For the fourth time in three years air transport in northern Europe, and especially the UK, has been hard hit by severe winter weather, which has dumped heavy snow across the continent. As has happened previously, there have been mass flight cancellations and the travel plans of hundreds of thousands of people using London Heathrow Airport over the Christmas period have been put in jeopardy. Now the recriminations have started.
Could the authorities have done more to beat the big freeze? How much is this going to cost airlines and airports in the long run?
While it is incumbent upon the British media to seize on anything that portrays the country as a "third world" nation, it is true that, again, many airports (and roads, and railways) have been more affected than their continental peers. This is partly due to lack of preparation and partly to lack of suitable equipment.
To put the matter into perspective, in almost all cases in Europe a majority of flights have continued to operate, and many cancellations have been caused by the temporary closure of the airport at the other end of the route. According to ACI Europe, 88% of planned flights to and from European airports took place on 20-Dec-2010. Amsterdam’s Schiphol Airport kept all its runways open by judicious use of snowploughs and 450 volunteers it calls "snow bears". The European Union did criticise Brussels Airport for closing but as it is based in the city that is no great surprise.
By and large the same is true of the UK, with most airports being able to open for at least part of the day once the runway had been swept. In the last spell of exceptional weather three weeks ago, Edinburgh Airport was closed for two days and London Gatwick, which only has one runway for 33 million passengers p/a, for one day. Some airports managed to avoid closure altogether, and strangely, the least affected region has been northern England, which typically experiences the worst conditions. Manchester Airport, less than 200 miles away from London, was able to take some 26 widebody diversions between 17 and 21-Dec-2010.
Last year it was Gatwick, but this time around it is Heathrow, the world’s busiest international airport, which has borne the brunt, and after what can best be described as a moderate fall of snow, nothing like what eastern Canada or the Midwest of the US might expect at this time of the year. Things got so bad that on 20-Dec-2010 that only 20 flights landed or departed, compared with the usual 1300. Some 400,000 passengers had been unable to fly to, from, or through it by that time, with the figure growing by the hour.
Airport management was anticipating, at best, 30% of flights to operate through to 22-Dec-2010 and people who had been unable to travel were already being given departure times from 26-Dec-2010 onwards. With all nearby hotels full, thousands camped out in terminals, turning them into refugee camps and it was reported that charities were handing out food parcels. “All I want for Christmas is my two front seats,” screamed the tabloid Sun newspaper (paraphrasing a popular 1940’s children's Christmas song that refers to front teeth).
Only one of two Heathrow runways was open and it did not go unobserved that all of Europe’s major airports – Heathrow’s competitors - have more than just two runways.
Neither did it go unnoticed that the comparatively tiny Biggin Hill Airport – a business jet and general aviation facility in south-east London less than 20 miles from Heathrow – managed to stay open throughout 20-Dec-2010.
But size is probably Heathrow’s biggest problem. Because it is so large, with activities spread between five terminals (two are currently under reconstruction), with intense activity on runways, taxiways and aprons, and between terminals – there is a great deal of transfer activity involving buses, especially connecting the distant T5 – it is not merely a question of keeping the runways clear.
Britain’s obsessive health and safety regulations, some of the toughest in the world and which have spawned a whole new industry, coupled with the increasingly litigious society, means that many organisations are fearful of taking any chances where customers or employees might be injured. It is for the same reasons that professional football matches have been called off during the week, including in the Premier League, despite the pitch being perfectly playable, courtesy of under-soil heating. The reason has usually been because of slippery and dangerous conditions on the approach routes to the stadia.
Moreover, a large part of the problem at Heathrow has been the difficulty encountered in clearing the area around aircraft parking positions, which cannot be done with heavy snowploughs. On 21-Dec the government offered the army as ‘muscle’ to help clear these areas, as it did on the streets of Scottish cities two weeks prior, but extraordinarily BAA declined the assistance, stating it had enough ‘muscle’ already, according to Transport Secretary Phillip Hammond. Lufthansa also claimed to have offered assistance but it was declined for health and safety reasons.
But still with only one runway open on 21-Dec as a slight thaw set in, the question has to be asked, why does it take so long to clear them? The answer is again partially the fact of the huge area the airport covers. There is little point clearing runways (and many Scandinavian airports have ‘under runway’ heating that facilitates the procedure, while Warsaw has snow-melting turbines and there are US pilot programmes to test solar and geothermal energy solutions) but leaving taxiways and other pavement infrastructure untouched for the aircraft to slide on. (Throughout the week and throughout the country it has tended to snow during the day and then freeze down to -100 Celsius or more overnight, creating the worst case scenario).
