Heathrow Airport and Air Transport Business

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Table of Contents

Introduction
Heathrow Airport: An Overview
Heathrow’s Technical Challenge
Discussion
Conclusion
References

Introduction

Heathrow airport is considered to be one of the busiest airports in the world today as it appeared to be the largest airport in Britain. A lot of passengers are traveling through Heathrow and have experienced the old facilities of the airport. However, the opening of Terminal five by 2008 recreates the airport from its facilities up to the services that it offers and will be seen for the next future years.

Heathrow Airport: An Overview

Heathrow airport originally starts during the year 1946. The work began in Heathrow in 1944 and was formally passed to the civil control from its military control when it began in January 1946. The airport formally opened on the 31^st of May and by that time, there were terminals and the passengers checked in on a fleeting tent of the airfield.

Europa building or Terminal two was the pioneer terminal of Heathrow and the innovations regarding the facilities emerged in the year 1955. Until 1966 came, a different body called the British Airports Authority was formed as a government-owned organization until July 1987 after it was privatized. After the formation of BAA (British Airport Authority), in 1968, the airport opened another building and now it is known as Terminal 1 and followed by various expansions as the succeeding years hit.

After a long public inquiry of about 46 months, a new Terminal was opened, which is Terminal 5, upon the approval of the government in 2001 (Bray, 1993). And the formal opening of Terminal five happened in March 2008. To describe terminal five, it is composed of three buildings, the terminal five mainly and another two extensions namely 5B and 5C which are connected by a mechanized transportation system. The spectacular designs of glass walls and roofs are created by a Professional Engineer and have done a lot of well-devised buildings. Building the terminal required almost sixty thousand workers and needed to remove two rivers.

On the other hand, a conflict came because of having multiple airports in Britain that leads to competition. According to a source, the BAA (British Airport Authority) should dispose of three of its seven airports and the other two in London. This issue alarms the airports including Heathrow though it is Britain’s largest airport. Having seven airports to manage under the BAA prevailed that they are not responding adequately to the needs of customers and lack of initiative in planning capabilities.

And this was agreed by Carrier Virgin Atlantic as they also said that owning the airports can impair the interests of the passengers. Paul Charles, who is the spokesperson for the Virgin Atlantic, pointed out that Gatwick airport has endured sufferings when it comes to the investments because the BAA is focusing more on the improvement of Heathrow airport.

But for BAA’s side, the group admits that they need further developments regarding their services and claims that the proposal of the commission will not be an effective way of placing themselves into the next level. Also, according to the BAA, they should be tolerated on adding up the capacity of the airport and its runway to be able to meet the customer’s satisfaction and provide the best customer service. And some of the observers believe that selling the airports will not fix the problems just because of the competition (Cable News Network, 2008).

Thus, According to Michael Peel, a reporter, there had been problems with regards to the monopoly that has something to do with regulations, investment techniques, airport capacity, and the runway as well and many other airport details. Peel added the lack of planning of the BAA that is why the airport is in the hot seat ever since it was owned by a Spanish property group about two decades ago (Cable News Network, 2008).

Heathrow’s Technical Challenge

The technologies of terminal five have caused damages to the people. The opening of Terminal five last March 2008 has been awaited for its luxurious facilities and services but however, some technicalities aroused when a high- tech baggage handling system functioned wrongly that caused big issues such as cancellation of flights hence, inconvenience were experienced by the passengers and a loss for the airport.
Actually, the passengers who have large baggage were the ones affected by the technical problem because the airport did not allow them to check-in. it was upon the confirmation of British Airways that passengers with hand baggage only can check-in at the airport. Disappointment for a lot of people came thinking that the new terminal is known to be highly made and flaunts a sophisticated luggage system that can carry about 12,000 bags in an hour. Nevertheless, the director of BA apologized for the inconvenience that the terminal brought saying that the first operations usually encounter an exceptional challenge. And they are now investing in the improvement of the baggage handling system to disregard the pandemonium scenario that it had brought to the passengers and for the airport as well.

