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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
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Taken before the transport Committee
on Tuesday 8 March 2011
Mrs Louise Ellman (Chair)
Mr Tom Harris
Mr John Leech
Examination of Witnesses
Witnesses: Andrew Lord, Director of Operations, British Airways, Steve Ridgway, Chief Executive, Virgin Atlantic, and Corneel Koster, Director of Operations, Safety and Security, Virgin Atlantic, gave evidence.
Q109 Chair: Good morning, gentlemen, and welcome to the Transport Select Committee. Could I ask you, please, to identify yourselves with your name and organisation? This is for our records. We will start at the end here.
Andrew Lord: Good morning. Andrew Lord, Director of Operations British Airways.
Steve Ridgway: Steve Ridgway, Chief Executive of Virgin Atlantic.
Corneel Koster: Good morning. Corneel Koster, Director of Operations, Safety and Security, Virgin Atlantic.
Q110 Chair: Thank you very much. Mr Ridgway, you have told us in the evidence that you have already submitted that the December disruption affected 55,000 Virgin passengers and cost you £10 million. How was that cost incurred?
Steve Ridgway: We had two major incidents in December. One was at the beginning of December, where we lost quite a lot of flights at Gatwick; we lost 18 flights. Then the big one was at Heathrow in the runup to Christmas, where over 170 flights were cancelled. That is where the large bulk of those 50,000 passengers were affected. That may not sound many flights, but I think you need to remember that Virgin Atlantic is a long-haul only airline and certainly, in the case of Gatwick, we only operate very large aircraft which carry up to 450 passengers. We certainly affected a very large number of passengers, both at the beginning of the month and then particularly in the runup to Christmas. The cost of that was obviously a huge amount of lost revenue, particularly in the Christmas week, which is probably the peak travel week of the year, as well as some costs we incurred on chartering aircraft to try and get passengers where they needed to be before Christmas, as well as the compensation obligations we have under EC 261 to pay compensation to passengers that were affected.
Q111 Chair: Mr Lord, what did British Airways lose on the bad weather?
Andrew Lord: The scale for British Airways was slightly different. Across the month, we cancelled in the order of 3,000 flights across our network. We are obviously a network carrier so we had a large number of short-haul services that were cancelled because of disruption throughout the network. Europe was particularly badly hit for snow. We were also impacted by the cancellations at the start of the month at Gatwick and Heathrow because of that disruption and then obviously the major disruption in the week of 18 December. The costs we incurred were very similar to those already explained by Steve for Virgin.
Q112 Chair: What do you think went wrong at Heathrow when things didn’t seem to be as bad at other airports?
Steve Ridgway: There is no doubt it was a serious incident. There was a lot of snow, as many of us remember, in that part of the country on that weekend. Heathrow had not been affected anything like so seriously at the beginning of the month. We had high expectations, and Heathrow had high expectations, that there would be disruption, but it would be able to deal with it. It was very disappointing that at such a key time we were not able to get the airport open much earlier, because travel at that time is very nondiscretionary for travellers. It is around key Christmas plans, people are planning their trips down to the last minute to arrive Christmas Eve or Christmas Day or whatever, and of course it rolled on sufficiently that it affected that.
What exactly happened? There are lots of things being looked at, and Heathrow is conducting its own inquiry, but it would seem to us that we were never quite sure whether the contingency plan was fully implemented in the way that it was proposed, and I am sure we will talk about that a bit more. But we certainly didn’t get the airport open in anything like enough time.
Q113 Chair: It has been reported that you have refused to pay fees to BAA. Is that right?
Steve Ridgway: We were very disappointed, and frankly very angry, about what happened and the fact that we disrupted so many thousands of passengers’ lives and trips in that runup. We have very little recourse. We don’t have what I would regard as normal commercial terms with BAA. We have conditions of use, and there is virtually no recourse under that, so we wanted to make a pretty loud statement that we were very unhappy about this situation. Particularly, looking forward, we know there is a new Airport Economic Regulation Bill going to go through Parliament, and we want to see far more potential redress both for airlines and passengers, not just around snow and disruption but around the overall way that we operate this key piece of transport infrastructure in this country.
Q114 Chair: Did you say then that you have no recourse to the airports authority?
Steve Ridgway: We have no recourse to compensation in an event like this, so we were trying to make a point that that is not satisfactory. If there is failure to perform, we need to have some kind of redress. That is what we are looking for going forward, because it is not there right now and it has not been there for a very long time.
Q115 Chair: But the press did report that you were withholding fees. Is that correct?
Steve Ridgway: We withheld a very small part of our landing fees as a protest. We knew, ultimately, that we would have to pay those fees. We did not want to disrupt passengers further if BAA took very stringent measures, but I think it was very important that we were able to show the kind of frustration that we all felt about what had happened and we needed to try and ensure that it didn’t happen again.
Q116 Chair: Is it legal advice you had that said you didn’t have any recourse to the airports authority, or was it to do with maintaining good working relations?
Steve Ridgway: Yes, it is predominantly that. Under our conditions of use we have very little, if any, recourse in the event of events like this.
Q117 Chair: Mr Lord, what is your position in relation to the withholding of fees or any possible legal action?
Andrew Lord: We have not taken the same course of action that Virgin have chosen to do. Heathrow airport have already taken a decision not to charge airlines for the period around 18 December and the following day for parking fees and some other charges. We are still considering what options we may have, but we believe the best interest is for us to work with BAA and other partners at the airport in terms of how we move forward to make sure we don’t have a repeat occurrence. We don’t think our customers are interested in any public disagreement with BAA or any other party.
Q118 Chair: Do you think that you have any legal recourse if you wanted to take that path?
Andrew Lord: As I said, we are considering our options, but, in the same way that Virgin have already stated, the airlines don’t have any direct ability to claim any financial recompense.
Q119 Gavin Shuker: What financial incentives do you have in place to make sure that passengers’ travel plans are not affected?
Steve Ridgway: If I can answer that initially, I guess the greatest and most effective sanction that we have is competition, and you are seeing that sitting here in spades. That need to perform and to provide passengers with that choice and make sure they travel with us as opposed to other airlines is all-consuming and all-powerful. That is the thing that drives us to make sure that we don’t let our passengers down, and it ultimately becomes a matter of reputation. So it is a very, very powerful force. You can see it in many sectors and industries, and you have certainly seen it for a long time between our two companies.
Andrew Lord: We are obviously working in a service industry, so customers have a great deal of choice. Our priority, particularly in circumstances of this nature, is to focus on safety and security and to make sure that we deliver the best service to our customers, however difficult the circumstances. We are all commercial organisations. If we don’t deliver what our customers need, they will choose to go elsewhere. That is the greatest incentive we have.
Q120 Gavin Shuker: How would you characterise that compared to the airports out of which you operate? Do they face similar financial penalties for disrupted service to passengers?
Steve Ridgway: They don’t face the same factors because, simply, they are monopoly owners of an asset, like Heathrow, for example. That is why regulation is so important so that as far as possible-and it’s very difficult; I understand that-you need to stimulate the same competitive pressures, responses and need to provide those high levels of service to customers as you get when you have companies that are competing fully commercially. That is why regulation is so important when you have a monopoly owner of an asset like this, and indeed in other assets as well.
Andrew Lord: Also, clearly, the airport operators lose out if airlines cancel. They incur financial loss as a result of charges not being incurred because services don’t operate. But, again, as Steve has already said, there is not direct competition in the same way as there is between the airlines.
Q121 Gavin Shuker: Just to change topic briefly, there was of course a snow plan in place over which BAA consulted with the airlines. What was the nature of that consultation earlier last year?
Andrew Lord: If I go first, following the previous winter, a review was carried out by all parties, particularly at Heathrow, on how things could be improved. As a result of that, a detailed snow plan was produced by BAA, in consultation with a number of the key airlines at Heathrow. The final consultation, I believe, was in mid-October, and that plan was published and was the plan to which all parties would be working. Specifically, it detailed what resources would be made available for certain parts of the airport in order of snow clearance, antiicing, de-icing of aircraft stands, taxiways, aprons, runways and service roads. That was the plan that was published and the whole Heathrow operating community were due to work to it.
Q122 Gavin Shuker: Are you pleased with the level of consultation with airlines? Did that aspect work well?
Andrew Lord: From the perspective of British Airways, we were heavily involved. As ever, we could always have looked, as a community, to see if we could have completed that work a bit earlier rather than leaving it to the final meeting in mid-October, but I think the plan that was published for a significant snow event was robust. We should all recognise that the event that actually occurred on 18 December was an extremely severe event in terms of the volume of snow and the rate at which it fell. I don’t believe, with the plan that was produced, anybody foresaw the level of snow, but none the less our expectation was that the airport would close and then reopen fairly quickly.
