrow while waiting for a backlog of disembarking passengers to clear.

A British Airways spokeswoman said it cancelled 16 flights and reported "a lot" of delays. Flights had returned to normal Monday.

NATS denied a media report the delay was caused by a computer malfunction.

British airports were thrown into chaos a year ago when a computer failure briefly grounded all aircraft in Britain at peak time in the morning.

NATS, 49 percent owned by the British government, is closing down its operation centre near Heathrow to transfer operations to an enlarged base at Swanwick as part of a 1 billion pound modernisation programme.

Airline levy scheme sparks dispute with Treasury
By Barrie Clement
25 June 2005
The Independent

A plan to impose a £1 levy on all 50 million passengers travelling by air every year from Britain has sparked a dispute within the Government.

While the Department for Transport is understood to be in favour of the supplement, which would cover travellers when an airline went bust, the Treasury is making a last-ditch effort to block the initiative.

Supporters of the scheme are seeking to ensure its inclusion in the Aviation Bill which is receiving its second reading on Monday.

The Treasury is arguing that it is a superfluous piece of regulation and that customers themselves should ensure they are covered.

The Department for Transport is understood to back the plan on the grounds that it would replace existing regulatory law which is unsatisfactory because it covers only a proportion of passengers.

Those who book their flights through tour operators are repatriated free of charge under the statutory Air Travel Organisers Licence (ATOL), but passengers who book direct with airlines could find themselves without cover.

The plan was proposed by the Civil Aviation Authority, the industry"s regulator, and has attracted the backing of much of the travel industry and the House of Commons Transport Committee.

Supporters of a blanket scheme point out that after the terrorist attacks on 11 September 2001, which caused virtually unprecedented financial problems for the airline industry, there is a need for more comprehensive cover. Rising oil prices are causing severe problems for airlines and industry leaders believe a major financial collapse could be imminent.

The Treasury"s opposition to the plan is backed by an unholy alliance involving British Airways and Ryanair, although Virgin is understood to have sent a letter to ministers in support of the policy. A spokesman for Virgin said the airline believed the present system was "antiquated" and supported the CAA"s proposal because it would be an industry-wide arrangement replacing ATOL.

Proponents of the scheme point out that 98 per cent of passengers were covered by ATOL in 1997, but that this has declined to nearer 60 per cent because of the growth of direct booking with airlines and "DIY" holidays. If passengers pay through credit cards they enjoy a degree of protection. Debit card payments and travel insurance offer no cover.

Tour operators believe the present system is haphazard and leads to widespread confusion about whether customers are protected. They also calculate that the ATOL system costs them £100m a year.

The Federation of Tour Operators (FTO) argues that a system funded by the whole of the industry would mean reduced prices for package holidays.

A Mori survey commissioned by the association of British Travel Agents and the FTO last autumn found that 81 per cent of respondents would be willing to pay between 50p and £2 for comprehensive financial protection.

The Trading Standards Institute believes the law has failed to keep up with changes in the way people arrange holidays.

A BA spokesman said: "We are a well established airline and it is unfair that our customers should have to fund compensation for those who choose to travel on less established airlines. Due to our passenger volumes, we would have to provide the lion"s share of the funding to provide protection against other airlines" bankruptcy."

A spokeswoman for Ryanair said it was wrong for passengers booking on successful airlines to be asked to subsidise passengers booking on "financially flaky" airlines.

"It is like asking Chelsea to give points to relegated teams at the end of every season or like asking Labour to give seats to the Tories after every election win. This proposal is stupidity personified and we totally oppose it," she said.

Heathrow is showing signs of terminal decline
The world's busiest international airport - with its shabby appearance, wonky trolleys, uninspiring shops and poor traffic flow - paints the UK in a very poor light.
By TYLER BRULE
25 June 2005
Financial Times

The world's busiest international airport does its best to be anything but international. This is both offensive and a wasted opportunity

Of all the terminals in all the world, I probably spend the most time in Heathrow's terminal one. I've never been much of a fan, but if you want to reach most places on the continent, if you frequent LAX and Narita and BA is your carrier of choice, then you come to accept T1 as a frustrating fact of life. Over the past few years there have been some decent improvements but the sum of these innovations are still outweighed by poor traffic flow, outdated signage and a general feeling of shabbiness. I have a slightly odd relationship with Heathrow - I love it because it just manages to function on a daily basis and loathe it because it is a rather scruffy representative for London, the UK and even Europe.

This week I managed to make an early escape from London's West End and made my way to Heathrow early Wednesday morning for the first BA flight to Stockholm. Most mornings the Heathrow Express whisks me westward with little fuss but when a flight is closer to 7 than 8, I'm occasionally tempted to call a car to enjoy 45 extra minutes of slumber in the back seat. Pulling up to T1 during the morning crush is a particularly off-putting experience. Even at the unsociable hour of 6.30 there are usually at least two baggage trolleys sitting listlessly kerbside - one has lost a back wheel and will spend the rest of the day blocking hassled travellers. It will in turn be kicked, shoved and manhandled but no one will ever remove it to administer necessary first aid. Further down the drop-off area, another trolley has been backed into and has taken on the appearance of a kneeling camel. It too will remain there for the day, perhaps two, maybe a week. It will meet an undignified end by being backed over again by a mini-cab driver in an equally clapped out Nissan Bluebird.

I've often wondered where Heathrow's baggage trolleys hail from? The only DNA they might share with trolleys at other airports is that they (usually) have four wheels and a push bar. They are otherwise unlike the baggage trolleys at Frankfurt, Changi and Schiphol, which feel like they've been produced by companies familiar with the process of making a chariot that's easy to push, can ride on escalators and keeps bags in place.

The best thing that's happened to T1 was the opening of a dedicated British Airways/Oneworld premium check-in area. In an ideal world the passenger should have the possibility to go straight into the lounge after security rather than trip over the latest fragrance launch from Calvin Klein or a skincare promotion, but these things happen when an airport operator can't quite decide if it wants to be in the business of hosting the world's airlines and their passengers or running a shopping mall.

BAA cannot be faulted by shareholders for maximising available retail space by cramming in as many shops as possible and keeping the weary traveller on their feet. They can be scolded for having an uninspiring mix of shops and still not mastering the art of keeping their loos clean and odourless. Heathrow's loos are far better than many others around the world but the benchmarks should be Kansai, not Lagos.

The recently opened retail expansion at T1 is about as dynamic as a suburban mall in a provincial market town. The worst offender of the lot is WH Smith. For a company that's been churning out less than stellar results, the assumption should be that Heathrow is an environment in which to shine and to demonstrate its competence as a seller of newspapers and sweets. This is far from the case. Not forgetting where we are (a place populated by high-spending travellers from across the planet), the expectation is that the newsstands should be teeming with titles appealing to the Danish shipping executive heading to Hong Kong, the Edinburgh history professor jetting to UCLA for a seminar and the Spanish luxury goods analyst off to Madrid to scout for some new acquisitions. Instead, the titles on offer are parochial and hopelessly middle England - tons of trashy weeklies, a few predictable glossies and news titles and virtually nothing international other than Stern, Oggi and Paris Match. The newspaper selection is even worse. Just as Heathrow as a transport hub does little to engage with non-English speakers, WH Smith's management seems to think it's catering to charter passengers who only fly once a year. Should you be fortunate enough to find something to purchase, the check-out process seems to move slower than the security queues.

With terminal five looking like it could easily be completed by Christmas, BAA and its partners need to work on the culture of the place as much as the construction. Some people argue that grocery stores say everything about a country, but I say its airports reveal more. In its current state, Heathrow says a lot for the UK. None of it particularly good.