bmi tells Government Capacity Views

bmi today called for Britain’s airport expansion strategy to be used “as a tool of competition policy, which should deliver greater choice and benefit for future generations of travellers”, as it outlined details of its submission to the Government’s 30-year capacity consultation.

The airline laid out three key elements to its submission, at a press conference in London this morning.Ê It is calling for expansion of the nation’s most congested airport, Heathrow, through a new third runway; new operators to construct and run new facilities at Heathrow and other congested airports; and a ‘pay for what you get, not what you’re going to get’ rule for charging for new airport facilities.

Sir Michael Bishop, chairman of bmi, said:
“bmi has been a driver of new competition in the air industry for thirty years.Ê We were the first real competition to the national flag-carrier, the first real competitor on Europe’s trunk routes and the true pioneer in delivering affordable air travel for millions of new travellers.

“From long experience, we know that one of the greatest blocks to competition is airport congestion, particularly at Heathrow.Ê Our nation needs a world-class hub airport and without a new runway at Heathrow, there is no feasible way we will achieve that.

“Many other options have been raised but this process should be driven by an “expansion where expansion is needed” approach - and that means new runway capacity at Heathrow.Ê We therefore strongly support the introduction of mixed mode operations in the short term and construction of a third runway in the long term.Ê But this cannot be expansion at any price.”

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bmi also called for any new development around Heathrow or other congested airport sites to be managed by alternative operators, creating a competitive environment in the management of airport capacity.

Sir Michael said:

“We have had strong and positive relationships with BAA for more than 30 years.Ê I have great admiration for their skills in airport management and I believe we have played a significant part in their development into one of the most successful PLCs in the country.Ê Over the last three decades, no airline has consistently grown its business with BAA more than bmi.
“But the temptations of a monopoly position are strong indeed.Ê And recent events suggest that BAA has succumbed.

“The T5-based increase in Heathrow landing charges - 40 per cent in real terms over the next five years - means we, or our customers, have to pay for many years for something from which we will see no benefit.Ê Indeed, for significant improvement of our own customers’ facilities we will have to wait a further two years beyond the opening of T5.Ê During periods where comparative facilities are so inequitable, we will expect to see suitable compensatory measures.

“Airlines, and travellers, should pay for what they get now, not what they will get in the future.Ê It is a principle that applies to every other area of business - and Government must ensure it applies here.

“As an airline, we have to put the needs of our customer first.Ê And it is clear from recent events that the current regulation of BAA’s operations does not serve their needs at all.Ê We have therefore been forced to the conclusion that the competitive dynamic around BAA’s position is broken and it must be fixed.

“That does not have to mean the break-up of the company’s South East operation, as others have mooted in the past.Ê But we are asking that Government first consider ring-fencing BAA at its current sites to existing operations - and that the construction and operation of new facilities, including runways, should involve new operators, offering a truly competitive environment.Ê We now have a range of experienced and successful airport operators in this country and they should be given the opportunity to bring their skills to the congested airports in the South East.Ê Only in this way will cost-effective new airport capacity bring the benefits to travellers, and to UK plc, that the Government clearly recognises are needed.”

Sir Michael finished by reaffirming the airline’s commitment that all airport capacity development should be managed in an environmentally sustainable manner.Ê He said: “We strongly support the concept of sustainable development, which takes full account of all impacts - economic, social and environmental - of new airport capacity.Ê We will work with relevant parties over the coming months and years to develop environmental mitigation, compensation and performance improvement measures.”
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