Heathrow Airport's new Terminal 5 made the news for all the usual reasons on its opening day: lengthy delays, appalling overcrowding and lost baggage.
Smoother days are coming at new Heathrow terminal
By THE ECONOMIST
This time it was blamed on teething troubles rather than bad weather, terrorist threats or uppity unions that often turn the barely tolerable experience of flight into an ordeal.
Yet when the new terminal, which opened to passengers on Thursday hits its stride the vast $8.5 billion edifice is more likely to be met with an approving nod than the grimaces of its early customers. And the lot of the transatlantic flier in particular may also improve with Sunday's introduction of a long-awaited and hard-negotiated "open skies" deal between the European Union and America.
Northwest Airlines is one beneficiary, now landing its Twin Cities-to-London flights at Heathrow, rather than Gatwick, which is farther from London. Next week, Northwest will launch nonstop Twin Cities-to-Paris service.
The new terminal at London's Heathrow -- the world's busiest international hub -- is for the exclusive use of British Airways (BA), which holds more than 40 percent of take-off and landing slots at Heathrow.
The chaos of the first days of operations will take BA some time to live down. But a fully functioning Terminal 5 will take some strain off the remaining four terminals, so life may grow more bearable for other users too.
Heathrow, the destination for 40 percent of transatlantic flights, is likely to feel many of the immediate effects of the new treaty.
Open skies is the latest attempt to liberalize air traffic between the continents, although the deal is contentious. Some European countries, notably Britain, felt too much was given away to secure American assent to a lifting of regulatory restrictions on transatlantic flights. But the result is an accord that cuts away a thicket of restrictive bilateral deals. New rules let any airline fly between anywhere in Europe and anywhere in the United States.
Airlines are set to introduce routes that will give passengers more direct flights between more airports, shortening journey times and boosting competition. Transatlantic traffic should grow by as much as 15.5 percent this year, according to the Federal Aviation Administration. The most significant immediate change will be a leap in the number of flights from United States to Heathrow. It is a useful destination in itself and a hub that offers many connections.
American carriers have added new flights to Heathrow, which had been open only to two British carriers (BA and Virgin) and two counterparts (American and United airlines).
They still will have to deal with the problem of limited runway capacity. Heathrow runways are full, and incumbent operators have hung onto their slots. Airlines can exchange slots, and large sums change hands through a gray market. Continental, for example, has just paid more than $200 million for four of them.
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At Heathrow, such costs may offset the advantages of added competition in lowering fares. Off-peak prices could fall, but much of the extra capacity may just go to meeting unsatisfied demand.
Competition should force prices down elsewhere, if secondary routes flourish. Ryanair, Europe's leading low-cost airline, has even promised a new venture linking the likes of Birmingham, U.K., and Baltimore.
Bigger airlines also are planning new premium services. BA's OpenSkies subsidiary will connect Brussels and Paris with New York, using airplanes equipped mainly with profitable business-class and premium-economy seats. It remains to be seen whether BA can make it work.
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THE ECONOMIST
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