Warped Incentives lead to ‘Heathrow Hassle’ says London FirstJune 25, 2008
Warped incentives have led to ‘Heathrow Hassle’ – poor customer service – at London’s premier airport, says a new report released today by business organisation, London First.
The report, Imagine a World Class Heathrow, launched today identifies key symptoms of ‘Heathrow Hassle’: flight delays, long and unreliable waiting times, deteriorating airport buildings and economic incentives geared to cramming in extra flights and passengers. The new report suggests potential short term solutions and further ideas for debate.
Baroness Jo Valentine, Chief Executive of London First, said:
“Heathrow has been turned from a silk purse to a sow’s ear. Once an asset in attracting business to the capital, it is at risk of becoming a liability. How? For years, Government, policy-makers and the regulator have failed to prioritise the interests of airport passengers.
“London’s international connectivity is essential to its appeal as a business location. In a globalised world, business needs to fly to reach customers and clients. Quite simply, if business can’t fly easily, reliably and comfortably from London, it will go elsewhere.
“While proposals for Runway 3 will undeniably address capacity issues in the long term, we need a better Heathrow now.
“An overhaul of airport regulation is needed to secure tangible and rapid improvement if the reputation of Heathrow and of London is to be restored.”
The report’s main recommendations are:
1. Cut the queues: give responsibility for reducing excessive and uncertain waiting times to one organisation
2. Bring substandard terminal ‘fabric’ back to up scratch: incentivise day-to-day maintenance to keep facilities in good working order
3. Reduce flight delays: re-introduce some breathing space, either by increasing Heathrow’s capacity without increasing usage, or by permitting fewer flights
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Notes to Editors
1. London First has today published its report, Imagine a world class Heathrow, and announced a consultation on the report’s recommendations, to run until the autumn. Download theexecutive summary or full research report.
2. The report’s main recommendations are:
– Cut the queues: give responsibility for reducing excessive and uncertain waiting times to one organisation
– With higher standards, tougher penalties and better incentives – alongside independent monitoring and vigorous enforcement – this will reduce both the overall time from arrival at Heathrow to exit, as well as its variability.
– Bring substandard terminal ‘fabric’ back to up scratch: incentivise day-to-day maintenance to keep facilities in good working order
– Regulation needs to take passenger expectations into account when setting price controls for both capital and operating expenditure. The current arrangement incentivises the airport operator to spend as little as possible on operating expenditure.
– Reduce flight delays: re-introduce some breathing space, either by increasing Heathrow’s capacity without increasing usage, or by permitting fewer flights
– Heathrow’s over-stretched capacity should be used less intensely. This can be done either by reducing the number of flights or by increasing capacity but limiting its use. More headroom in capacity would reduce average delays, variability of delay and cancellations
3. London First is a business membership organisation whose mission is to make London the best city in the world in which to do business. London First undertakes this by mobilising the experience, expertise and enthusiasm of the private sector to develop practical solutions to the challenges facing London. London First also seeks to persuade central and London government to make the investments that London needs in its infrastructure.
4. London First delivers its activities with the support of the capital’s major businesses in key sectors such as finance, professional services, property, ICT, creative industries, hospitality and retail. Membership also includes all of London’s universities as well as further education colleges and NHS hospital trusts. London First members represent over a quarter of London’s GDP.