Thursday, August 09, 2007

Hell at Heathrow and Panic at Shannon - A Victim in Search of a Regional Policy

There has been much attention in the UK media in recent times about what is termed "Heathrow Hassle," or more conventionally hell.

I hate travelling through Heathrow where I have a connecting flight. Recently, following the cancellation of the Gulf Air Dublin-Bahrain service, I had to travel via London to get a connection to Asia.

While bags can be forwarded, for most bookings, check-in has to be done all over again at Terminal 3 or 4 and whereas in December, it was possible to carry on board a laptop and hand baggage, now only one piece is allowed.

The Daily Telegraph recently quoted vice-chairman of Standard Chartered Capital markets, Sir Thomas Harris, as saying that many executives do whatever they can to avoid using Heathrow.

At the end of July, The Financial Times commented in an editorial:

There is now an easy answer for international travellers deciding whether to join the undignified race to immigration at London’s Heathrow airport. There is no point. The queue for passport checks might be shorter, but any time you make up will probably be lost again, waiting for your luggage in a tatty, crowded, rundown baggage hall.

Kitty Ussher, a new minister at Britain’s Treasury, is right to worry that the dire state of London’s main airport may put business travellers off coming to London. Some of the problems at Heathrow are the fault of BAA, the airport’s owner; some are because the number of passengers using Heathrow far exceeds the airport’s design capacity. But there are also problems that only Ms Ussher’s government can resolve.

BAA, which owns London’s Gatwick and Stansted in addition to Heathrow, is currently under investigation by Britain’s competition authorities. The result ought to be a break-up of BAA’s London airports. Because of capacity constraints, a break-up might not create much competition immediately, but in the long run it should mean at least some extra pressure on each airport to attract airlines and passengers.

In the aftermath of the decision of Aer Lingus to axe the Shannon-Heathrow service later this year, the Irish Independent reports that thousands thousands of jobs are at risk in the west it was claimed.

Some of the region's top executives said the decision sounded the economic 'death knell' for area.

The Independent says that many businesses set up in the region because the Heathrow route gave them access to European markets. Of the 350,000 passengers who use the route each year, an estimated one quarter are estimated to be business customers.

Ryanair's Michael O'Leary criticises political meddling in Italian aviation but calls on Taoiseach Bertie Ahern to support reversal of the Aer Lingus decision.

Aer Lingus was privatised last September and Ryanair built a stake of 25% in the airline. Michael O'Leary is proposing that the Irish Government should join with Ryanair to get Aer Lingus to reverse gears.

Few would have any doubts that Michael O'Leary would give Bertie Ahern a robust PFO if the latter tried to intervene in route decisions.

In a letter in the Irish Times today, Prof Anthony McElligott of the University of Limerick writes that the news that Aer Lingus is dropping its Shannon-Heathrow route should not come as any surprise. Over the past three years its services to and from Shannon have been cut back progressively, as any regular user will have noted.

The proposed relocation to Belfast International Airport obviously makes sense from the company's point of view and follows the decision to expand services out of Cork and Dublin. Even the most casual observer should have been able to read the writing on the wall. Understandably, staff at Shannon are aggrieved by this, and customers too should be unhappy.

However, the anger should not all be directed at Aer Lingus chief executive Dermot Mannion: he is, after all, an accountant, and it would be too much to expect him to consider the human cost and inconvenience. The present crisis at Shannon stems from the failure of the airport's management to ensure that there is healthy competition between carriers. at Shannon. Until recently, easyJet had tried to establish a regular service to London Gatwick, but gave up.

With the withdrawal of Aer Lingus, the way is open for Ryanair to establish a monopoly over the UK route from Shannon. This is very bad news and one can expect a radical change in its pricing policy.

As one of many regular business users who need either to land at Heathrow or transfer onwards to Europe, I want to know why Shannon Airport Authority did not anticipate the current situation, and why it has done nothing to attract other carriers to Shannon (such as the excellent BMI, which also flies into Heathrow). Luckily for me, Cork is only marginally further away than Shannon and that will now become my local airport.

Transport Minister Noel Dempsey has so far resisted pressure to intervene.

Ryanair makes decisions based on its commercial interests. Should Aer Lingus revert to its pre-privatisation status with politicians and trade unions having undue influence on day-to-day operations?

When we have a back-of-an envelope decentralisation policy (remember that?) and our system of cronyism overriding the development of a coherent regional policy, it is not surprising that we end up with a panic about Shannon Airport.

As Prof McElligott suggested, it's easy to dump on Aer Lingus rather than focus on other crucial issues.

Issues such as the "Shannon stop-over," may have been on the agenda for decades but like so much else, the Irish response is: take action, only when there is a crisis....a dire crisis!