The impact of this technical issue had triggered the mobilization of the people who opposed the airport expansion worrying that the airport would build another terminal and expand the runway more. The mob was composed of environmental groups and concerned residents. They are saying that the expansion would greatly cause climate change for the area and it will be harmful to the people who live adjacent to the airport.

This will cause an economic crisis for them though. The leader of the group is not actually against Heathrow airport but on building more terminals. According to them, they also fly through Heathrow but an expansion is not tolerable because the airport can carry many flights a day and can accommodate all of their airplanes in the current area that Heathrow has. In fact, they also like the services and luxurious look of the airport but the expansion is seen to be abusive of having their territory.

But of course, the British Airways Chief Executive firmly defended the airport. According to Willie Walsh, the creation of new terminals is not merely for the sake of having profits but also for the passenger’s satisfaction. People have been experiencing the inconvenience at the previous four terminals and they want to upgrade their facilities into a more high-end level which hopefully would meet the expectations of each passenger. The dilemmas were primarily because of the poor infrastructures that they have got before, and now they are innovating by building new terminals and providing the best services through the failure on the baggage system was treated as a trial.

Looking at the strategic side of the Heathrow Airport, the creation of this new terminal is actually part of their strategy to be able to attract passengers and get them into the airport without any hassle. The passengers could also opt to check-in online which would be practical. One of their way of accommodating the passengers who arrived earlier 35 minutes before the flight is building shops and restaurants where they can spend their spare time in terminal five. The team wants to promote an exciting experience being in an airport and make it an exceptional one from the rest of the other airports (Cable News Network, 2008).

Discussion

The air transport business is a relatively intricate macro-industry. In this kind of industry, large activities are being done by a corresponding and combined association of players: the passengers mainly and cargo airlines, airport authorities, in-flight catering firms, car rentals, air brokers, hardware providers like aircraft manufacturers and air terminal building firms, tour operators and travel agents and the hotels, and the like, all of them are determined to persuade no less than partly the end stipulation needs (Jarach, 2001).

The quantitative and qualitative amount of profitable connections, the abundance in the number of competitors, and the investment return for each group of players depend mutually on the rapidity of deregulation performance in every considered single business unit and on the entire development of the expansion of air travel services as well (Valdani & Jarach, 1997).

British Airways is the sole airline that can maneuver from Terminal five of Heathrow airport and almost all the flights will be transferred in T5 and only a small number will use the T3. Originally, the vision of the British Airport Authority is to bring back the position of Heathrow to what it deserves and an investment that will provide high-end facilities, security priorities, and contribute widely to their performances in the environment (De Bono & Heller, 2006).

One of the strengths of British Airways is the brand name itself and having the unique marketing proposition of being the world’s favorite airline, though British Airways should give more focus on the strengths and weaknesses of the company and develop a more systematic strategy on it (De Bono & Heller, 2006). However, despite having such negative issues, the business strategy of British Airways became the pioneer among any other competitors in air traveling.

Basically, the transition to Terminal opens up a big opportunity for both British Airways and the major hotels that rely on the airport for their revenue. Before, the functions of the airport were limited only, and usually, difficulties in having enough space for the passengers were the major problem of the airport. The strategic plans on the transition to terminal five are an effective way to earn long-term revenues. Terminal five is promoting in balancing the environment and commercial awareness of the company which is being assisted by the WSP, which is a global company based in the UK that gives management and consultancy services for the building and to the environment.

WSP industrialized the environmental management system or EMS for the work plan and building stage of the project that worked together with the personal EMS constraint of British Airways and British Airport Authority. Thus, the help of WSP explicitly attributes to the administration of the environmental impact assessment planning such as water management for the whole operation of Terminal five (WSP Group, 2008).

Another thing to consider in viewing the total system of Heathrow’s terminal five is the contributions that they make for the benefit of the economy. Almost one-third of the passengers are passengers from other airports. Having a bigger connection with other air routes can create a healthy economy because it will open a business for large numbers of overseas markets, suppliers, and customers from one place to another (Doganis, 1992).

Heathrow is viewed as the only hub airport that the United Kingdom and Britain’s most significant economic positive feature. Heathrow is full that operates at a 99% officially recognized runway competence and is open to overseas competition. In fact, before the completion of Heathrow’s terminal five, a proposal for making a third runway has been called for the BAA. This is due to further plans that the airport possessed as they depicted a wealthy and profitable economy through their share of the progress of the company and the economy as well (Levit, 1980).