The cost implications are considerable for any airport to cover these eventualities, especially where it is perceived, as it is in the UK, that they are no more than a passing phenomenon. For exactly the same reasons, entire city public transportation systems have come to a halt. No one, especially in these financially stringent times, will authorise expenditure on expensive equipment that might only be used once a year at most.
There is a wider issue here and one that will no doubt be discussed at length once the recriminations really start. The UK has probably the most global-warming-obsessed government on the planet. Snow and ice storms do not figure in its lexicon as they are regarded universally as belonging to another era despite their annoying tendency to turn up each year all the same and, in 2010, three times already. Indeed, during the Jan-2010 white-out, in which the entire country looked like the Greenland ice cap of satellite photographs, several government contractors actually attributed the cause to global warming. This adds yet more impetus to government "jobsworths" – as they are humourously called in the media: “It’s more than my job’s worth to do as you ask” – to avoid capital expenditure on equipment that could deal with heavy snowfalls and icing.
One airport which has made an effort is London Gatwick, which seems to be portraying a more professional image as far as customer service is concerned since it was acquired from BAA by Global Infrastructure Partners (and later by various pension and sovereign wealth funds which acquired part of the equity) in Dec-2009. After suffering the worst in the Dec-2009 snowfalls, Gatwick, which did close overnight 20 to 21-Dec-2010, has invested GBP8 million in snow-clearing equipment this year, and has ordered six new snow ploughs from Zurich this month alone, prompted by its short closure two weeks previously. By the end of the winter season it plans to double its snow clearing fleet from last week’s 47 to a total of 96 and has 150 dedicated staff to work them.
Heathrow Airport, in contrast, claims to have invested GBP1.5 million in snow-clearing equipment last year and just GBP0.5 million so far this year, mainly on de-icing fluid and storage. It currently has no plans to spend more. Heathrow was least affected in last year's storms and, as noted above, maintains that this year's problems were not related to actual snow-plough needs.
This raises a related issue, the tendency to "run out of" aircraft de-icing fluid, propylene glycol, just as Britain has the alarming habit of running out of industrial rock salt to grit the roads, the latest consignment is slowly wending its way from Australia. This has happened not only in the UK this last week or so; it has been a serious issue at Brussels too. Glycol is not only used to de-ice aircraft; it can also be employed on infrastructure, and if the temperature is only around freezing point, hot water alone is often sufficient to de-ice an aircraft. Unfortunately it has consistently been well below freezing this week. Nevertheless there are environmental concerns about glycol, which is a toxin and which has to be collected and disposed of safely, which involves expensive drainage channels and collection tanks. Even so, the most efficient airports can only collect 80% of it, the remainder being spread over the areas along runways or even further afield, possibly into water channels and hence potentially into agricultural facilities.
There are now more environmentally friendly de-icing fluids on the market, some of which are not classified as toxins in normal use. If there is one lesson from the recent debacle is that more of these fluids are needed – at a reasonable price and in much greater quantities – along with the determination to use them.
To give some idea of the volumes being used, Manchester Airport dispensed 650,000 litres between 17 and 21-Dec-2010.
Looking further into the environmental issues, it was mentioned in the Dec-2010 edition of Airport Investor Monthly that one of the more remarkable presentations at the Global Airport Development conference this year was made by Professor Callum Thomas of the Centre for Air Transport and the Environment at Manchester Metropolitan University. Prof Thomas’ presentation examined airport environmental issues atypically, from the point of view of the airport operator rather than that of the environmentalist.
He argued that airports should be "future proofed" against all conceivable risks from climate change and not just the obvious ones such as global warming, making specific reference to the increasing need for de-icing and to the type of tarmac that should be used for runways to optimise performance in all conditions. He also made the point that there will be increasing competition for such resources.
Interestingly, a British government Airport Climate Change Adaptation Order already requires the seven largest airports to assess climate risk factors but again, is it merely the case that they are focussing on it getting hotter?
The British government has already commissioned numerous reports on the effects of the weather on transport infrastructure since cold winters made their reappearance in 2007. As a response to the Jan-2010 freeze, David Quarmby, chairman of the RAC Foundation, published in Nov-2010 recommendations for coping with a prolonged freeze, and which was ordered by the previous government. The response of Transport Secretary Hammond this month was to ask him to look again at the disruptive effect on airports and railways (he had previously focussed on road conditions) and to include Scotland this time around.