Q123 Chair: Mr Lord, in the written evidence you have given us you say something very different. You say there that you were not involved in the plan, that you might have seen it but you actually were not involved in putting it together and didn’t feel a part of it. That is not the same as what you are saying now.
Andrew Lord: We were involved in it towards the end, in the final meeting that happened in October. I believe there was some consultation prior to that, but it wasn’t necessarily to the level of engagement across the whole community that is going on today following the events of December.
Q124 Chair: Yes, but we are trying to probe at the moment what happened and what went wrong. The written evidence you have given us says fairly clearly that as an operator you were not in fact involved properly in the formulation of that emergency plan-the snow plan.
Andrew Lord: We were not involved in the entire production of the plan. We were involved to some extent around the specific resources that we believed BAA would produce for clearance at terminal 5-to some extent.
Q125 Gavin Shuker: Just to drill down into the detail of this point, was it all airlines that were consulted as part of the snow plan? My second question is related to the first. To what extent was that final meeting actually just rubber-stamping by one or two airlines versus deep involvement much further back?
Corneel Koster: If I can answer that, the snow plan was certainly being consulted on via the Airport Operators Committee, so all airlines had the opportunity to comment on it. However, it is updated every year rather than written from scratch, and we would like to stress that we are not the experts on keeping an airport open. It is the airport operator that is, in the end, the expert on that. For us, for Heathrow, the plan looked rather sensible, but we think the plan went wrong in execution when it took too long to reopen the second runway. The fact that there was some disruption on Saturday the 18th, we would agree with Andy Lord, was inevitable. However, it was on the scale of the disruption, the length of time that it took to open the second runway, and the communication where we felt Heathrow fell short. We were consulted, but could you call it a rubber stamp? It is a slight, light consultation, and in the future we will make sure that we are consulted a lot more when it comes to snow plans.
Chair: A rubber stamp is not quite the same as proper consultation, but we are listening to what you say and also looking to the future.
Q126 Mr Harris: Mr Ridgway, if Virgin were in the business of running airports as well as flying planes, how differently would you do it from BAA?
Steve Ridgway: Again, it maybe comes back to the answer to the previous question. Airline margins are so thin and competition is so fierce that you are very, very focused on making sure that you operate and deliver the promises that you have made to your customers. That drives us day in, day out because it is about the business we have built, our brand and our reputation. I can’t say for sure, but judging by the way all our staff reacted over those few days in terms of trying to look after our customers and get the operation going again, I just feel that we would have left no stone unturned in trying to make sure that we got our operation back running again as quickly as possible. It is much more in our DNA and it is driven by that fierce competition that we face. If we fail, we face a very big penalty for doing that.
Q127 Mr Harris: From a practical point of view, was there anything specific that you have recommended to BAA they didn’t do that they should have done?
Steve Ridgway: You may be aware that airlines have, and we certainly have, a very good crisis management team and process, so if there are ever any incidents of any sort we activate what we call our amber group very early. We preactivated our amber group on Thursday night, before the anticipated snow, because we could see the weather forecast coming through and the deterioration. That team is very competent and, ironically, had rather too much practice earlier in the year during the ash crisis. We were putting in place all the things in anticipation of the weekend, booking hundreds of hotel rooms, making sure we could get staff in, billeting staff at or near the airport so that we could operate flights, and so on.
My colleague Mr Koster can talk about this, but we did not see the same early ramp-up of the precontingency meetings that were part of the snow plan under the BAA’s plans. Yes, I think it was different, and we were disappointed that we didn’t appear to see the same early approach to activating the plan.
Q128 Mr Harris: Assuming that we may be in line for severe winters in future-this is to all of you-what difference do you think the fact that Heathrow is operating on such a high capacity without a third runway will make? Would the existence of a third runway have a material benefit in helping the airport to cope with severe weather in the future?
Steve Ridgway: I think the key point about Heathrow is, yes, it is absolutely full and it is operating at a very, very high level, but that makes it even more important that, before there is something like a third runway, we are able to keep that airport open almost at all costs. It is the world’s busiest international airport. It is a key UK strategic asset. It is vital to our trading as a nation. It is obviously a vital part of the economic recovery that is going on right now. All focus should be making sure that the planning and the resources, whether it be snowploughs through to de-icing fluid, communications and execution, with all the stakeholders, are most effective. Yes, Heathrow is working at very high capacity and there is little margin in events like this, but that is why those plans need to be robust and they need to be executed robustly.
Q129 Mr Harris: I do not want to reopen the third runway debate, but is your view that, were the third runway and extra capacity miraculously to materialise, this sort of disruption could be at least partly avoided?
Steve Ridgway: If the infrastructure wasn’t as stretched as it is, there is no doubt that it would be easier in case of events like this to keep the airport operating and to probably get it operating earlier. But we are where we are and we have to deal with that, and yes, there will be, undoubtedly, debates about infrastructure needs for the UK going forward.
Q130 Mr Harris: Do British Airways feel the same?
Andrew Lord: We have a very similar view. It is about complete airport infrastructure so it is about available parking stands for aircraft as well. Not only is Heathrow constrained from a runway perspective, but it is constrained from an aircraft parking stand perspective as well. There is an awful lot of work ongoing to improve the operational resilience of the airport, and a lot has been done over the last two or three years to improve that. There is no doubt that, if the airport gets to operating smoothly and recovering quickly, then, clearly, the impact to customers is much improved and much reduced. You can see that in the recovery that all the airlines have had since January. The service levels that have been delivered since then have been quite excellent. Comparing it to some of the major European hubs that are operating at 75% capacity, their ability to recover, when they have major disruption, is much quicker because they have the infrastructure available to do it.
Q131 Mr Leech: There is a perception that in this country we don’t deal with adverse weather conditions in the winter as well as some countries that have far more severe winters. In your experience of flying planes to different parts of the world, do you think that is a fair perception?
Corneel Koster: If I can answer that, we would not agree with that perception. We agree with David Quarmby that UK aviation generally demonstrates a high level of resilience, though possibly not as good as places that have a much higher probability of such severe snow events and weather patterns. Of course, they are going to be more prepared and they will make different tradeoffs on investment around equipment, manpower and infrastructure. We believe that several European airports faced a difficult period in December as well.
If we can compare Heathrow with Gatwick, Gatwick also suffered during the snow event in early December and had several quite rocky days and several days when the airport infrastructure didn’t operate as well as it should have. But what then happened prior to the next event on 18 December is that the command and communication infrastructure at Gatwick learned a lot and implemented a much more integrated approach of working with the airlines to ensure that the airfield would open as soon as possible. Overall, we would not agree that the UK deals with these events in a nonoptimal way.
Q132 Mr Leech: You made an interesting point right at the beginning. You suggested that some airports that are used to very adverse weather conditions on a more regular basis are perhaps in a better position to deal with the adverse weather. Is it really about a lack of experience in dealing with severe weather that causes the disruption when we have it on an irregular basis?
Corneel Koster: We don’t think it is a matter of experience. Generally, the UK has dealt with previous snow events better than it did this time, and we think it is really important, which is a testament to the fact that you have called for this session, that we need to learn and improve in the future to do even better, because we did disappoint tens of thousands of passengers. We can be better and we can be more prepared.
Q133 Mr Leech: Are there any airports around the country, around Britain, that deal with adverse weather the best, and are there lessons to be learned by certain airports from other airports around Britain?
Andrew Lord: It is fair to say that there are always lessons to be learned. In our experience, the way Gatwick Airport has learned over the last 12 to 18 months has been probably the best example, from having severe closures in the previous winter to having more reduced closure at the start of December and end of November, and then managing the impact of the heavy snow through 18 December quite well by putting the learnings in place and working with the whole community in Gatwick, both looking at the airfield and the local infrastructure around it to ensure that the communication and the decisions taken were in the best interests of all the customers. There are, clearly, lessons that Heathrow can take from Gatwick and also from some other airports in the UK, but I do think we need to recognise that the level of snow that we saw on the 18th was the first we had seen of that nature for 30 or 40 years.
Q134 Mr Leech: Following on from that last comment there, if we are going to have worse winters in the future and more snow potentially, do we need to reassess how bad we expect the weather to be so that we are ready for a much worse eventuality than perhaps we have been prepared for in the past?
Andrew Lord: I think that is a very valid point and work is certainly-
Q135 Mr Leech: Where do you draw the line? How do you assess how bad we need to prepare for?
Andrew Lord: That is a much more difficult question to answer. In terms of the assessment as to the advice we can get from the experts, be that the Met Office or a scientist, that work is ongoing, both Government-led and in the industry, to see whether or not events of this winter are going to be more regular and more frequent. What it will ultimately come to is how we can ensure that we mitigate those events in the best way possible to ensure we maintain a safe operation and provide a robust service for our customers, and, if there is any disruption, make sure we keep it to the absolute minimum and recover quickly.