The airport should respond to the heed that BAA must meet the target of EU on air pollution and aircraft noise. For now, they accommodate thousands of passengers each day and the terminals have developed many shopping centers where the waiting passengers can buy the things that they want.

Conclusion

Weighing up the strategic plans of Heathrow upon the development of terminal five comprises of looking at the positive outcomes it has since the start of its operation. As was stated earlier, the construction of terminal five had a lot of queries from the people who oppose its expansion and because of the catastrophic event that it brought to the passengers when the technical issue came. Indeed, the scenario that happened on March 27^th did a big impact on the people’s view thinking about the efficiency of the newly opened terminal’s performance.

Considering you are one of the passengers who were stuck at the airport at that moment, automatically you will say it was inconvenient and disappointing because you thought the newly opened terminal will bring about a remarkable experience that will make you patronize the company loyally.

For British Airways, which is the single airline that can operate at terminal five, the main point of their original strategy that they developed is for them to get more passengers which they will serve and introduce the new facilities of the airport for their benefit and the company as well. The transition of terminal five definitely would generate more revenues for the company and tourism will go on a higher rate as the travelers worldwide will be provided with a just treatment and worth paying for. Anyway, the operation is terminal five is at its initial phases and critical evaluation should be seen for its further performance.

However, taking the current position of British Airways at terminal five is seen to be a good thing because their plans can indeed work together. The BA should apparently maintain their original strategy and develop this by providing extensive services for the passengers. Creating entertainment or leisure is a good strength though but in the long run, British Airways should think of more innovations as it will go with the flow of the future growth of terminal five.

On the other hand, the part of major hotels that relies on the airport also implies a great role. Of course, checking in a hotel is one of the vitals that comprise an airport. Passengers from various locations can decide on whether to stay at the hotels or directly go to their distinct places. The strategy that the hotels should launch also directs to the passengers because they need to perform a satisfactory function whenever things go wrong especially like what had happened on the baggage system. They should more develop a plan for providing excellent customer service (Appadurai, 1996). However, hotels are still successful because of good management and using a strategic tool for their business (Anderson, 2004).

Thus, British Airways and major hotels are the main actors at terminal five of Heathrow, the world’s busiest airport. It had been a large responsibility for the operators to maintain a strategy where a decline stage would not appear on the life cycle of a business. Wrapping up, the strategic plans of both, center to the idea of getting more passengers and providing them the best quality of service upon the expansion of Heathrow airport through the construction of terminal five.

The transition goes from the way of being a substandard airport that has limited runway capacity and terminals up to the expansion of the total system. Upon building terminal five, it has now come up with a better facility to provide the passengers somewhere to stay in certain situations such as waiting for the arrival and departure, shopping for goods and services as well, and experiencing the sophisticated new developments of the airport.

References

Anderson, B. (2004). Observations on International Tourism Communications. First World Confrence on Tourism Communications (Klancnik R, ed.), Madrid, pp.59-61.

Appadurai, A. (1996). Modernity at Large Cultural Dimnesins of Globalisation. Minneapolis: University of Minnesota Press.

Bray, R. (1993). “Plans are ready for huge fifth Heathrow terminal”, Evening Standard, Associated Newspapers, p. 5.

Cable News Network. 2008. “T5 tech failure causes Heathrow chaos”. Web.

De Bono, E., & Heller, R. 2006. “Thinking Managers: British Airways Management”. Web.

Doganis, R., 1992. The Airport business. Routledge, London.

Jarach, D. 2001. The evolution of airport management practices: toeards a multi- point, multi- service, marketing- driven firm. Journal of Air Transport Management 7. 119-125.

Levit, T., 1980. Marketing success through differentiation- of anything. Harvard Business Review 58, 83-91.

Valdani, E. and Jarach, D., 1997. Compagnie aeree deregulation, strategie di marketing nei cieli senza frontiere. EGEA, Milan.

WSP Group. 2008. “Terminal 5 – Heathrow Airport, UK”. Web.

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