But that is not the end of the reports. Mr Hammond has also asked the Chief Scientific Adviser to assess whether the recent weather conditions in the country “are due to climate change” (again presupposing a link with global warming) and if the government needs to spend more on preparing for future winters.
There are yet wider issues to be considered. BAA’s CEO Colin Matthews appeared on national television news and complained that much of the problem is down to the intensity of use of Heathrow, which is true. But that statement exposes the paucity of government aviation policy. There are more than 40 commercial airports in the UK, a country that is just 700 miles from one end to the other, north to south, and never more than 300 miles east-west. Why is the risk not spread more thinly rather than on one airport?
In the same vein, Transport Secretary Hammond complained on the same news bulletin that Heathrow's problem is that it operates consistently at "98% of capacity". That is right again, but it is runway capacity that is lacking, not terminal capacity, which is adequate. So why does his government refuse to construct a third runway there?
Perhaps the most pertinent question is, and it has been repeated several times now in the British media, “Who would pay for extra snowploughs and other devices?" Surely the answer is obvious. It should come out of the insidious Air Passenger Duty (APD), which makes the UK possibly the most taxed country on earth as far as air transport is concerned and will raise more than GBP3 billion next year.
It would be nice to see the British Government using this money positively rather than just squirreling it away to help pay off the national debt - if only by making soft loans available to airports to purchase equipment. The airports cannot always pay these days; the era of huge EBITDA margins has gone for many of them. Airports Council International just revealed that 25% of their members (those that responded to their survey) recorded a net loss in 2009. In the UK, at least one major group is having a tough time of it and Plymouth Airport may be sold off for housing or commercial use. Last year Coventry Airport, which had been handling more than 500,000 passengers annually only three years before, closed down, although it has since reopened.
Finally, what is the cost of all this to the airports and airlines? BAA was unable to comment, a spokesperson stating it was focussing on operations and the human element and that such calculations would be made later. The Dec-2009/Jan-2010 disruptions caused a loss of 150,000 passengers and came mainly from delays rather than complete cancellations as Gatwick was more severely hit at the time. A better guide might be found from the six days of the volcanic ash cloud shut down in Apr-2010, which cost BAA as a whole GBP28 million at Heathrow and Stansted combined. Stansted has not been as badly affected this time around but it has experienced delays. A rough estimate might be GBP10 million so far, the final figure depending on how long the crisis lasts. British Airways, which cancelled all its short-haul flights as it often does in these cases, took exactly the same line but the general consensus is that the airline, which surprisingly made a handsome operating and net profit in the six months ended 30-Sep-2010 and which is tied to Heathrow as if by an umbilical cord, is losing some GBP15 million a day.
Will all this affect business at Heathrow in the long run? Probably not. It seems to be made of teflon as no adverse publicity appears to stick, including the fiasco of the T5 opening, British Airways’ strikes, ash cloud closures, the many weather-related disruptions or media accusations of it being “a cheap shopping mall masquerading as an airport”. Recent growth, which has been strong and immensely better than at Stansted, which continues to lose passengers, has come from business travellers seeking new contracts in a recovering economic environment and there is not that much business travel before and immediately after Christmas anyway.
It can’t lose. BA has almost all its flights operating there and will be at the centre of a new alliance with American Airlines and Iberia next year, and all the other alliances focus their UK operations there. Gatwick’s ambition right now is to be no more than an "origin and destination" airport, targetting the south London area and conurbation beyond. With the possible exception of Manchester, no other airports get a look-in. BAA expects the number of passengers passing through Heathrow to climb 6.2% to "an all-time record" of 70.4 million this year and earlier this month, it stepped up its pre-tax profit forecast for the year by 15% to GBP1.12 billion, after reporting "robust trends" for the first three-quarters of 2010.
As for the image of the country as a vacation destination or leisure travel transit point that is another matter. It must be of concern to other airport operators, lest they be tarred by the same brush, and the various national tourist agencies. The message being sent out this week, again (and aggressively promoted by its tabloid media), is that Britain cannot cope with anything mildly out of the ordinary.
One potential outcome is an acceleration of the break-up process of BAA. All the indications on the evening of 21-Dec-2010 were that the British government is furious at the image that has been conveyed specifically by the events at Heathrow.
Could Heathrow now be sold? The Ferrovial consortium cannot be forced to sell it, and it would look rather awkward just as BA merges with Iberia and with the London Olympics in 2012. But the government can exercise a lot of influence just as another potential target for Ferrovial – AENA – appears on the horizon.