Q136 Mr Leech: I have one further followup question from that. Are you suggesting then that, if the weather experts tell us that these events are not going to happen more frequently, we ought not to be more prepared for worse eventualities, or are you saying that we have got to be prepared for worse eventualities but we have to bear in mind how likely those events are going to take place?
Andrew Lord: Certainly, in British Airways, we will be prepared for more events of this nature going forward, and indeed for this winter we invested more than £2 million in additional equipment to make sure we could deal with severe snow following the previous winter in a better way, and generally we have. Ultimately, whatever the experts say, British Airways will certainly take the view that we will invest and put plans in place to deal with the eventuality in a far better and more robust way for our customers than they experienced over the last year. What we require is all partners in the industry to do the same thing. At the end of the day, the airlines are reliant on the airports to provide the facilities to keep the airfield open and operating.
Steve Ridgway: There is no doubt with the experience of the last two winters that it would be prudent to plan more carefully. We probably need more robust snow plans, which probably have a greater degree of granularity around the severity of the likely weather, and we need to try and balance the resources against that. But, at the end of day, it is going to come down to making sure those plans are robust, that all the key stakeholders are involved and that we do execute those as efficiently as we can. A lot of that is around planning and communications during the event. But I think you are seeing that need to ramp up and have greater capability to deal with adverse circumstances like this.
Q137 Steve Baker: I get the impression so far that you are largely at the mercy of the airport operators. Is that how you see things?
Andrew Lord: At the end of the day, if the airport facilities and infrastructure are not available for us to operate safely, then, yes, ultimately we are. At the end of the day we have to work together with the airport operators. We are their customer. Ultimately, our customers suffer if we can’t get the service that we need out of them. So, ultimately, yes.
Corneel Koster: I would say, yes, we are quite dependent on them to get the airfield open and to provide accurate information to enable us to inform our passengers accurately so that they can re-plan their travels. However, there are a lot of things that an airline can do on winter resilience, and if you like, I can share with you what we do in Virgin Atlantic. For example, we have a gold standard de-icing contract which we pay for year round to make sure that, if we have ice or snow events, we get preference from our supplier. We run winter preparation exercises all across the world. When there was an expected severe weather pattern, as we did this time, on the Thursday we started running our contingency team meetings to prepare for the event. We updated our airport team with the EC 261 information. We started making hundreds and hundreds of block hotel bookings to ensure that we could house our passengers but also so that we could get our teams who live far away to and from the airport to make sure that the key people were available for their critical shifts.
We started analysing the weather pattern and, sometimes, we do make proactive cancellations. This time, the weather pattern for us didn’t look so severe that we had to cancel our schedule on the Saturday and we received no information from any airport operator that we were advised to cancel our schedule. So there are a lot of things that we do in preparation for an event like this and to enhance our winter resilience.
Q138 Steve Baker: Given this division of labour-I am just returning to Mr Ridgway’s point about normal commercial terms not being in place-could I ask you all what is it that you want to see in terms of putting in place something which more closely approaches normal commercial terms?
Steve Ridgway: We need to get to a regime where we are seeing a set of quality standards that are required in a wide variety of circumstances, obviously particularly around normal operations, to make sure that we operate very high standards and reliability around things like ontime performance. There need to be enough sticks and carrots to make sure there are the penalties there in terms of nonperformance, and equally there can be incentives there in terms of where we are seeing service levels being exceeded.
It is quite ironic, and I can just show you this, that Heathrow had a very good month in December. If you look at all their quality score indexes, they pretty much pass on all those metrics. Virgin Atlantic’s own version of that-our score card for December-was pretty bad in terms of how we measured our performance, whether it be financially, what we did to our customers or whatever. Our big plea is that we get to a much more balanced score card around making sure that the airport owners have the right sticks, if you like, and the right carrots to emulate the very real competitive pressures that exist in normal competitive businesses.
Andrew Lord: We would share a very similar view. At the end of the day, if the airport operators don’t provide the service to us that we need, it is our customers that suffer, and that is a situation that’s not acceptable to us as a service industry. We need to ensure that there is appropriate incentive as well as penalty in the right measures and that the industry is working together to make that happen. If we are working against each other because certain business or regulatory measures don’t drive the right behaviours, then that would be ultimately the wrong outcome for the customers of all the airlines.
Q139 Chair: Does all of this mean that you agree with the proposal to give the Civil Aviation Authority powers to regulate at times of bad weather?
Steve Ridgway: Yes. I think that is why the new Airport Economic Regulation Bill is very important in terms of making sure that we have a more robust regime. If you have monopoly owners of assets, we know from some of the learnings from the other sectors, such as the utilities, electricity or whatever, where there are duties of provision which I think don’t exist in the provision of airport services. We can learn from other sectors where we have regulated monopoly owners of assets and make sure that we put a regime in place that has a variety of measures both to incentivise and penalise the owners of those assets in the event of inadequate performance or in the event of not developing those facilities and that infrastructure in the way that we need to as a country to remain competitive.
Q140 Chair: So you are looking for incentives and penalties in the new regulation that is proposed.
Steve Ridgway: Yes.
Q141 Chair: Mr Lord, what is your view about the new regulation proposed?
Andrew Lord: We welcome the review. We are still considering our position with regard to it, but I think it does come to very much the same thing, which is that there needs to be the right balance between penalties and incentives. We need to ensure that our customers get the service that they need out of us and we need to ensure that all the airlines have a viable commercial business going forward. What we need to ensure is that the regulation is not done in such a way that it just passes cost on to the airline customers of the airports and then, ultimately, the airlines have to make a decision on whether they pass that cost on or absorb it. But we need to ensure that the right measures, be they penalties or incentives, are in place for the ultimate airline customers.
Q142 Chair: Do you think that the Government should have a bigger role in aviation at times of severe weather, given the national importance of aviation?
Steve Ridgway: I think the role for Government is to make sure that there is a policy and the right framework to ensure that, in regard to the key providers of aviation services to the UK economy, which is obviously the airlines, the airports and many other infrastructure companies, we have very high levels of service provision and the right investment decisions being made to continually develop our facilities in this country and ensure that we are competitive. It is not the Government’s job to do that. I think the Government found it frustrating in December that, like the airlines, they had so little power or recourse. I think there was a bit of a wakeup call there, if you like. But it is really around that policy framework and understanding the importance of aviation. It is one part of our transport infrastructure, but it is absolutely key, and particularly, as we all know, to an island trading nation like this. It is about the robustness of that framework and the recognition of the importance of aviation in that whole transport mix.
Q143 Chair: But should Government have any specific powers in relation to severe weather and aviation? You have spoken more generally, Mr Ridgway, about Government’s responsibility looking at the aviation sector.
Steve Ridgway: It is something the Government may require in very extreme circumstances, but I think, ultimately, the initial responsibility is on the airport owners and on the airlines that work with that airport owner to make sure that those facilities can be kept open. I guess there could be very extreme circumstances where it is such a key strategic asset in terms of keeping the airports open that the Government may wish to step in with the military or whatever, but the initial responsibility obviously is in the private sector in the companies that operate in that area.
Q144 Chair: Mr Lord, what is your view on Government involvement at times of severe weather?
Andrew Lord: Clearly, the Government needs to take a view depending on the circumstances at the time. As the Quarmby report stated, the aviation industry itself is very good at dealing with these events and planning for them. There are always lessons that we can learn, as we are doing now post-18 December. I don’t think it is necessarily appropriate for the Government to get into the level of detail on whether or not airports or airlines are doing all that they can on the day, but it is absolutely right that the Government hold the industry accountable for making sure that the appropriate actions are being complied with and making sure that we are looking forward in terms of future plans and whether or not there is action from an infrastructure or investment programme with which we need to get involved.
Q145 Chair: What do you expect to come from the Begg report looking at Heathrow?
Steve Ridgway: We have fully cooperated and participated in the Begg report. We had concerns initially and maybe still have concerns about the independence of that report but, none the less I think-
Q146 Chair: What are your concerns about independence?
Steve Ridgway: The inquiry is being run by BAA itself, obviously, and by one of their directors, so that independence is very important, but there are two critical things to come out of it for us. One is the key learnings around the specific issues of what went wrong in this particular event in late December, and that is around many of the things that we have talked about today, such as the robustness and implementation of the snow plan and the communications. I personally hope that it will also be a trigger to enable us to work more closely together, and coming back to the point I made earlier, around getting a set of incentives and behaviours that make sure everybody is working together and we are looking after our customers, as they are our mutual customers, to the very best of our ability.
Q147 Chair: What about clarifying respective roles of the airline operators and the airport operators? Is there any issue there?
Steve Ridgway: The report will need to identify a whole raft of areas around real clarity on responsibility for what the airport should be doing, the way it will implement its snow plan and particularly the way it will provide that core communication to the airlines, because, after all, that is the communication that then flows out from the airlines to the customers so that they know what is going on. In many ways, the more clarity and the more granularity there is around that, and around the different roles of the airport owner, the airlines, the other handling companies and many other businesses that operate on the airport, can only be good for the future.
