17th African Aviation Business Leadership Conference, - A touch of the surreal?

Dar-es-Salaam is this week hosting the 17th African Aviation Business Leadership Conference.

Not a single delegate arrived by Air Tanzania. Their sole aircraft, a Dash 8 300, is impounded by SAA Technical for non payment maintainence bills.

In his opening address Tanzania's President, Mr Kikwete called for more private sector investment in aviation and more cooperation all round. He bemoaned the absence of professional leadership and good management in African airlines. Meanwhile he continues to throw his people's money at the remnants of the once proud state owned Air Tanzania whilst the private sector Precision Air awaits the promised construction of the new taxiway allowing access to their recently completed maintainence hangar.

Has anybody briefed him on the true state of his national airline? It would be a good moment for him now to display the professional leadership he hankers after and to take decisive action over Air Tanzania. Lufthansa Consulting are attendees this week. No doubt they will offer assistance.

(John Williams)

UK Railways, -those German trains , political nonsenses and the need for bold transport policies.

Much steam and smoke has been generated from the UK's Labour Party camp following the award of the contract for the rather late running Thameslink 2000 project.

The terms and conditions attatched to the bidding process by the former government headed by one Gordon Brown, late of these columns, whose two closest henchmen were Eds Miliband and Balls did not create a level playingfield for British companies. Indeed they favoured other non UK EU bidders. It was no surprise therefore when Germany's Siemens, already a supplier of high quality trains to the UK defeated Canada's Bombardier (European HQ:Berlin) who happen to have an assembly plant at Derby. They won fair and square. Indeed some factors were not taken into account but that was down to Labour's own legal stipulations. Once the bidding parameters and conditions were issued to all parties and they had responded there was no way they could be ammended without risking enormous damages being awarded to whoever produced the best deal under them. Labour know that full well although they seem to be telling the public that it's not true.

The next big contract pending is for Crossrail trains to operate on the route being created between Shenfield in Essex and Maidenhead in Berkshire. It was due to open for bidding on much the same terms in December this year. The government has now announced a delay to the process to enable the conditions to be rewritten so as to give companies with building facilities in the UK an equal chance, but no guarantee, of winning thanks to a broader range of considerations.

One would have thought that would have brought widespread acclaimation from the Opposition. How naive can we get? Not so. Anna Eagle the opposition spokesperson shreiks : " If ministers are now saying it's possible to review the Crossrail contract how do they explain why they have cost British jobs by refusing to do the same for the new Thameslink trains as Labour has repeatedly demanded?"

How does one explain to Ms Eagle and colleagues that it was her party who made it unlikely that Bombardier could win the Thameslink contract and it is the wicked Tories (primarily, though the Lib Dems might be in there somewhere) who are now enabling them to bid for the next big one on equal terms?

The whole question of Britain's future transport infrastructure deserves a much higher quality,-and objectivity and veracity,-of debate than it is currently getting. Labour when in power, with Lord Adonis as Minster of Transport,were doing very well at least for rail and aviation. Heathrow's third runway and its rail link to the southern network were both confirmed and would have happened if they had won the may 2010 election. On the railways the country's south-north high speed rail project HS2 was solid and would have been pushed through regardless of screams of pain from the well heeled and well connected London orientated Chiterns "Over our dead bodies" lobby. The lesser but still significant northern triangle electrification project around Liverpool-Manchester-Preston- Blackpool was confirmed .Only the road network needed more thought and investment.

Right now Labour seem to have abandoned the quiet sensible Adonis era in transport and have decided just to pitch in with "yah, boo" politics whenever they see an opportunity. The Tories have been disastrous on aviation by throwing away the Heathrow runway and its southern rail link and promising increases in taxes on air travel planned for next year. So far though they have been much better on the railways, pushing ahead with HS 2 despite noisy and unpleasant hostility from its Chilterns and Oxfordshire local parties (ironically using government money to oppose the government). The moment of courage and truth will come in December when the decision on HS2 is announced. That apart, they are set to produce a paper on other transport plans, including resumed road and motorway building, this autumn. They need to hold their nerve and tough out opposition from within their own ranks and from those out there who see it as green or environmentally desirable that Britain winds down rather than increases its transport capacity. The supporters of that approach would be happy to see the country quite quickly strangle itself in increasingly inadequate and antiquated networks. The visionary Victorians did well in overcoming or bypassing the obstruction to railways and roads put in their way by powerful landowners.

