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BAA, the owner of Britain’s three biggest airports, is planning to cut up to 2,000 jobs, leading airlines to give warning that a lack of staff could result in even poorer service than passengers suffer already,The Times has learnt.
Ferrovial, the Spanish company that borrowed heavily to buy BAA last year, may be preparing to sell one or more of its airports. It has ordered each of its seven airports – Heathrow, Gatwick, Stansted, Edinburgh, Glasgow, Aberdeen and Southampton – to conduct a rigorous review of costs and staffing levels.
Despite heavy criticism throughout the summer over standards at Heathrow, Gatwick and Stansted, in particular concerning long delays at security and the shoddy state of terminals, the company is planning a significant cost-cutting programme to increase profits. Redundancies are planned in all departments except security, where the number of staff has risen recently in response to extra restrictions but is still insufficient to prevent the delays.
The cuts, which the company had hoped to keep secret until much later this year, will heighten concerns that Ferrovial is not focusing on the long-term interests of Britain’s key international gateways.
Ken Livingstone, the Mayor of London, said that Heathrow “shamed” the capital, and Kitty Ussher, the City Minister, claimed that the problems there could undermine London’s status as a leading financial centre.
Tony Douglas, who resigned as Heathrow’s chief executive last month, had said the airport was “bursting at the seams” and in some places “held together by sticking plaster”.
A BAA source told The Times: “Ferrovial have a huge debt burden and they can’t sustain that. They are really drilling down costs and there is going to be a complete restructuring of the business, with a couple of thousand jobs going. It cannot be the security staff but every other element of the business is up for review.”
BAA employs 15,000 people world-wide, including 13,000 in Britain. About 5,000 of its British employees are security screeners. Two thousand work in World Duty Free shops, another 1,000 work on airport operations, such as runway maintenance and inspections and allocating stands to aircraft, while about 4,000 work in support roles such as human resources, IT, planning and marketing.
A spokesman for easyJet said: “Any cuts which result in a deterioration in service in return for Ferrovial lining its pockets would be completely unacceptable to the travelling public. It sounds like a fast way of losing the few friends they have got left.” The spokesman added that the weak way that BAA’s monopoly was regulated meant that any cuts in staffing costs would translate into higher profits for the company rather than lower costs for the airlines and passengers using the airports.
Nigel Turner, bmi’s chief executive, said he would not be concerned about the job cuts if they were restricted to back-office staff who played no direct role in running the airports. “But I would be very concerned if there were any cuts to frontline staff.”
He said Ferrovial inherited an inefficient company that had provided a poor service for years. “We have only started to notice, in some perverse British way, since the Spanish took over. But the management are much more responsive than their predecessors.”
Gwyneth Dunwoody, the Labour chairman of the Commons Transport Committee, said last week that it was probably not in the national interest to have Heathrow run by a private foreign company focused on profit.
Douglas McNeill, transport analyst at Blue Oar Securities, said a cost-cutting programme would distract senior staff at a time when the company was dealing with two Competition Commission investigations. It will learn next month how much it can charge airlines at Heathrow and Gatwick for the next five years. Ferrovial has threatened to reconsider plans for a £4 billion reconstruction of Heathrow’s central terminals if the cap is set too low.
The commission is also investigating BAA’s near-monopoly in London and may announce as early as January that it is considering requiring Ferrovial to sell one or more of its airports.
A BAA spokesman admitted that there would be job cuts but said: “There is no final number. This is a simplification exercise aimed at support staff much more than frontline staff. It’s not simply about costs. It’s about building a much leaner and more efficient business.”
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