Broken management at Heathrow: Airport’s possession construction has an ideal deal to reply for, says ALEX BRUMMER

Flying to Israel and back last week, I realised that, inadvertently, my El Al flights had been booked via Luton, rather than Heathrow.

Britain’s hub airport is closer to my home near Richmond Park, while London-Luton is much less glossy than Heathrow and scarred by a burnt-out car park and unfinished building works.

But my goodness, it was easier to navigate than Heathrow. 

Check-in queues were shorter, up-to-date body scanning security meant bottles and laptops could be left in carry-on bags and, on my return, the luggage popped up by the time immigration had been cleared.

All this just hours before Heathrow inexplicably chose to close for 24 hours after an electricity sub-station fire at North Hyde.

As we know from National Grid, there was no lack of electricity supply. Two nearby sub-stations could have filled the void.

National embarrassment: Heathrow is Europe’s entrepot airport, carrying more traffic and freight than competitors across the Continent

Heathrow is Europe’s entrepot airport, carrying more traffic and freight than competitors across the Continent. Damage to its reputation and reliability does a UK economy largely dependent on services enormous damage.

Anyone listening to the BBC Radio 4’s Today show interview between the estimable Emma Barnett and Heathrow’s Danish chief executive Thomas Woldbye, after the mega-snafu, would recognise a boss out of touch with travellers, his airline customers and UK culture.

Barnett has been criticised for going in too hard with her near-demand for Woldbye’s resignation. In finding her inner-John Humphrys, she exposed Woldbye and the whole ownership structure at Heathrow to be working against the national interest.

Heathrow may not be near-bankrupt – as is the case with Thames Water – but the financial engineering around its ownership has a great deal to answer for. 

Airlines using Heathrow have long been penalised by ever-rising landing charges which end up being paid by the customer. 

Passengers using Britain’s main hub airport face eye-watering parking charges, which escalated post-pandemic, and drop-off fees.

The transfer of the ownership of utilities from public markets into unaccountable private ones has proved disastrous.

The break-up of the listed British Airports Authority (BAA), which owned most of the UK’s principal airports, was sensible and allowed more competition into the system. 

Less acceptable is a high leveraged ownership which has seen far-flung foreign investors prioritised over investment in facilities.

An inheritance of the Blair-Brown government was its easy sign-off of the sale of national assets to foreigners. 

In June 2006, BAA, which owned Heathrow, Gatwick and Stansted plus several regional airports, was sold to family-controlled Spanish construction group Ferrovial for £10.6billion at a peak pre-financial crisis price. It was paid for with a mountain of debt.

The struggle ever since then has been to meet the interest rate bills and to reward new owners. That has been a far higher priority than investing in the nation’s infrastructure. 

Ferrovial finally divested itself of the asset in 2024 and the airport is now owned by French asset manager Ardian and wealth funds from Saudi Arabia, Qatar, Singapore and China. Australia’s retirement trust also owns 11.8 per cent.

The board of ownership vehicle FCP Topco is unstable with at least 21 director changes since May last year. 

As wonderful as it is that Britain is attractive to overseas owners, it is unhealthy that ownership of the nation’s premier airport has been passed around like an icon on a monopoly board. 

The board shake-up as Ferrovial left the scene means that when push came to shove last Friday, it was dominated by newbies with little long-term knowledge of Britain, let alone airports and the airline industry.

It is preposterous that there is no cornerstone UK investor. The perverse ownership structure, with its dominance by authoritarian regimes, means that transparency is non-existent.

As has been the case with Ofwat and Thames Water, the Heathrow regulator, the Civil Aviation Authority, is a watchdog which consistently fails to bark.

Publicly listed companies have an obligation to tell all to the stock market and an obligation to all stakeholders. Heathrow is a great example of market dominance and corporate power without responsibility.