Needed right now are new infrastructure visionaries and high level, well informed debate followed by action (that's called building) rather than more studies, enquiries and the like so beloved of British beaurocrats,naysayers and indecisive politicians. Layers of obstacles across the tracks, roadways and runways have to be challenged and reminded of what the country would have looked like (very poor for those who didn't get it) if the Victorian planners had been less persistant.

City Checkin on the way back? Some people are thinking about the customers.

Some remember with nostalgia the days of BOAC, BEA, British Eagle, British United,Pan Am and others Central London checkin. First introduced by BOAC (All over the world we take good care of you) in its wonderful art deco style towered building in Buckingham Palace Road, it was the entry point to a much more relaxed style of air travel. Once there and checked in, the passengers' pre flight hassles were largely over.From that point they were either taken effortlessly to the airport by coach (each flight had its own),or, in flying boat days by train from the building's own platform. Airlines large and small across the world had similar city centre arrangments.

Unfortunately as airport terminals improved and accountants became more powerful these became just too tempting a target for cost cutting and nearly all disappeared from the scene.

Encouragingly for those interested in genuine service and meeting passengers needs, downtown checkin has begun to reappear over the last ten or so years. The UK has toyed with it again in assosciation with BAA's Heathrow Express at Paddington but it hasn't taken firm root. Europe, with its relatively low service ethic, lags behind. As was predictable, Asia led the way in the revival. Hong Kong and Kuala Lumpur's new airports of 1997/8 both had bright modern rail linked facilities which enabled passengers to get rid of their bags at the earliest opportunity and go straight to departures at the airport. What a difference that can make both for business travellers and families lugging several pieces between them.
Literally less persperation and less anxiety.

So who and where is next? Not perhaps the who and where many would have named if asked. The answer is Brussels Airlines, now with 19 destinations in Sub Saharan Africa (BA has 9, Virgin 5). They have instituted city checkin at 5 of these,- Conakry,Freetown, Kigali, Kinshasa and Monrovia which are not the easiest places in which to make the logistics and the required security arrangements work. Maybe they will prompt some rethinking amongst others. To satisfy the nowt for nowt accountants it's a service for which many would pay a reasonable extra charge. (Note reasonable is key before you get too excited in the Finance Departments). Meanwhile several cheers for the Asians and the Belgians.

Railways,- Hopeful signals in East Africa.

For many years East Africa's railways have been crying out for renewal, refurbishment and increases in capacity and for those then to be fully utilised. Taking traffic off the congested Mombasa-Nairobi-Kampala road is a priority both to save the heavy wear imposed by slow moving heavy lorries and trailers heading not only for Nairobi but onwards to Uganda and then south into Rwanda and Burundi. Moving a proportion of this traffic to rail would not only speed up transit times but reduce the vehicles' susceptability to the attention of various authorities at numerous check points throughout Kenya. These seem to find an extraordinarily large amount of reasons for imposing on the spot fines of one sort or another. Receipt forms often seem to be in short supply so there are probably many in Kenya very happy to see the traffic stay where it is,-on the roads.(or maybe just a little to one side of them while "cashpay" terms for alleged trangressions are discussed).

The concession to run Rift Valley Railways, as the network is now called , was some years ago allocated to a South African consortium, Sheltam, and there was great initial optimism that dramatic improvements in stock, track and performance would follow. The same optimism had accompanied South African Airways' successful bid to run Air Tanzania. Unfortunately both involvements turned out to be disappointing and both have now exited with little to show for their involvement

The website of RVR's 51% owners, Cairo based Citadel Capital Platform Company African Railways, dated 2nd August, and "The East African" newspaper in its August 8th edition have however given new glimmers of hope of progress. Firstly, 5 year loans totalling $164 million for the refurbishment of the existing track, locomotives and rolling stock have now been agreed. Amongst those contributing is International Finance Corporation, the private sector lending arm of the World Bank. Hopefully this will enable the metre gauge line to be restored to something like its former capability and it will become again a credible means of long haul freight transport.

