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BA's Terminal 5 proving to be one big hub of chaos
By Julia Werdigier and Nicola Clark
Monday, March 31, 2008
LONDON: Terminal 5 was supposed to be the saving grace for British Airways and London Heathrow, one of the most congested airports in Europe. Instead, as the glitzy new terminal enters its second week, passengers are bracing for more chaos.
British Airways canceled another 54 flights at the new terminal Monday as it struggled with the computerized baggage-handling system that has already led to at least 15,000 pieces of misdirected baggage. The airline, which has canceled more than 250 flights since the gleaming terminal opened Thursday as its main hub, said Monday that the situation was improving daily and that it hoped to fly at full capacity again soon.
But the disruptions, which are set to last for at least the rest of this week, could not come at a worse time for British Airways, which had enjoyed a turnaround under its chief executive, Willie Walsh, who cut jobs and focused on the more lucrative premium travel business between the United States and Britain.
In addition to higher oil prices and declining consumer confidence that weigh on the entire industry, British Airways is facing increasing competition on the North Atlantic routes - its most important long-haul market - as the "open skies" treaty with the United States took effect Sunday night.
"It's a mess," Gert Zonneveld, an analyst at Panmure Gordon in London, said. "The reputation damage from Terminal 5 is their biggest headache and there's a real chance that people will book away from British Airways."
Zonneveld estimated that the disruptions and flight cancellations could cost British Airways more than £25 million, or $50 million.
Analysts at Goldman Sachs cut their recommendation for British Airways shares from "buy" to "sell" on Monday, suggesting that the shares could drop sharply because of weaker consumer demand and "ongoing operational challenges of Heathrow." They also cited more competition on the North Atlantic.
The stock fell 2.4 percent in London, closing at £234.25, down 575 pence.
More...
Did not a similar situation happened at Denver airport? Could it be the same designer designed the Terminal 5?
By Julia Werdigier and Nicola Clark
Monday, March 31, 2008
LONDON: Terminal 5 was supposed to be the saving grace for British Airways and London Heathrow, one of the most congested airports in Europe. Instead, as the glitzy new terminal enters its second week, passengers are bracing for more chaos.
British Airways canceled another 54 flights at the new terminal Monday as it struggled with the computerized baggage-handling system that has already led to at least 15,000 pieces of misdirected baggage. The airline, which has canceled more than 250 flights since the gleaming terminal opened Thursday as its main hub, said Monday that the situation was improving daily and that it hoped to fly at full capacity again soon.
But the disruptions, which are set to last for at least the rest of this week, could not come at a worse time for British Airways, which had enjoyed a turnaround under its chief executive, Willie Walsh, who cut jobs and focused on the more lucrative premium travel business between the United States and Britain.
In addition to higher oil prices and declining consumer confidence that weigh on the entire industry, British Airways is facing increasing competition on the North Atlantic routes - its most important long-haul market - as the "open skies" treaty with the United States took effect Sunday night.
"It's a mess," Gert Zonneveld, an analyst at Panmure Gordon in London, said. "The reputation damage from Terminal 5 is their biggest headache and there's a real chance that people will book away from British Airways."
Zonneveld estimated that the disruptions and flight cancellations could cost British Airways more than £25 million, or $50 million.
Analysts at Goldman Sachs cut their recommendation for British Airways shares from "buy" to "sell" on Monday, suggesting that the shares could drop sharply because of weaker consumer demand and "ongoing operational challenges of Heathrow." They also cited more competition on the North Atlantic.
The stock fell 2.4 percent in London, closing at £234.25, down 575 pence.
More...
Did not a similar situation happened at Denver airport? Could it be the same designer designed the Terminal 5?
