"MPs grill BAA over airport standards"

Friday, November 30, 2007

MPs grill BAA over airport standards
By Alistair Osborne
United Kingdom - The Daily Telegraph


Environmental protesters were forcibly ejected yesterday from a
parliamentary committee's grilling of BAA management over poor service at
Britain's major airports.
 
As BAA chairman Sir Nigel Rudd and chief executive Stephen Nelson prepared
to field MPs' robust questioning over security queues, dirty airports and
the group's capability to invest, campaigners opposed to a third runway at
Heathrow disrupted the Transport Select Committee hearing.

Protesters from action group Plane Stupid revealed T-shirts with the slogan
"No Third Runway", with one screaming at the BAA boss: "Nelson - the future
will judge you." They were removed by police.

Gwyneth Dunwoody, the committee chairman, dismissed the protest as childish,
saying: "If people are so unsure of their arguments that they need to
disrupt a select committee, that says everything about their arguments."

The protest followed evidence from three airline customers - American
Airlines (AA), British Airways and easyJet - in a hearing on the future of
BAA, which owns seven UK airports including the London monopoly of Heathrow,
Gatwick and Stansted.

Don Langford, AA's managing director for Europe and India, contrasted BAA's
tardy reaction to the new security arrangements imposed after last year's
terror plot to that of rival Manchester Airport.

"In the last two years BAA has been less responsive over operational
issues," he said. "Access to senior management has deteriorated."

Mr Nelson took issue with that but admitted: "I regret the frustration over
poor service. We have much to do. We are making progress."

He said BAA's new owner, a consortium controlled by Spanish construction
group Ferrovial, had spent an extra £30m to cut security queues and improve
cleanliness, while next year's opening of Heathrow's Terminal 5 would ease
congestion.

"You can't drag people off the street and put them in a security operation,"
Mr Nelson said, stressing that BAA had interviewed 35,000 applicants to fill
2,000 security posts after laborious criminal record checks and other tests.

MPs quizzed Sir Nigel over BAA's capability to invest, given that its owner
- which bought the group in a highly leveraged £16.3bn deal - has been
forced to delay plans to refinance £9bn of debts. Sir Nigel said: "I think
they have been surprised and shocked by the reduction of 7.75pc to 6.2pc" -
a reference to the regulator's proposed cut in the group's allowed returns
at Heathrow.

"The capital is available," he added. "What I worry about is return on
capital. I think this sends a terrible message to anyone who is thinking of
investing in infrastructure in the UK."

Toby Nicol, easyJet's communications director, called for a review of BAA's
regulation by the Civil Aviation Authority, arguing a formula founded on a
regulated asset base rewarded poorly targeted spending.

"BAA makes a profit margin that would make Tutankhamun blush," Mr Nicol
said. "It's allowed to spend and spend and spend and we are the ones who are
left to pick up the bill."

Why else, he said, would BAA be considering handling A380 super-jumbos on a
proposed new runway at Stansted when no airline planned to fly them there.
"Why are we, the users now, expected to pay for that?"

Paul Ellis, BA's general manager of infrastructure policy, called for the
regulator to impose licensing conditions on BAA. "There's clearly not enough
teeth in the regulatory process at the moment," he said.

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