Q148 Chair: Mr Lord, do you agree with that or are there any points of difference?
Andrew Lord: We would generally agree with it. We have fully cooperated as well. I would hope that the report will identify where there were specific failings, particularly around command and control and communication, as well as a robust plan moving forward in terms of declaring capacity when the airfield is not fully available. One of the biggest learnings that we would hope would come out of this is the ability to take decisions in advance of an event happening so that we can give certainty to our customers on what schedule we are able to fly.
Q149 Gavin Shuker: How would you characterise the communication from the BAA to the airlines during this?
Andrew Lord: If I may go first, in terms of the community at Heathrow, for the first 24 to 36 hours it was very poor. The first joint meeting was not until 11 o’clock on Sunday 19 December, and the communication specifically on the 18th regarding the state of the airfield and the likelihood of the airfield reopening was very poor and managed through the media rather than directly with the airline community, which was less than helpful.
Corneel Koster: We completely agree that on the Saturday the communication was basically absent and the communication that came to us was very conflicting. We, for example, had passengers sitting on aircraft waiting to depart who heard from the media that Heathrow wasn’t going to reopen. Normally, they would like to hear it from the airline, via the captain of course. That created a lot of unease and conflicting information. Inaccurate information was an issue as well. On the Monday, for example, when Heathrow was limited in operation, at a certain moment there was a communication from the BAA which advised passengers not to come to terminals 1 and 3 because terminals 1 and 3 were closed. But we actually had flights operating out of those terminals and we had passengers with confirmed bookings missing flights, which was particularly painful with all the backlog of passengers during those days before Christmas.
Then, last but not least, on the 21st, when eventually the second runway reopened, for a good part of the morning we were being informed that it would not reopen on the Tuesday. The earliest it would reopen would be on Wednesday at 6 o’clock in the morning. Then, all of a sudden, in the afternoon things changed and the second runway reopened. If you are a long-haul operator, that means you have lost another day. You can’t launch those flights. We need proper lead time, especially on the inbound flights, before we can get the operation moving. So late and conflicting communication, and sometimes communication direct to passengers instead of via the airline, led to an exacerbated situation.
Q150 Chair: Who should be responsible for that communication-for giving out that information?
Steve Ridgway: The prime communication about what is going on at the airfield and the capability of the airfield to respond and reopen has to come from, in this case, BAA. Then we can pick up from that and, given the lead times of then getting customers into the airport and getting the crews re-oriented, it is our responsibility to get those messages out. We had all the facilities in place to do that. It was certainly pretty galling on the Tuesday to more or less hear in the media, essentially, from the Prime Minister that the runway would be opening later that afternoon. There was then this expectation from passengers that from 5.30 on Tuesday it would all be business as normal, and of course that was not true. We had aircraft stranded all over Europe and crews out of place, and in fact it rolled on in our case-and I am sure British Airways’ as well-right through until after Christmas. We only ran our Christmas Eve programme by an absolute hair because of some of those issues. So accurate and timely communications is absolutely critical.
Andrew Lord: The other thing I would just add is that, in fact, going to the Tuesday, the decision had been taken on capacity for the next 24-hour period. A number of airlines, ourselves included, had already published a reduced schedule for the Wednesday. As Mr Ridgway said, the first the operational side of our airline was aware that the second runway was going to open was the Prime Minister’s statement. That, in turn, resulted in a huge volume of calls to our call centres, massive misinformation to customers, and we, too, had already had significant disruption. We had 38 long-haul aircraft divert and over 55 short-haul aircraft in the wrong position, with the associated crew disruption. We were able to get back to our full schedule by 24 December and a full long-haul schedule on the 23rd. That was down to the tremendous efforts of all our staff and all my colleagues at British Airways. We had a huge number of volunteers come in to run the operation and also to deal with the huge volume of calls from our customers.
Chair: Thank you very much, gentlemen, for coming and answering our questions.
Examination of Witnesses
Witnesses: Stewart Wingate, Chief Executive, Gatwick Airport, David Wilson, head of Airside Operations, Gatwick Airport, Colin Matthews, Chief Executive, BAA, and Amanda McMillan, Managing Director, Glasgow Airport, BAA, gave evidence.
Q151 Chair: Good morning and welcome to the Transport Select Committee. Could you identify yourselves, please, with your name and your organisation for our records? We will start at the end here.
David Wilson: Good morning. My name is David Wilson. I am Head of Airside Operations at Gatwick Airport.
Stewart Wingate: Good morning. My name is Stewart Wingate. I am the Chief Executive Officer of Gatwick Airport Ltd.
Colin Matthews: I am Colin Matthews, the Chief Executive of BAA.
Amanda McMillan: Good morning. I am Amanda McMillan, the Managing Director of Glasgow Airport.
Q152 Chair: Thank you very much. How much did the snow disruption cost your airports? Mr Matthews, what did it cost you?
Colin Matthews: I will answer that. Can I make, with your permission, three comments just to start off? The first is to say that I am very sorry indeed for the thousands of passenger journeys that were disrupted and the thousands of Christmas holidays that were spoilt. It was extremely damaging for passengers, very damaging for our airline customers as well, and indeed damaging to our company. That period of time cost us, in Heathrow alone, just short of £20 million.
In very simple terms, here is what went wrong. We planned for 6 cm of snow, and in the event, we had a great deal more than that fall, and it fell in a very, very short period of time indeed. In retrospect, it is clear that we should have had a plan that envisaged much more snow than that, and for the future we need to have such a plan. Since December, therefore, we have built a new snow plan, acquired new equipment and trained new drivers. We have contractors on standby ready to step in, we have volunteers trained, and we have practised new snow moving routines. Very significantly, we have discussed with airlines much more precise definitions of how to clear aircraft stands-that was what got us in particular difficulty-to make sure it is clear between us and the ground handlers who is doing what, to make sure ground handlers are available to move their equipment and to move the aircraft.
I have also discussed with the three chief executives of our biggest carriers the establishment of a very small group of a handful of chief executives, including them, myself, the chief executive of the CAA and the chief executive of NATS, which can provide and coordinate joined-up leadership for the whole of the Heathrow community on those matters that concern passengers most. Then, on top of that, I set up the David Begg review, and when that report is finalised in a few weeks’ time, if it says we have to do more, then we will do more.
I will make one final point, if I may, on collaboration. There are two distinctly different ways that I or anyone else can talk about the December disruption. The first is essentially defensive, whereby I and other people at Heathrow explain why it really wasn’t our fault; it was someone else’s fault. The much more constructive way is for us to agree with airlines how to make things better for passengers. That has been my real preoccupation since taking on my job, and it will continue to be my real preoccupation. I think that is where passengers’ interests lie-that we have better joined-up arrangements between us and all of the operators at Heathrow to provide better passenger service.
The answer to your question is, £20 million for Heathrow, and £24 million if you include all of our airports.
Q153 Chair: Would you say that your relationship with the airlines has been damaged permanently?
Colin Matthews: I think the relationship with our airlines is better than it was three or four years ago when there was the security crisis in 2006. It is certainly extremely painful for all of us through December’s disruption. It is vital for passenger service that we have good relationships with airlines, and I am confident that we can do that.
Q154 Chair: Mr Wingate, what did it cost Gatwick?
Stewart Wingate: At Gatwick Airport, the cost of the snow disruption in December was £4.5 million. To put that into context, that represents 5% of our earnings before interest and tax on an annual basis; so it had a significant impact on the financial performance of our business. During the course of December, in the first snow incident, which was significantly worse than the middle of the December snow incident, we did waive parking charges to our aircraft carriers. We fully intend, during the course of the coming summer, to consult with our airlines to include snow disruption and our ability to recover from snow disruption in our service quality regime which establishes service level agreements with our airlines at Gatwick and has financial penalties for us. Voluntarily, we are going to embark on that piece of work at Gatwick.
Q155 Chair: How has your relationship with the airlines been affected?
Stewart Wingate: I think the relationships during the course of December strengthened at Gatwick with our airlines, certainly from the time of the change of ownership of Gatwick back in December 2009. You heard earlier from the airlines that there has been a perception that we have worked very hard to improve our snow plans; we have worked very hard benchmarking Scandinavian and German airports. We have invested heavily in additional equipment at the airport and we have changed our procedures, particularly with the way in which we clean the apron areas and the stands at the airport, as well as the runways, in order to make sure that we perform better when we are impacted by snow. To put it in perspective, at Gatwick, in the 10 years prior to us taking ownership of the airport, there had been six days where the airport had been impacted by snow. In our first year, there have been over 12.
Q156 Chair: And Ms McMillan?
Amanda McMillan: On the relationship with airlines specifically, yes, I am confident that going through tougher times with airlines makes for a more productive relationship going forward. We have held debriefs, as we do after all major incidents and all weather episodes, and we believe that we have a constructive relationship going forward.