Much more exciting for the longer term though is the planning of a new parallel standard gauge line which would eventually replace it. An agreement to develop this was concluded between Kenya and Uganda in 2008. Another standard gauge line is also being planned by Tanzania and Uganda more or less along the alignment of Tanzania's Central Line from Dar es Salaam to Dodoma and on the Mwanza on Lake Victoria whence goods would be taken by a proper train carrying ferry to Uganda's Port Bell. Metre gauge lines were much easier and cheaper to build than higher specification standard gauge ones during the earlier colonial era. Speed was less important then and the total tonnages of freight were much lower. Passenger trains which do not fit well with heavy freight ones on any railway line were infrequent and slow but just about adequate for the numbers wishing to use them. The development of standard gauge lines could revolutionise rail transport in East Africa, making the flow of commerce quicker, easier, up to 35% cheaper and less prone to en route interference. The Tanzanian line would cost about $ 2 billion, a huge amount for the country, but less huge for donor and supporting countries wishing to invest in a real project with ongoing tangible benefits( assuming appropriate ongoing maintainence support was also put in from the beginning). Railways and their performance are tangible and visible and their construction can be monitored every yard of the way. They are therefore a much better bet for the international aid industry and lenders than many other projects which seem to involve large sums of money with little to show for them. There is a chance here that Kenya's famed "Lunatic Line" could become sane. Both projects will require urgency and commitment to ensure that they do not get bogged down in endless complications, political wrangles and delays. Also essential is top quality enthusiastic management and not a bunch of mercenaries whose hearts aren't really in the tasks.

Qantas -The Kangaroo's bounce gets dampened, but it's in the DNA.

News that Qantas International's bounce was to be curbed so as to switch immediate future investment to regional operations and a new full service airline venture in Asia has been greeted with less than wild enthusiasm by most Australians. In fact it has gone down like a lead kangaroo. To the national psyche Qantas has been the Australian flag bearer across the world, spanning all of Asia and Europe on the way to primarily the UK and the Pacific to West Coast USA and on to New York. The proud red tail has been an expression of Australia and all good things Australian and a vital statement that the country is part of the world and a significant player in it. Many Australian heads are hanging in a sense of despondency and gloom. The unions are characteristically making a meal out of it.It is very hard to take.

Australians should not though be too surprised or even upset at this turn of events. It was part of Qantas' DNA from the very outset and bound to creep up on them over the years as technology developed ever bigger and longer range aircraft. At the same time the people in the middle of the route emerged as major players in the global aviation scene and demand for travel to and from Australia with its relatively affluent 22.6 million population ,many with strong historic family connections in Europe and Asia, mushroomed. The notion that Australian and other end carriers could protect all this traffic for themselves even if they could afford to invest in all the fleets needed to carry it was and remains unrealistic and unsustainable. They can not be blamed though for trying to hang onto it for as long as possible. Why would any business be voluntarily enthusiastic about losing even one passenger to upstart competition?

So where did this slide away from monopoly begin? Not long after day one is the answer and at some point it was bound to become overwhelming. Fingers in the dyke would have to be replaced by arms, legs, full bodies, sandbags, concrete, until eventually it would break whatever anyone did to reinforce it.

The story of what was built into the DNA goes like this.............

The "Kangaroo Route" to Britain has been a keystone of Qantas activity since the 1930s. For most of the time it has been flown in a series of differing and developing partnerships, both loose and close, with BA and its predecessor BOAC. During these and in between there have periods of intense disagreement including until the 1970s constant pressure to buy often unsatisfactory British aircraft. To its credit Qantas never yielded to this arm twisting and occasionally serious unpleasantness. It was also capable of some acid responses.

Pre 1939 the Qantas/British Airways (Mark 1 pre BOAC) was tentative at best and very low volume. Shipping companies rather than other airlines carried the bulk of the largely migrant passengers. From early days though, the always fleet of foot KLM was pushing on the European door and Pan Am and later the the largely opportunistic Canadian Pacific on the trans-Pacific to the Americas.

