BAA stated the increased operating fees and capital cost of snow equipment would ultimately have to be passed on to London Heathrow’s passengers (Bloomberg, 12-Jan-2011). Heathrow posted a 9.5% drop in passenger traffic in Dec-2010 and the severe weather has been estimated to have cost BAA GBP24 million. The airport operated has pledged to spend GBP10 million on new snow equipment at Heathrow.
BAA: “The only source of money to pay for such facilities in the long run is passengers. Therefore we and the airlines have to take decisions, in the end, based on what is a reasonable cost for passengers to bear in order to support having, say, 10,000 beds, or 100,000 or 400,000 in the event of substantial disruption. That’s not an easy question … If Heathrow stops for a day it costs us several million pounds and that will buy you a lot of snowplows. So anyone who thinks that penny pinching caused us not to buy equipment would be wholly irrational.” Colin Matthews, CEO. Source: Bloomberg, 12-Jan-2011.