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Carr: Taming an elephant

Heathrow and the GTAA’s McCoomb add to the case against a dual airport monopoly.


June 6, 2008
By David Carr

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Pickering, the controversial site for a second major Toronto airport, is the two-tonne elephant in the room. Few acknowledge his presence, but we keep feeding him peanuts nonetheless. The Greater Toronto Airports Authority (GTAA) has been understandably silent on the issue.

The elephant can be ignored. Facts can’t. Even if air transport throttled back as a result of an economic slowdown and global frustration over check-in and security hassles, Pearson International Airport will likely hit capacity by 2020. This is especially concerning for the business aviation community, which would face a return to the dark days of metering slots if more airport capacity isn’t added to the GTAA in the next 12 years.

But Toronto should not be locked into a dual airport mono-poly, without first parsing the entrails of the recent London Heathrow Terminal 5 fiasco, along with the GTAA’s outburst against an independent survey of more than 150 airports that reportedly give Pearson low marks for efficiency, placing the authority in the same high-cost neighbourhood that Transport Canada put the airport with its own scorecard.

Of the two, Heathrow is more straightforward. The transfer to the $8.5-billion Terminal 5 was a cock-up start to finish. Sole tenant British Airways will carry the water for the blunder. Two executives have already paid with their jobs and the head count could grow, although a post mortem should sort out how much was the fault of the airline versus BAA plc, the airport operator. First privatized in 1987, BAA, which operates seven airports in the UK including London Gatwick and Stansted, was purchased by Spanish infrastructure firm Grupo Ferrovial in 2006. Ferrovial also holds a controlling interest in Ontario’s 407ETR toll highway through its subsidiary, Cintra.

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In hindsight it was an error to bundle all three London airports in a single package. In the capital at least, BAA’s best days are behind it, for now. In addition to the cleanup in Terminal 5, a rebuild of dilapidated Terminals 1 and 2 will not be complete in time for the London Summer Olympics in 2012. The cracks at Heathrow started to form before Ferrovial, but the infrastructure company financed the BAA purchase on a carpet of debt and is now struggling to restructure in the wake of the global credit crisis. The difficulties are compounded because unlike Pearson, which is one of the world’s most expensive airports, Heathrow, the world’s busiest international airport, is regulated to charge less than its value.

Breaking up the monopoly by forcing BAA to sell Gatwick, traditionally a leisure-travel airport, should create sufficient competition that Heathrow’s pricing could rise to its market value, while an alternative hub would be a break on excessive financing while keeping all facilities up to date and the traffic flowing, as two airport companies compete for airlines and customers.

Here in Canada, the GTAA knows how to execute a textbook terminal transfer. But like everything else the authority does well, it charges more for it. Lloyd McCoomb, the president and CEO, bullied Dr. Tae Oum, a business professor at the University of British Columbia (UBC) to remove Pearson from an international survey that placed the airport near the top of the deck in user charges and close to the bottom in operational efficiency. McCoomb, a former professor of civil engineering, told Dr. Oum that if Pearson was not removed from the survey the authority, “would pursue all means at our disposal to receive fair treatment.” The intimidation tactics worked.

Scott Armstrong, a GTAA spokesman, told Canadian Press that McCoomb wasn’t threatening legal action, but speaking “academic to academic.” Gee, makes you wonder about the tone of letters exchanged by law-school academics. McCoomb says UBC’s findings are “unsupported” and the survey displayed a “total lack of academic rigour.” He may be right. Armstrong wouldn’t return telephone calls.

Clearly, Pearson has never been as efficient as it should. And while most blame can be pinned on an unfair rent burden, not all can. What of the Transport Canada scorecard that supports the UBC survey, reporting that between 2002 and 2006, Pearson handled 79 passengers per airport employee versus Vancouver’s 131? And why transfer such baggage to a second Toronto-area airport?

It is easy to dismiss your critics when you are the only game in town. Less so when you have to fight for every dollar. The UK’s Civil Aviation Authority must decide whether air transport is better served by breaking up BAA’s London monopoly. Transport Canada needn’t let it get to that point in Toronto. 

David Carr is a former editor of Wings. He can be reached at davidjcarr@sympatico.ca


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