Q157 Chair: What did the disruption cost the airport?
Amanda McMillan: Across Glasgow, it was in the hundreds of thousands of pounds. We are part of the £4 million loss to BA within the airport division.
Q158 Gavin Shuker: If I can ask, first of all, a question related to Heathrow, what are service quality metrics?
Colin Matthews: My team measures weekly and monthly 20 service measures. In fact, only some of those are included within the regulatory framework, which your previous witnesses were addressing. For instance, one of them would be punctuality, and our punctuality numbers in December were appalling because of that dreadful disruption.
We have about 20 measures. Four or five of those are related to quality: the security and safety of passengers. Four or five of them are related to the quality of the experience, the punctuality, the baggage performance and so on. One of them is financial, but 19 of them relate specifically to the delivery of service to passengers, security, comfort and all the rest.
Q159 Gavin Shuker: My maths isn’t great, but with those 19, and there are four terminals-I think there are numbers available, and that is 76. How many of those did you fail in December?
Colin Matthews: I don’t have it in front of me, and I could send you a copy of that, but probably half of those would have been dramatically failed in December. I think the point that Steve Ridgway was making was with respect to those ones that are included within the regulatory settlement, and perhaps the security queuing, which is one that has a specific financial penalty associated with it. In the event, that would not have been one that suffered in December. I completely agree that we need an updated regulatory framework. We should choose the right measures that reflect passenger experience and the airport should do less well if we do a less good job and the airport should do better financially if we give a better service to passengers. That is very straightforward and common sense.
Q160 Gavin Shuker: I will confess. I did know the answer to the question before I asked it. There are four measures on which you failed under the regulatory arrangements. One was for seats in terminal 3. The target was 3.8 and you got 3.7. One was security queues of less than five minutes. In terminal 3, 95% was the target and 94.3% was hit. Pier service in terminal 5 was a 92% target and 82% actual. Then, for preconditioned air in terminal 5, 98% was the target and 87% was the actual. I appreciate your frankness in saying that we need an arrangement which measures the right things. Do you believe these are the right things to measure?
Colin Matthews: I think we could have a much better suite of measures. Those are ones that were decided some years ago. In the case, for instance, of pier service in terminal 5, we are opening in a few weeks’ time terminal T5C. That will increase by 33% the number of flights that are served from a terminal instead of remotely. That was a measure that was inevitably going to be missed until we built the third satellite. That will be opened in a few weeks’ time. But, no, I agree, based on what we know now, for sure, we would choose a different suite of measures.
You referred to terminal 3. While we are building the new terminal 2, terminal 3 is particularly congested. It is a particular problem to make sure that we have a great service for passengers. We are refurbishing terminal 3. We have just completed a new development of the arrivals. If you can remember back to a time when arriving you would have sticky carpet in the immigration hall, we don’t have sticky carpet any more. We have a bright, crisp, environment. It is better, but until we have a new terminal 2 open, we are going to be very constrained on terminal capacity at Heathrow. We are constrained, and in the short term we need to concentrate on making the best experience for passengers despite that constraint.
Q161 Gavin Shuker: The result of failing these metrics obviously is a rebate to the airlines.
Colin Matthews: Yes.
Gavin Shuker: How much did you pay in rebates in December 2010?
Colin Matthews: I don’t have that figure in my mind. To be honest, though, my principal concern in December was not the rebates. It was getting passengers where they wanted to be. We did not hesitate for a second to spend every penny that we possibly could to resolve the problems of stranded passengers, to get passengers moving again. That is something the airport has never done before. The airport has never provided accommodation or food before. It has never provided laptops to help passengers rebook with airlines or credit cards to our staff to allow people to buy nappies for people. We were doing thousands of things that an airport has never done before because the scale of the disruption was so huge it utterly overwhelmed the ability of us and the airlines particularly, who have that specific responsibility for care for stranded passengers.
Q162 Gavin Shuker: By my maths, you paid the sum of £501,000 back to airlines, but you reported a loss of £20 million as a result of the snow disruption at Heathrow. If that is, I guess, just 5% of the amount of money that you lost, where did you lose that £20 million?
Colin Matthews: About two thirds of that was from lost revenue.
Q163 Gavin Shuker: That is retail sales, presumably.
Colin Matthews: No, it is not. Just like any other business, if we don’t provide the service we don’t get paid. If passengers don’t take off, we don’t get paid. We didn’t get paid. That is the biggest amount. The second amount that is big is the cost associated with more consumption of antiicing products than we have ever dreamt of consuming before. December, in total, was the coldest month at Heathrow since 1890, when records began. So we have been consuming those products more dramatically than ever before. We were spending money, as I have described, on accommodation and food for passengers, laptops, free parking, you name it-everything we could possibly do to relieve the situation for passengers. On the scale of things, therefore, the £500,000 you have referred to being the regulatory rebate was a relatively small proportion of the total very expensive cost to us of the December disruption.
Colin Matthews: I accept that we need a new regulatory framework, and we have been working actively with Government to achieve that, but I don’t accept that we escaped any kind of pain from December’s disruption. It cost us £20 million. That is a very, very large amount of money for any organisation. It is a very large amount of money for us.
Q165 Chair: Are there any outstanding claims from airlines with either of you, Mr Matthews?
Colin Matthews: In the current arrangements, I don’t think airlines have a basis for financial claims against us.
Q166 Chair: But are they making any claims against you of which you are aware?
Colin Matthews: We have received some letters, but I do not think airlines have a basis for compensation claims against us.
Q167 Chair: Mr Wingate, are there any outstanding claims?
Stewart Wingate : We have no outstanding claims.
Q168 Mr Leech: Mr Wingate, you mentioned in answer to a previous question that you had spoken to people at other airports. I think you mentioned Scandinavia and Germany. What lessons have you learned from those discussions with those other airports?
Stewart Wingate: The airports that we have spoken to are Oslo, Stockholm, Helsinki and Munich. We have not just spoken to them: we have actually visited the airports and done extensive benchmarking with management teams from those airports. We have even had management teams of those airports review our current snow plans and snow arrangements in terms of how we manage snow events. We had significant consultation on our findings from the benchmarking that we did in the summer of last year.
With regard to the key changes that we have put in place, the first one is that at Gatwick, looking at all the occasions of snow during December, the first occasions early in December were significantly worse both in terms of quantity and the length of time that it continuously snowed for, compared to the middle of December occurrence, which was actually a short, sharp deposit of snow.
We have ensured at all times that we have 24/7 senior management attendance on site, including myself, the executive team and all the senior operational teams. Clearly, that happens at other airports across Europe. Importantly, we created a new crisis control centre which we called silver command. That operated 24/7 and was established well in advance of the snow actually falling. It was established when the forecasts made it clear that it was very highly likely that snow was to fall. We learned the benefits of early and decisive decision making to inform passengers to travel or not to travel to the airport in the event of bad weather and we put that into practice. We learned new operational procedures, particularly around clearing the stands, clearing the taxiways and the aprons and not just focusing on the airfield.
We invested in new equipment, £600,000 in all during the course of the summer, and a further £8 million was invested on 3 December. That bought us new equipment. It doubled the de-icer storage, the actual medium storage that we have at the airport, taking our capability to over half a million litres, and we refurbished our snow fleet. We also learned a lot about how we go about communicating to the press and the media, and to that extent we ensured at all times that it was only senior executives of the business that presented the facts to the media during the course of December. We learned a lot and we put it into practice.
Q169 Mr Leech: What temperature does your de-icer work until?
Stewart Wingate: We have two different de-icers that we use. We have an acid-based de-icer which we tend to use in the range of round about freezing up to 3° or 4°, and then we have a glycol-based product which is effective down to about minus 10°. So we hold stocks of, primarily, two de-icing mediums.
Q170 Mr Leech: I think I am right in saying that, during the cold weather in the winter, some areas had temperatures significantly lower than minus 10°, certainly in Scotland.
Mr Harris: We usually do.
Mr Leech: You usually do- yes, that is very true. What would happen if the temperature went down to minus 15°, minus 20°? How would you deal with that?
Stewart Wingate: This is where it is absolutely critical operationally in the snow plan, first of all, to apply the right material based on the temperature. This is a very important point. That is why we heavily used the glycol-based product at Gatwick throughout the December periods, because our temperatures typically were ranging between about zero and minus 12° throughout the period. Had we used the acetate product, we would have been in trouble, because that would have simply frozen like water. So it is a very important point to say that you use the right material. The second point is that it will actually melt the ice when you apply the glycol-based product in that temperature range, but then, importantly, you have to sweep the water away from the airfield and literally suck it off the airfield before the temperature drops further. If the temperature drops further and you haven’t got the medium off the airfield, then it will freeze, simply as your freezer would freeze in your kitchen.