After 1945 the arrival of new, faster and pressurised airliners soon gave the airlines the upper hand and Qantas, with the elegant Constellation set the pace. BOAC, short of dollars, struggled on with flying boats for a year or two before a small batch of Constellation 049s became available from Aer Lingus/Aer Rianta whose Atlantic operation had failed and these could be paid for in sterling. From that point it was game on and the two partners from each end of the route presumed that the business was almost exclusively theirs. They saw it as their entitlement and resented any attempts by others to take any of it. Hence early efforts to fight off the enterprising Dutch in the form of KLM already well established just to the north in Indonesia.

The first Asian incursions into the business were on a small scale by Philippine Airlines in the 1950s with DC6 flights Manila-London but their effect was insignificant. Air India was the first serious entrant as it was in a tripartite revenue pooling partnership with Qantas and BOAC. Very much a high quality and rather exotic carrier, it was not slow in the 1950s in demanding a place on the Australian route. It was accomodated but both the other partners saw it as primarily a predator. The real Asian awakening though was in 1971 with the very first and very high service quality Malaysia-Singapore Airlines Boeing 707 services from Sydney to London with a change of flight number in Singapore. MSA were progressively followed by Thai,the separated Singapore Airlines and MAS,and Cathay Pacific until almost all the north east and south east Asian players entered the fray. They have gone from strength to strength and probably didn't expect to be too seriously challenged.

While Qantas and BOAC/BA sought to tightly control fares/yields through rigid enforcement of IATA fares on the one hand and capacity/frequency limitations on the other, the Asian carriers saw things differently and viewed fare reductions ("Cheating" or "non compliance" in IATA parlance)and operating as many frequencies as they could get through Air Service Agreements as key to driving traffic increases and market share. They persued this line vigorously. No sacred kangaroos for them.

The other big factor was simple geography. Most of Asia is about a third of the way to Europe which meant that it was cheaper for Asian carriers to add additional European and destinations as spokes to their hubs than it was for Qantas who were located 8 hours away down at the end of the route. The Asians therefore took more and more of the business to points not directly served by the Australian airline and it was very difficult for Qantas or BA to fight back. At the northern end of the route BA could feed European business over London but it was outplayed particularly by KLM as Amsterdam was less of a backtrack (and none from the UK provinces) and the one terminal simple and pleasant to use layout of Schipol was infinitely better than Heathrow's multi-terminal and messy transfer arrangements. For Qantas the problem of profitable direct access to a plethora of European cities became ever more difficult as the demand for two stop services grew from the mid 1970s and the initial Boeing 747 era. Intermediate stops in Europe became uncompetitve in the end to end market to the UK. The arrival in the late 1980s of the longer range 747-400 meant that the demand moved from 2 stop to one stop and Qantas' problem of how to serve continental Europe became even more acute.

In 1977/8 Australia with some support from the UK had attempted one last fling at trying to stuff fingers into the leaking dykes of ever growing totals of passengers and revenue flooding to foreign carriers. In an extraordinary move called the International Civil Aviation Policy (ICAP) they sought once and for all to restrict the ability of intermediate foreign carriers to carry UK/Europe to Australia traffic through their home airports, primarily in Asia. It was as if there were tunnels with no intermediate entrances or exits all the way between Australia and UK/Europe and within these all end to end business could be exclusively contained for the benefit of the two national carriers involved. To facilitate this it was proposed to restrict Air Services Agreements, particularly those with Malaysia, Thailand, India, Austria, Canada and France.......In the event the proposal was dropped as impractical and the big surge towards liberalisation became unstoppable.

The Asian carriers very quickly gave Australia's cities more and more links to the world than Qantas and BA who, with their joint Services Agreement in the early 1990s consolidated rather than expanded their offerings and chose not to increase their capacity in line with potential demand. The reason is simple. The very long route has huge low yielding leisure demand but relatively little high yield business traffic to help produce a viable average. Making money is therefore difficult. Add to that the problem for legacy airlines based at either end of the route of the added inefficiencies of their night jet bans as well as higher costs and lower productivity and the finances begin to look daunting. Even worse the fact is that however they schedule their services they can not avoid long layovers or long dead times at either end of the route. Maximising aircraft utilisation therfore becomes impossible. The Gulf carriers on the other hand can turn around quickly and once home find other useful work within an hour or two.

