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.