Q171 Mr Leech: But if, before you get the opportunity to clear the airfield, the temperature drops below the temperature at which the de-icer will work, what do you do?
Stewart Wingate: You have to de-ice the airfield ahead of a snow event happening. That will minimise the chance of the snow depositing and lying on the ground. You then have to clear the snow, and as the temperature drops you just have to deploy your resource simply to sweep and suck the water from the airfield. If the temperature plummeted so fast that that simply wasn’t possible-it is quite a hypothetical question, I suggest-then it would freeze.
Q172 Chair: Ms McMillan, can you tell us what happened in Glasgow?
Amanda McMillan: We had regular temperatures beyond minus 10° and they fell as low as minus 15° and minus 16° on the airfield. As Stewart describes, we do not tend to wait on the eventuality. We proactively spread de-icant based on weather forecasts. If we know it is going to be extreme temperatures, then we will actively de-ice the runway so that we avoid the scenario that you describe. The challenge for all of us, I think, is to hold the right quantities of de-icant based on weather predictions. Certainly, at Glasgow this year, we increased the resilience by having greater tankage of de-icant on our airfield so that we could survive longer periods of time, because one of our biggest hurdles this year was trying to get de-icant stocks to the airfield. There were competing demands for it across the UK, and also the transport system was under serious strain. Your original question was how airports provide the maximum degree of certainty that they can cope. It is around pre-planning, weather forecasting, active management of the airfield and using the right products.
There is another angle on de-icant, which is aircraft de-icant. We did have problems this year in Scotland because, once you go below minus 15°, the mix that is used by airlines can be too weak to de-ice the aircraft. They essentially dilute it and make it a ratio of compound. That needed to be changed this year because of the temperatures. So there is constantly learning here. The weather even in Scotland-I saw Tom nodding there-can be very different. We have got to learn lessons as well.
Q173 Mr Leech: But, effectively, you are quite reliant on good forecasting.
Amanda McMillan: Absolutely.
Q174 Mr Leech: How reliable has forecasting been over the last few years? Clearly, forecasting is getting better generally as technology improves, but how many occasions have there been in the last, say, of couple of years whereby a weather forecast has been wrong and you have been caught unawares?
Stewart Wingate: If I may start on that, in terms of shortterm forecasts we take feeds from the Met Office and Hubcast, and we have them broken down into quarter hour segments. We have very accurate shortterm forecasts and we certainly had no problems at Gatwick over the last year with the shortterm forecasts.
Where it becomes more difficult is when you try to predict the weather for the future. That is why, when we took the bold decision to invest £8 million of additional investment and equipment, we couldn’t base that on any longterm forecast but simply on the weather events that we have seen in our first year of ownership.
Q175 Chair: Mr Matthews, are the weather forecasts good enough?
Colin Matthews: I would answer as Stewart did. We have different feeds on weather forecasts. They do not always agree. In the short term they are reasonably good. Sometimes the weather forecast changes rather rapidly. It did just prior to December 18 as a matter of fact, moving from a suggestion of 5 cm of snow very rapidly to more. It is certainly vitally important that we have the best forecasts we possibly can, but they are never going to be perfect.
Q176 Mr Harris: Mr Matthews, I am quite sure that everyone, in December, was delighted about the removal of sticky carpets in terminal 3, but it is not much of a consolation for those passengers who were told that flights were cancelled when in fact they were boarding and taking off. Would you agree that communications isn’t your strong point?
Colin Matthews: We need to improve our ability to communicate dramatically. In order to do that, I think we need to have much closer integration between airlines and airport. The key bit of information which we had to generate was a reliable list of which aircraft were going to leave and which ones were not. Until we were at that stage, everyone was coming to the airport hopeful that their aircraft was going to go. As a result, on the Sunday, we had so many passengers in terminals 1 and 3 that, literally, we couldn’t allow more through the door. That was a terrible position to be in. Subsequently, on the Sunday night, we reached agreement with airlines to plan in advance which aircraft were going to leave and which were going to be cancelled, and then you could tell passengers before they came to the airport whether their journey was going to be productive or not.
Q177 Mr Harris: You are ticking a box here, "Yes, of course we need to improve our communications." You are also saying you couldn’t have done anything differently. Is that right?
Colin Matthews: There are always things we could have done better. I am sure the report that David Begg is making, without question, will point to things that we could have done better and we need to do better in the future. The key element that drove our problem of having the terminals overfull of passengers was not having on the Saturday or the Sunday a reliable list of which flights were going to depart and which ones were not. Therefore, all the passengers were coming to the terminal, and, although the terminals are big, they are not big enough to house a whole day’s worth of departures if no one is leaving them. Therefore, we need the ability to pull together with airlines. As the airlines said, and I completely agree, we have to be able to have an authoritative version of an emergency timetable, if you like. That is something which is put in place in the rail industry, and we need to be in a position quickly, and indeed before the snow event, if the forecast is clear, in a realistic time frame. In that way passengers reliably can know that their aircraft is going to go and they come to the airport, or they know that it is not going to go and they won’t come to the airport.
Q178 Mr Harris: We heard from the previous witness that the announcement was made on the media that terminal 3 was closed. As that announcement was going out, planes were being boarded and taking off and people who were heading for terminal 3 to catch their flight turned round and went home. When the message went out that terminal 3 was closed, that was clearly a false statement. Have you satisfied yourself about what process led to BAA giving information to the media which was not true? Did BAA know at the time it wasn’t true? Did they only discover afterwards that it was not true?
Colin Matthews: Actually, the message was accurate. Unfortunately, terminals 1 and 3 were so full of passengers that we literally could not, in a safe way, let more passengers in. Of course, the way to relieve that is to make sure aircraft depart with passengers on them. It is a wholly unacceptable position to get to, but the message was not false. We could not let more people into terminals 1 and 3, because they had more passengers in them than we could safely care for.
Q179 Mr Harris: So, looking back, there is nothing you would have done differently, is there?
Colin Matthews: There are many things we would have done differently, the most important of which-
Q180 Mr Harris: I am really asking about communication, and the relationship with the media. In terms of communicating with the media and the airlines, you seem to be saying that you are satisfied that everything you needed to do was done.
Colin Matthews: I am not saying that. We certainly could have done better and will do better in the future, but the key-
Q181 Mr Harris: Can you give me a specific?
Colin Matthews: The key driver is the one I have given you. We need to be able to agree with airlines which aircraft are going to go. That is the heart of passengers having accurate information. "Is my flight going to leave or not?" Everything beyond that is secondary. If the flight is going to go, of course they will come to the airport.
Q182 Mr Harris: Why wasn’t that done? Whose fault was it?
Colin Matthews: It has never been done at Heathrow before. It has never been done at any airport before. We do not have the routine of an emergency timetable. We suffered the experience of the volcanic ash closure earlier on in the year. That was the first time this was discussed-it was discussed. We put it in place during the Sunday, and clearly it would have been better if that had been ready on the shelf, polished, to be produced on the Saturday. In the event, it was ready on the Sunday night. So, from Sunday night, I could stand up and say, "Check the BAA website. If your flight is listed, it is going to go. Come to the airport. If it is not listed, please don’t come because we have more people in our terminals than we can look after."
Q183 Mr Harris: So, with seven months under their belt, the airline industry has learned nothing at all from the volcanic ash eruption. Nothing has changed. Despite that peculiar, unusual, unique event, when emergency timetables were introduced, seven months later you have learned nothing at all from that experience.
Colin Matthews: The Sunday in December was the first time that we have agreed and implemented an emergency timetable. That was done voluntarily. There is a good question as to whether in the regulatory framework there should be the ability for someone to impose an emergency timetable. That is the case in the rail industry. I am not saying necessarily that it should be us or it should be the CAA, but there is a very good argument for someone being able to design an emergency timetable which isn’t simply done because 95 airlines agree. By the way, getting 95 airlines to agree on something is remarkably difficult. There is a good case for having something more rigorous, more planned, whereby an emergency timetable can be imposed very, very quickly. It took us until Sunday. It has never been done before. We pulled it off on Sunday. It would have been better if that had been done 24 hours before.
Q184 Mr Harris: Are we talking about the volcanic eruption there or are we talking about last December?
Colin Matthews: December.
Q185 Chair: Who should be responsible for imposing an emergency timetable?
Colin Matthews: It could be us; it could be the CAA. That is something which senior people in Heathrow should discuss, and I am open to other people’s views on that. It would improve the passenger experience. Faced with the threat of disruption, given that Heathrow is so full, if we knew that tomorrow we were going to have only 75% of the capacity available and we could say that tonight so that passengers could check on their website, that would lead to a better passenger experience. At the moment we do not have the authority to do that and passengers would be better served if we had those arrangements.
Q186 Chair: Mr Wingate, what is your view about powers to impose an emergency timetable?