Finally came the biggest boost to capacity between Australia and anywhere north, west or south of the Gulf. The Gulf's own new airlines arrived. Gulf Air had been a minor player but Emirates, followed by Etihad and Qatar have proved to be something else. Adding spokes into Europe, Africa and the Middle East has, thanks to the shape of the world, been relatively simple and not too expensive for them. Seven or less hours will take them pretty well anywhere in all three regions. That means two man flight deck crews, quick turnarounds and high utilisation through their 24 hour a day airports . As noted above, when the aircraft return home at any time of day there are plenty of 2/3 hour regional sectors that can be flown to top up utilisation. There is no enforced overnight grounding in Asia or the Middle East. UK/Europe and Australia want quiet nights but they have to buy them at a high price in the competitive world of aviation. That's their choice, along with the costs of generous state welfare schemes, restricted working weeks, moves towards inefficient green power generation, high travel taxes (UK) and the rest. They can't complain if more business orientated parts of the world choose to behave differently in the interests of producing more at lower costs and gaining market share. It's not unfair.
It's called competition. The consumer benefits.

What Qantas and BA are now doing in slimming down their Kangaroo route services almost to a minimum presence is not an abdication. It is a simple acknowledgement that this was always the way it was going to be end up unless they and their base countries were going to significantly change the way they do things and their very cautious approach to investment.The world is also the shape it is, the distances, costs are what they are and on this particular route it is game over for the end of route veterans. Despite a limited hubbing operation in Singapore and an even smaller one in Bangkok, they were already on pretty much a hiding to nothing from the Asian carriers but the Gulf newcomers have become overwhelming. Short of investing potentially billions and risking losing their shirts or at best making a minimal return on expenditure ,they can not fight the tide. There is no sensible chance of persuading Australia's regulators to clip the foreigner's wings. Very restricted capacity and high fares are not in the interests of Australia and Australians . The country being where it is, both need to welcome every new flight to anywhere they can get regardles of who provides it. Protecting Australian airlines at the expense of other national interests just isn't on without wrecking the tourism and other industries. The old protectionism has simply been overrun by the legitimate demands of the market. Qantas and the European carriers can still play a part in it but the big future of the Kangaroo route is sandy. All credit to Qantas and the Australian government for having courageously having bitten the bullet rather than the Gulfies. They have read the DNA right.

One is better than two,-a dynamic of customer service

A good quality UK train operator who is currently going through two weeks of planned major disruption to enable them to shortly introduce a substantially improved service has flooded its stations with people to advise would-be passengers of alternative ways of getting to their destinations.

They have done it well and there are plenty of feet on the ground. However, a familiar dynamic of well intended measures which allow most of them operate in pairs or with other staff reveals that other very human dynamic which affects even bodies such as the Police. They talk to each other. Indeed they get so involved in talking to each other that they face inwards and not outwards to the customers. Police walking in pairs must inevitably miss a percentage of what they would notice if alone, transport customer service agents become preoccupied with last nights TV, tonight's match, date or whatever . They don't notice the potentially struggling customer, the one who if not helped a little might miss or hold up the flight. Bigger groups are even worse. Airline cabin crew tend to gather in inward facing gaggles almost totally involved with each other and unaware of the impression they are making on the onlookers. On board that pulling of the curtains as they swarm to the gallies for a chat says "Don't come in here,- you've had your service".

The truth is that the larger the group becomes above the number of one, the less effective each member of it tends to become. Draw that on a cost effectiveness graph and there is only a single conclusion. In most situations one is best. Two is very rarely twice as good and a swarm............

The Iberia A330-300 order,- Whose was it?

For those who remain in doubt or denial that BA and Iberia have gone as standalone companies, the recent order for 8 A330-300s and 8 options for Iberia's fleet renewal should give a pointer.

The deal was announced by ICAG's CEO, Willie Walsh, not by the Iberia brand team. It is an ICAG order, not Iberia's. The aircraft will simply be allocated to them by the brand's owner.

Clear now?

UK Rail,- HS 2 to the north. Logs across the line...