BAA eventually (28-Dec) admitted, in response to an article in the Financial Times, that it could have lost at least GBP40 million (USD62 million) in revenue from the four-day closure of Heathrow Airport, roughly what it lost during the shutdown of European airspace due to volcanic ash.
The European Commission Vice President Responsible for Transport Siim Kallas stated he is "extremely concerned" with the level of disruption to travel across Europe caused by snow, adding it is "unacceptable and should not happen again". He stated the commission is now monitoring the situation and is constantly in touch with all airlines and airports, as well as national authorities responsible for passenger rights. Mr Kallas also plans to hold a meeting with airport representatives to request further explanations and "take a hard look at what is necessary to make sure they would be able to operate more effectively in the similar situations in the future". He suggested the commission may implement service standards for airports. A spokesperson for Mr Kallas confirmed the commission is developing a package of regulations to cover airports.
His theme of forcing airports to provide airlines with a minimum level of infrastructure support during severe weather was echoed by the British government, which is considering new laws to fine airport operators if they disrupt passengers' journeys due to poor planning. Transport Secretary Philip Hammond stated that under the new laws, larger airport operators may be granted licences that they risk losing if they do not properly handle emergencies, including extreme weather (which appears to assume that ‘smaller airport operators are incapable of failing to do so).
The transport ministry stated the incident highlighted the weakness of the Civil Aviation Authority’s powers over airport operators. Under the current regime, the CAA can only impose penalties for specific categories, including security, seating availability, passenger queues and cleanliness. Minister of State for Transport and Aviation Minister Theresa Villiers added Mr Hammond discussed Heathrow’s plans for severe weather with BAA earlier this year, but the airport operator had still failed to properly manage the situation. Mr Hammond has declined to provide a timeline on when the new regulations would be put in place.
In response, BAA CEO Colin Matthews announced the appointment of an external international panel of ‘experts’ to establish the lessons which can be learned from recent events at Heathrow Airport. Mr Matthews has asked independent Non-Executive Director Professor David Begg, who joined the BAA Board earlier in Dec-2010, to lead an external inquiry. The panel members are drawn from airports and airlines around the world and will have a far-reaching brief to look at the planning, execution and recovery from the difficult weather conditions and will publish their report in Mar-2011. The inquiry will be supported by Dr David Quarmby, who has recently completed the UK Government-commissioned review on UK winter resilience. In the meantime, Mr Matthews has made an additional GBP10 million available to the airside operations team at Heathrow in order to bolster winter resilience with the first of the new vehicles to arrive imminently.
At the same time, BAA’s Communications Director Simon Baugh stated a number of smaller carriers operating from Heathrow were unable to handle the number of passenger inquiries they received. He stated BAA now needs to "look seriously at whether we make it a condition of operating at Heathrow that if you want to fly from the UK's biggest hub, then you have to be able to answer passengers' queries better in periods like this".
The UK Aviation Minister Theresa Villiers stated the UK Government was considering a reform of the Air Passenger Duty (APD) to reduce the impact it has on regional airports. The reform could see departure taxes on services from congested airports being increased with Ms Villiers stating: "It is not inconceivable that our tax reform might look at a higher tax to fly from congested south east airports." This would replace the existing standard one-rate policy. Ms Villiers did not clarify what is the government’s interpretation of ‘regional airport’. Not all airports in southeast are congested, by any stretch of the imagination.
Snow and ice subsequently caused further disruption in Europe, with Brussels Airport again closing for landings, in Russia, where an ice storm caused a power outage, and in the US, where up to 20 inches of snow fell in a single day, prompting US airlines to predict losses of between USD130 million and USD190 million in revenues per day while the total accrual revenue loss for US carriers is expected to total between USD900 million and USD1.3 billion. Some passengers were stuck on board arriving aircraft at JFK airport for up to 13 hours.
The Russian case is the closes to that of the UK, with Prime Minister Putin criticising airport and airline officials for allowing a backlog of passengers to develop at Moscow airports by not advising passengers of the issues and allowing them to continue to enter the airports. He also ordered an increase in the domestic production of de-icing fluid.
Costs of de-icing aircraft
A de-icing lorry can cost as much as GBP300,000 - the chassis alone costs GBP85,000, while a custom-made body can cost in excess of GBP200,000.
They can be bought more cheaply, but many airlines choose to buy premium products which are more expensive. Each of them would then have to be filled with a full tanker load of de-icer, but according to one supplier of de-icing fluid for Heathrow and other airports it is not possible to give even a rough estimate of this cost. A snowplough, such as those used by many airports in the UK generally costs between GBP20,000 and GBP25,000
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