Stewart Wingate: This is perhaps a peculiarity to Heathrow. From a Gatwick perspective, I have spoken to my major airlines, and there is little desire to have an emergency timetable. The thing that worked well at Gatwick in all of the snow incidents during the course of December was the fact that senior representatives of the airport and the airlines sat in the same room with the same information and collaboratively made decisions concerning the operation but also concerning decisions to communicate as well. We spoke with one voice at all times, and we spoke ahead of the snow events happening, to passengers. As a result of that, we managed to minimise the number of passengers who came to the airport and the number of passengers who were stranded at the airport. At no time did we have more than 500 passengers at the airport on an evening.
Q187 Chair: How was it, Mr Matthews, that the airlines didn’t know about the reopening of the second runway until the Prime Minister announced it? How did that happen?
Colin Matthews: The reopening of the second runway was driven by several different factors, one of which was the fact that we had the northern runway open and what was limiting our ability to dispatch more aircraft was not having a second runway open; it was clearing the stands. So we focused all our resources on clearing stands, because that was the limiting factor.
The second thing is that, on the Saturday and the Sunday, passengers had an overly optimistic expectation of how many flights were going to depart. That meant there were more passengers in our terminals than we could look after. We were very anxious not to reproduce that and made sure we were cautious in the rate at which we could bring the new capacity on track.
The third thing was that the wind direction changed, and when the wind direction changed we would have had to clear new taxiways to get on and off the northern runway. In order to avoid shutting the airport completely, we therefore cleared the southern runway. The decision to open the southern runway was driven not just by one simple factor but by several different factors. The decision, in fact, was taken intelligently at the right time. That decision was taken by us, and the key driver in the event that triggered the moment was a change in wind direction.
Q188 Chair: But how could the Prime Minister know before the airlines?
Colin Matthews: I don’t know how that came about. We certainly were being encouraged by everyone, naturally, to open the second runway, and I was concerned to make sure that we focused our resources on the things that would deliver the most flights for the most possible passengers. For a period of time that meant clearing stands, not opening the second runway. As soon as the second runway became the critical factor, then we put our resources on to that and cleared it relatively quickly.
Q189 Chair: But I am still curious about the Prime Minister knowing more than the airlines who are actually working there. Was somebody leaking information?
Colin Matthews: We kept in touch with many parties throughout, right from the period before the snow and through it, including Government. In fact, on that Tuesday, the Secretary of State was in Heathrow and he was looking at our crisis centre, seeing how we were managing it, and so he was close to the events on that day. We were keeping the Government involved throughout the whole days. Equally, I was talking regularly to airline chief executives as events unfolded. So, yes, we kept the Government closely informed about what was happening and we did our best to keep the airlines informed.
Q190 Chair: A general " closely involved " policy is a bit different, isn’t it? It is rather different from some very important operational information not going to the airlines whose business is this.
Colin Matthews: We do need to build a tighter engagement with the airlines. We set up our crisis management arrangement on the Friday afternoon. That crisis team has systematically implanted within it representatives from the airlines.
Q191 Chair: The airlines have given a rather different account of it and they thought the crisis teams met later. Is this an area-
Colin Matthews: They are referring to setting up a particular discussion with the airlines that led to the agreement of that emergency timetable. That happened on the Sunday, and as I have said, I would have preferred if we had been in a position to roll it out quicker on the Saturday. Our crisis mechanisms routinely have airline representatives embedded within them. I have no doubt that out of this event we need to improve the coordination with airlines. We definitely do. The coordination of information and communication is one of the key elements that we need to get better, I completely accept that, but it is not true to say that it was absent. We need to make it better.
Q192 Paul Maynard: I am sorry I was late. I had a clashing appointment thanks to the Table Office. Can I ask Mr Matthews to what extent he believes the travails that Heathrow experienced were down to Heathrow operating at 99% capacity?
Colin Matthews: One way in which our shortage of capacity definitely influences it is that, given a certain amount of disruption, the effects and the consequences are bigger and longer at Heathrow than elsewhere, because we have no spare capacity as we would, say, in Glasgow, for which Amanda is responsible, to fly extra flights. An aircraft takes off and lands roughly every 45 seconds throughout the day, so once disruption starts, it takes longer to get over the effects and recover the situation.
Q193 Paul Maynard: There is probably no answer to this, but is there a level of capacity at Heathrow that would allow you to demonstrate greater resilience if you were-to pluck a number from thin air-at, say, 75% capacity? Would that enable you to cope better?
Colin Matthews: If I may, a much more effective way would not be to reduce the flying on 365 days a year, because in Heathrow last year we would have had perhaps 10 days of disruption, and 355 days of normal service. Much more effective would be a reduction by 50% on those 10 days rather than a reduction across 365 days. The ability to agree and impose a reduced schedule when that is necessary would give a far better benefit for passengers than it would be to, say, have 95% or 90% or some number of percentage utilisation throughout the year.
Q194 Paul Maynard: Is your difficulty over achieving collaborative working which you have identified the inhibitor to an emergency timetable, and how can you improve the links with the airlines, who are, of course, your customers?
Colin Matthews: It is a good point. We have about 95 airlines at Heathrow, and if you take the interests of all of them together, clearly they would agree it is better to have a planned reduction, but if you look at the interests of one specific airline, their motivation often will be, "I will do whatever I can to get my aircraft away, get the passengers to the aircraft, get them loaded and find some way to escape." That is perfectly logical. That is the history of how Heathrow operates. If you like, we provide the capacity and there is a kind of free-for-all whereby airlines make the most they can on behalf of their passengers.
I understand why we are where we are, but it would be better in times of disruption to be able to get an executive grip of what happens and not have that free-for-all. It is relatively easy for me to talk to the three chief executives of the three airlines that are based in the UK. It is much more difficult for me to reach the other 92 airlines that are spread around the world.
Q195 Paul Maynard: There was great concern over overcrowding in the terminals and the consequent impact on passenger welfare. It has been suggested to us that sections of the airside could be declassified to provide extra space. Is that a helpful or a sensible suggestion?
Colin Matthews: To some extent that did happen. One of the characteristics that is difficult for us in disruption is that the baggage system works well in one direction; it doesn’t work well in the others. We did change the boundaries so that we could get baggage out of the system again and passengers could have access to the carousels, which are landside and not airside. So, yes, there are some ways in which we can do that, but I think, with respect, that the impact of that is modest. We have 100,000 departing passengers on a day, actually more on that weekend because it was a particularly busy moment. If 100,000 passengers come to the airport and none of them depart, whatever we do, the situation in the terminals is going to be unacceptable. We have, therefore, to be able to get a grip of the schedule in advance of such events.
Q196 Paul Maynard: Finally, at the height of the negative publicity-and this is to both Mr Wingate and Mr Matthews-the Government postulated the idea of snow fines, or fines if an airport failed to respond adequately to a period of adverse weather. Have you had any further contact from the Government exploring that issue further?
Colin Matthews: I think the context would be the new Airport Economic Regulation Bill which is currently being discussed. That would enable the updating of the regulatory framework and it would be good to have a suite of measures that reflects customer experience on an end-to-end basis for their time at the airport and to make sure that an airport does less well if we do poorly and the airport does better financially if we offer good service. We are in favour of that change and the sooner the better that we can get on with that.
Q197 Paul Maynard: Would you agree, Mr Wingate?
Stewart Wingate: At Gatwick, we have undertaken to consult with our airlines in advance of the Airport Economic Regulation Bill going through. During the course of this coming summer, we will look at the service level commitments that we make to our airlines and we will talk to the airlines to see whether it would be appropriate for us to put into the service level agreements between us our response to adverse weather conditions. We will do that on a voluntary basis.
Q198 Chair: Should the Government have rights to be more involved at a time of national crisis like bad weather?
Colin Matthews: I think the most important role of Government is to set policy and make sure that the regulatory framework is right. It should be down to us as operators, the airport, airlines and others, to make sure that we then operate within that effectively. I do think there is a role, as I have described already, for agreeing that someone, particularly at Heathrow-I agree it is a Heathrow preoccupation because of the constraints on our capacity-has some authority to impose an emergency timetable. But the Government should be responsible for policy and the right regulatory framework.
Q199 Chair: Who should that someone be?
Colin Matthews: I think aviation policy is going to come from the Department for Transport, quite appropriately.
Q200 Chair: Yes, but on imposing an emergency timetable.
Colin Matthews: I think that is for debate. I am not saying it necessarily should be the airport; it could be. It could equally be a regulator.
Q201 Chair: Mr Wingate, what is your view about Government powers in situations of great difficulty like disruption caused by bad weather?
Stewart Wingate: When we look at the snow that we had at Gatwick, the first event in the early part of the month was extreme and something that we are unlikely to see in the future-at least we very much hope not. We had not seen it certainly for the last 30 years. In the middle of December, when we did have the 10 cm of snow and it fell very quickly, we had the airport operational again within five hours. So we don’t really see a significant role for Government needing to be involved in the way in which we, the airport operator, take accountability and responsibility for recovering from the adverse weather.