No, not logs but the good citizens of Buckinghamshire in particular. From the shrill noises of the Stop HS2 campaigners backed by Buckinghamshire County Council, Aylesbury Vale District Council, Buckinghamshire Conservatives and others, one would think that the end of the world was nigh. Reminscent of some of the anti-railway campaigns by local landowners from the 1850s onwards and the more recent 1960's anti Concorde hysteria ,otherwise seemingly quite sensible people are enraged and fulminating about the devastation this very narrow 2 track line will cut for a very few miles (most of it in tunnels and cuttings) through a pleasant Chiltern valley. One would have thought that the entire range of the hills was about to be concreted over. In fact a tiny portion and proportion will be touched and even then the new line will blend pretty well with nearly all of the landscape. The much wider 4 track West Coast Main Line a few miles further north is hardly noticed in most places.

Lurid warnings dressed up as indisputable truths abound. The goats at the Buckinghamshire Goat Centre will be disturbed. Royal horses several miles away could be affected. It will be impossible to work on the trains so much they will be swaying about. Almost every day some new and horrifying fear is unveiled somewhere.

With over £1 million in their vaults the "No" campaigners have been careful to shield themselves from accusations of Nimbyism. They know that naked self interest would be fatal .Instead they proclaim that it's not the disliked local alignment but the whole case for the line that they are opposing . "No business case", "No environmental case" say the posters. Suggestions that this is simply not true are treated with incredulity.

Up North, after a long silence ,they have belatedly revolted against taking all the southern noise lying down and come out fighting. Councils and business groups are now getting more vocal and higher profile in their support for the project. Posters proclaiming "Our jobs not their lawns" have appeared. These have brought shouts of "Class War. Offside. Not Fair " from the outraged southerners whose greater access, formally and informally to Westminster and those who work there is of course not unfair. Nor apparently is the influence of the string of high well known celebs, politicians, media and business people who happen to live in and around the Chilterns who can drop words "in the right ears".

Conservative MPs, fearful of receiving P45s after the next election if they don't abandon national interests and party policy and instead fight local corners, say they will vote against the government. What are they afraid of? The biggest sanction is likely to be just a drop off in the number of local dinner invitations. Who else are voters turned off by their support for national party policy on HS 2 going to vote for? Labour? That will be the day in the Chilterns and anyway it was a Labour scheme introduced by the counter-British national culture , "Let's get things done" Lord Adonis. Ed may wobble a bit and "review" support depending on how the maths of the votes look. He will want to feel everybody's pain but most of all where it might gain him a seat or two. Sorry North but he reckons he's got you in the bag already so that could push him in the direction you don't want but chances are it won't matter much anyway.

The HS2 consultation period closed at the end of July. The Minister's decision is expected in December. If it's a "Yes" construction will begin in 2016 ,nearly 5 years later ,assuming that planning processes have been satisfactorily cleared. That is reckoned to be going some as numerous local feet will be outstretched to try to derail the scheme. The actual opening of the first section to Birmingham would be ten years later,in 2026, with the western and eastern prongs to Manchester and Leeds maybe by 2036, some ten years beyond that.

Meanwhile the West and East Coast main lines are beginning to burst at the seams and scope for needed capacity increases particularly in outer London commuter areas such as Northampton are very limited. With or without a high speed line ,another new route to the north is needed and the HS formula which takes very fast limited stop passenger trains away from the rest on a truly 21st century railway gives the best return. Any mix of fast and slow trains on the same lines means they get in each others way and line occupancy plummets. A conventional line would not therefore be nearly as good a solution. Laying additional tracks alongside existing ones is almost impossible due to the string of conurbations on the way. It would also add huge complexity to existing junctions. These proliferate particularly on the West Coast main line and its tributaries.

The venom, misinformation and disinformation streaming out of the Chilterns must be politely listened to but gently set aside in a calm and rational manner. Everything possible has been done to make the route as little intrusive as possible. In the pleasant pastures, woodlands, villages and towns of the Chilterns there is not a great understanding of or even interest in the needs of the North. Indeed, as mentioned above, there is little interest in even hearing about it. HS 2 supporters "up there" need to promulgate and explain their case more loudly and clearly. They have far fewer informal contacts in the Westminster and Home Counties corridors of power and far less money in the kitty. That doesn't make their task easy. Largely they see a "Yes" decision as just common sense which must prevail. The politicians and planners should not let them down. It would be a national calamity if they did so as a growing Britain would then slowly strangle itself with an inadequate and outdated rail and road system. There's the killing off of the privately funded domestic air links from London too. That's a story for another day.

