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Situation Normal, All F**ked Up

Heathrow’s Terminal Five, the one which is fingerprinting passengers even if they take domestic flights, has got off to a glorious start.

The British Airports Authority, now owned by Spain’s Ferrovial, is a joke. In an ideal universe, it would be broken up – as it should never have been privatised as a monopoly in the first place. If the wannabe Mayor of London, Boris Johnson, wants a campaign issue, this is it.

Update: I should of course stress that BA, which operates out of the terminal, bears a heavy lump of the responsibility for this. Its share price is down today by more than 3%. At least BA feels the economic chill of this sort of mess, BAA does not. One commenter points out that hitches often happen at the start of a new venture, but that does really wash since one assumes – right? – that the baggage and check-in facilities at a new airport were beta-tested to make sure they work properly. One would like to think that this is standard procedure in any new operation.

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15 comments to Situation Normal, All F**ked Up

  • It is fairly normal for large projects like this to have these kinds of teething problems. If everything is working okay in two weeks time, then this means relatively little. If these things are still going on in two weeks time, then people should start worrying.

    The fingerprinting plan is “on hold for now, too. It seems that BAA have figured out that this is bad for business, and my hunch is that they will drop it in favour of less intrusive means of identification.

  • one assumes – right? – that the baggage and check-in facilities at a new airport were beta-tested to make sure they work properly

    Yes, of course, but it is a scaling issue. Terminal five is designed to handle an average of around a hundred thousand passengers a day (more on peak days – probably a good deal less yesterday, but still in the many tens of thousands) You cannot test the systems with that many passengers at once. You are to some extent trying something new when you go live, however much you want to test it. The truth is that I have never seen a large piece of infrastructure go into into service without a few problems of this nature. And Terminal Five is one of the biggest that has ever been built anywhere.

    Even Hong Kong Airport (somewhat smaller than Termnial 5 when it opened) had a few problems of this nature when it first opened, and this is generally regarded as one of the best run airports in the world.

    The issue is much less whether there are a few problems now as it is how well BAA and BA respond to these problems and get them fixed. If the airport is running fine after a few days, a start like this is of no significance whatsoever. If the problems are still ongoing in two weeks, or in months or years, I will become very unsympathetic indeed.

    I am not defending BAA in general – I have spent enough time in queues at their airports to make me rant for hours – but I do think they deserve a little more time here.

  • Adrian

    “At least BA feels the economic chill of this sort of mess, BAA does not.”

    I think it will, in any number of ways. Its contracts will have performance-related penalties, fewer passengers through T5 will impact its revenue and its costs will rise as it has to spend more on security personnel to prevent bottlenecks. Most damaging of all, it has lost a huge amount of credibility which will hurt its ability to win new contracts or extend existing ones.

    Its shares may no longer be listed but yesterday its bonds fell 8%.

  • Dale Amon

    There was another large airport (Denver perhaps?) whose baggage handling system completely fell apart when first tried under real conditions rather than tests. Took them quite a while to sort it out too.

    I believe Terminal 5 is basically a baggage handling system with a building stuck on top of it. It is that complex. Just try to imagine the magnitude of the baggage problem. It is mind boggling.

  • Adrian

    This project was easily specified – shift x people with y luggage through airport on March 27. Test the software, make sure the hardware functions, make sure enough people around to do the job.

    With no unpredictable factors such as fog, strikes or terrorist alerts there was simply no excuse for this f**k up.

  • Dale: Denver was the screwup that all others pale by comparison to. The new airport opened 16 months late due to the new baggage system not working, and the automated baggage handling system ultimately had to be abandoned. The airport reverted to a traditional non-automates system, which I believe is what it still uses.

    What is really stupid here is for the executives and managers to announce how perfect and wonderful the new terminal will be. Obviously they are going to have everything they said quoted back at them the moment something will go wrong.

  • As libertarians aren’t we supposed to be against competition legislation? Aren’t we supposed to say “In a true free market no monopoly can last for long as competitors will enter the market and undercut it.”?

    So, is the theory wrong or is this not a true free market? And if the latter, why not?

    My money’s on planning, by the way.

  • John K

    These are the dopes who won’t let us take a tube of toothpaste on a flight? Remind me why we are supposed to have any trust in these morons. Can you imagine the mess these fools would have made of trying to fingerprint every passenger?

  • Planning laws obviously are a way of looking at it. It is obviously not possible for you or I to buy a large chunk of land in the south of England and build an airport on it. If it was, things would probably be very different.

    The big fault of most of the Thatcher privatisations was that government owned monopolies were privatised to become privately owned oligopolies or monopolies. In most instances competitive forces have broken down the monopolies to varying degrees. (In telecommunications, for instance, competition is intense and BT is no more than a moderately important company). Even in the case of London airports it has happened to a very small degree, as London’s two non-BAA airports (Luton and City) have grown rather faster than BAA. However, with a 7.5% market share between them, their impact is relatively limited.

    In some cases this failure was due to the difficulty of the exercise in splitting a state owned business up before privatising it. Mostly, though, it was due to the fact that more money could be raised by selling a monopoly than by selling a group of unproven smaller companies. Privatisation was seen as being about raising money, and not about promoting competition and improving the economy.

    BAA was a sad case. In this case, splitting up the business in London would have been trivial. London has three airports. Each should have been sold separately. Heathrow would still have had a dominant market position, but its owner would have had a market share of about 50% rather than the 92% it has today.

    It may be that the market will still do something about this though. Ferrovial is one of those companies that used the credit bubble to buy assets when money was cheap (even more so in Spain than most other places) and which must now be finding that its debt levels are troubling. Asset sales are one likely outcome of this. If it decides to try to hold on to “core assets” and sell off the less profitable ones, it may be that Gatwick and Stansted might be sold to other owners. This would be a very positive development.

  • As libertarians aren’t we supposed to be against competition legislation? Aren’t we supposed to say “In a true free market no monopoly can last for long as competitors will enter the market and undercut it.”?

    That is correct. This is not a free market, because the state is imposing the monopoly.

  • Sorry, I’ve read the link you refer to but it does not seem to bear you out. BAA may well have been privatised in a monopoly position but that does not a monopoly make. BT was in exactly the same position but its position has steadily been eroded by its competitors. Why not BAA?

  • John K

    Well Patrick, why don’t you build a rival airport in South East England if it’s so easy? Get back to me when you’ve finished and we’ll talk about monopolies.

  • That’s my whole point. Or rather my guess. Competitors can’t just enter the market. So, the free market solution is not to force BAA to split but to free up planning laws.

  • John K

    I think in practice it would be rather easier to split ownership of the three London airports. Even if there were no planning laws it would be almost impossible to build another airport near London, unless the state granted draconian powers of compulsory purchase, and I for one would not want that.

  • Johnathan Pearce

    As libertarians aren’t we supposed to be against competition legislation?

    We are. We are also against the idea of letting governments, as a matter of policy, selling off state assets as monopolies, while at the same time maintaining a planning/airtraffic control system that operates to kill off meaningful competition.

    The parallel with what happened to BT does not really work. Unlike the telecoms market, there has been no wholesale liberalisation of the aviation market; for sure, we have seen the arrival of low-cost airlines, but the actual airport hubs resemble governments in most key respects. Sure, free up the planning laws, but then that also requires one to think about the airspace issues, air traffic control. Britain is small, its skies are already crowded.

    Some added competition might help. London needs to have an airport on the eastern side of the capital.

    Britain is shit at big projects. Just imagine: the same morons who run the airport are probably also the contractors working on things like the Olympics, the ID card, NHS computer system………(shudder)