Q202 Chair: What about the role for Government?
Stewart Wingate: The role for Government is to set up policy frameworks, as Colin described, and then for us to work within those. Specifically, in terms of us dealing with our airline customers, we at Gatwick are competing. We are competing with other airports around the London region. We are also, with our low-cost carriers particularly, competing across Europe. We feel that the work we do directly with our airlines will determine the success of the airport. From the change of ownership, we have worked very hard, both on our approach to snow but also our approach to service in general across the airport, to significantly improve our performance.
Q203 Chair: What do you expect to come from the Begg report, Mr Matthews?
Colin Matthews: The Begg report is intensive and thorough, and I have no doubt there will be a number of things that it suggests we should do better. I can give you a list of the things we have already done, if you like. It is a long list, but if from the Begg report there are more things we should do, we will do more.
Some of the topics have been discussed already. Clearly, the ability to give good information to passengers is a critical one. Clearly, the ability to plan better the overall operation ourselves and airlines together in disruption is a critical one, and, as soon as we have the report and can study it carefully, we will take whatever steps it suggests in order to improve Heathrow for our passengers.
Q204 Chair: Do you think the inquiry is sufficiently independent?
Colin Matthews: All of the panel members are external to BAA. It is chaired by a nonexecutive director of BAA but someone who has only just come on the board. He is objective and has not been implicated in history. I think it has the right skills and can do a good job for us.
Q205 Gavin Shuker: Mr Matthews, I am sure you would agree that it is very important not to prejudge the outcome of the Begg report before it is published.
Colin Matthews: Indeed.
Q206 Gavin Shuker: On 11 January 2011 you issued a press release, the title of which was, "We’re sorry, but Heathrow did all it could." How do you feel that fits in with the concept of not prejudging the outcome?
Colin Matthews: We had severe disruption in December. I set up the Begg report as quickly as I possibly could and they are doing their work swiftly. It will, though, be probably the end of this month before we see the final report. You are right: I can’t prejudge the outcome of that, but nor did I sit and do nothing. We have bought more equipment, we have trained more drivers, and all that list of topics. I can’t stay silent on the things that I think we have done. We did do all we possibly could for passengers. We did things for passengers that I don’t think any airport, certainly Heathrow, has ever done before. In a strict sense, it is airlines who are responsible for looking after stranded passengers. If airlines had strictly fulfilled their legal obligations, we wouldn’t have done anything; we wouldn’t have had to. But it is clear that the scale of the disruption vastly overwhelmed the totality of the resources at Heathrow from the airlines to cope with passengers; therefore we stepped in. We did do everything we possibly could to relieve the situation for passengers. That didn’t change the fact, though, that many passengers spent extremely uncomfortable nights in terminals that are not designed for people to spend nights in, so I do understand how painful it was.
Q207 Gavin Shuker: The big idea that you appear to be talking about is the introduction of an emergency timetable enforceable by an external body or by yourself. Is it not the case that that involves cancelling airlines’ services? In a sense, the big idea is to try less hard when we have these problems.
Colin Matthews: No. I think it is absolutely critical and the decisions need to be right. Airlines have the same interest in making sure that their schedule is reliably delivered, and some airlines have, in the past, been effective in advance of cancelling flights because, by cancelling flights before the event, there are less disruptions and quicker recovery afterwards. For the whole of the Heathrow organisation to do that together would be beneficial, but, with respect, I don’t think that is the big idea. It is one aspect of the big idea.
The big idea is that passengers benefit when the airport and the airlines effectively collaborate, and we need stronger mechanisms for collaboration between the airports and the airlines. I am setting up this new group, which I hope will be effective, of a small number of chief executives, who can and will take a lead consistently on the topics which passengers care about. We do have disruption at Heathrow. It happened from snow and it also happened from ash. It may not be snow next time. Our point is to be able to respond to whatever crisis comes back effectively together with the airlines. The big idea is collaboration with the airlines and making sure that whatever regulatory changes happen encourage better collaboration, because collaboration is in the interests of passengers.
Q208 Gavin Shuker: On Begg, will you see the findings at the same time as the other contributors or will BAA have an advance view of Begg before other people get to see it?
Colin Matthews: It is a report that I have commissioned and therefore I will see it. I have undertaken that we will publish it.
Q209 Gavin Shuker: Just briefly and finally, Chair, I want to talk about the second runway-the southern runway. What capacity can you operate at when you are just operating on the other runway?
Colin Matthews: At 50%.
Q210 Gavin Shuker: It is 100% with the second runway.
Colin Matthews: Yes.
Q211 Gavin Shuker: It is 100% theoretical capacity that you have available to you. That is very helpful. Was it No. 10 or was it the Secretary of State that got on the phone and told you to open the second runway?
Colin Matthews: It was neither.
Q212 Gavin Shuker: Finally on the second runway, how helpful was the Prime Minister’s intervention that they could release the Army to clear the second runway for you?
Colin Matthews: It was a welcome offer of help, but it was made on the Tuesday, and by Tuesday we had cleared the snow, so I wasn’t able to accept it. I do not want that to sound churlish. We would have accepted help from any source. We did get much external help in. We more than doubled our resources with additional contractors coming from outside as quickly as we possibly could. We were taking help from wherever we could. That particular offer of help, which was welcome, in the event we couldn’t use because it came after the snow was cleared.
Q213 Gavin Shuker: Forgive us. We politicians have devious minds and we might interpret that as a statement of the Prime Minister parking his tanks on your lawn to get the second runway open. Did you interpret it in that way or did anyone in your organisation interpret it in that way?
Colin Matthews: We were focused on one thing and one thing only: how quickly can we get passengers to where they want to be for Christmas? For a period of time, the most effective way of doing that was to focus all of our resources on clearing stands. There came a moment on Tuesday afternoon, when the most important thing to do-it was a shift in wind direction that caused that-was to open the second runway. The minute that was the case we opened the second runway.
Q214 Chair: What arrangements are there for you to coordinate with road and rail authorities to keep access to the airports open? Mr Wingate, have you got any arrangements to do that?
Stewart Wingate: For us, this is a key issue as we look to the future. We have now made a significant investment in the additional snow fleet at Gatwick. We know that our capability to respond will be significantly improved now as we go forward to clear the airfield. For ourselves, if we look back to the events on 1 December, we did have the airfield clear of snow on the afternoon of 1 December and it could have been operational for aircraft, but we chose to keep the airport closed because there were no rail services operating to the airport on 1 December or 2 December, and over 40% of our passengers travelled to and from our airport using rail.
Going forward, we will be able to respond significantly quicker ourselves and we now are working very closely with Network Rail, Southern and First Capital Connect on the rail side of surface access, as well as the Highways Agency, because this is something that does trouble us and we are concerned about for the future.
Q215 Chair: Does that mean you are satisfied with the current arrangements or you still have concerns?
Stewart Wingate: No, we still have concerns going forward.
Q216 Chair: Mr Matthews, what is your position?
Colin Matthews: I think our connection with the local authorities is good. I was very recently with the chief executive of one of the boroughs and that was a topic we were discussing-the offer of help in one direction and another to clear the roads.
It is true that, in December, it is the first time there has been so much snow that the M4 spur road, for instance, was shut for snow. That was a factor that added to the difficulties we had on that Saturday afternoon. Clearly, having the airport open and not being able to have passengers come or go by road or rail will lead to huge congestion. I think we have adequate means of coordination between us and local authorities on the question of road clearance.
Q217 Chair: So you don’t think there are any problems on that in the future-road and rail?
Colin Matthews: In terms of coordination, no. One of the questions for us is that we planned for 6 cm of snow. We got a great deal more than that. How much should we plan for in the future? Should we plan for 10, 15, 20 or 25? It is a question not just for Heathrow but for infrastructure in the London area in total. If we are prepared for 25 cm of snow, then presumably the roads round about, the rail and the other infrastructure should have the same planning assumption in their mind too. There is no point in having one clear and the other closed. It is a question for the south-east in general as to how much snow we should prepare for. The climate experts still seem to suggest that, on average, winters are getting warmer, but extreme events may be more frequent. In that case, we will have to be prepared for more snow than we have in the past, but how much is that? Is that 25 cm? If so, is it agreed with road and rail? It would be better that we had a common view of that for the south-east of England.
Stewart Wingate: For ourselves at Gatwick, this is a key area which we will be working on during the course of this coming summer because the disruption that we suffered in the early December event on rail was significant. The snow fell during the course of 30 November and the airport was shut on 1 and 2 December. The rail services did not return to normal until 5 December. I myself, travelling to the airport, took 13 hours to travel 40 miles on the M25. These are significant issues which will have to be taken into consideration if we have future snowfalls before we make the decision to open Gatwick Airport.
Chair: Thank you very much for answering our questions.
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