ICAG/BA shuffles Heathrow Terminal portfolio,- and the bigger picture for the airport. It's not dead yet!

With the second Heathrow Terminal 5 satellite now open but the whole terminal still unable to accomodate all BA's services , the ICAG brand will rearrange a small part of its split between T5 and the much less exciting,-i.e. dreary and generally awful- T3 from the beginning of the winter schedules.

On the long haul side of the business the twice daily joint BA flights to Sydney in the joint venture venture with Qantas and the daily Singapore terminator will remain in T3 so as to stay lined up line up with the larger number services provided by the Australian dominant partner. They will be joined by the twice daily oil market based Houston service. This will break the same terminal link between Houston and BA's T5 based services to the Gulf but presumably the arithmetic works, possibly due to Emirates (2) and Qatar (1) nonstops now capturing the bulk of the UAE and Qatar markets. Delta also operates a daily nonstop Atlanta to Dubai 777.

On the short haul side, Prague,Budapest,Warsaw and, rather different, Larnaca all move from T5 to T3 indicating probably lower volumes of BA/BA connecting traffic on these than most others as well as reflecting the geographical grouping of the first three.

More significantly, all of BA's Spanish flights move into T5 . This must give rise to speculation that at some point fellow ICAG brand Iberia may logically follow. Such a move would require more of BA's shorthaul to decamp to T3 and it will be interesting to see who in ICAG would call the shots. The betting is on ICAG not the component brands.

One can speculate that, particularly if American were allowed to merge into ICAG, the group might like to see their Atlantic operation also move into T5 . This would turn the already high frequency New York services into a true shuttle but it would require more of BA's shorthaul to decamp to T3 , these routes thereby losing the significant competitive advantage of connections within T5. It would also alter the long/short haul and stand long dwell/short dwell balance in the terminal.

It was known from the beginning of T5 planning in the mid/late 1980s that it could not accomodate all of BA's base terminal operation and that the airline would have to spread back across to T3 in the Central Area. The extremeties of the two are remarkably close which makes a close linkup between the two logical. From the outset they could have been effectively united by a relatively simple and not too expensive cut and cover trench/tunnel containing an extension to the T5 shuttle trains, a high speed baggage transfer belt and a backup low tech walkway and roadway. This would have given BA and the airport itself the most effective and flexible way of handling the base operator's mix of long haul and short haul flights. This is always a problem for airport operators trying to maximise stand occupancies on the one hand and the airline's need for more time for turning around ,cleaning, resupplying and engineering long haul services on the other. This conflict of interests in which the dominant home airline which can see itself as the airport's best and most important customer puts it at loggerheards with an airport who would prefer to maximise throughput and revenue by ideally in a perfect world probably only having quicker turnarounds by visiting carriers. This debate is further complicated now that duty free sales are so important and depend in part on the mix of flights and connections right across a major airport.

If American were to submit itself to integration into ICAG ,the fusion of T5/T3 and the increase of capacity in both would become a crucial issue. Once Heathrow East opens in stages between 2014 and 2019 the bulldozers could move in on late 1950s concept T3. A pleasant, easy-to-use 21st century replacement T3 could be built complete with the full range of links with T5 and Heathrow East. Ideally these would be on a new ring main style transfer baggage and people system linking up with an arm to T4 so that the airport could for the first time ever become a coherent whole. The transfer baggage tunnel now being built from T5 to T3 could be incorporated as a start but the thinking needs to go well beyond that. It is possible.

Heathrow's potential increase in movements has been largely choked off by the government's abandonment of the projected new 3rd runway. Leisure travel demand growth is seriously threatened by ever rising, uncompetitive and punitive passenger taxes. Heathrow should not though be written off as dead in the water. Substantially higher passenger throughputs are possible via new terminal facilities, better use of stands and larger aircraft ideally with higher density configurations. Given the right,-and substantial,-investment coupled with London's enormous attraction as a business centre and leisure travel generator,- Heathrow can still do battle with its competitors. To maximise its potential though it also needs ICAG to abandon the illusion that it can disregard where the demand really is and channel the bulk of its European growth through the south western hub of Madrid. Posturing is all very well but the money is still in the much more central London/Amsterdam/Paris triangle with an outer ring taking in particularly Frankfurt and Copenhagen.