Terminal 5 Investor Day March 7, 2007
Geoff Want BA Director Ground Operations
Contents • Heathrow today • T5 in Heathrow context - BAA • The T5 opportunity - BA • T5 finances - BA • T5 transition programme - BA
The issues at Heathrow today
Robert Stewart BAA, Commercial Director T5
The Terminal 5 Project – Heathrow Rob Stewart – T5 Commercial Director
Heathrow 2012
North Runway
Terminal 5
Central Terminal Central Terminal Heathrow Area Area East Terminals 1,2,31,2,3 Terminals
South Runway Terminal 4
Terminals 1,2,3
Terminal 4
North Runway
T5B
South Runway
T5A
T5 Hotel Site
Multi Storey Car Park (MSCP5)
Longford River Duke of Northumberland River A3044 N
M25 Spur Aerial View of Heathrow May 2006
T5C
HexEx Bored Tunnels
T5B
PiccEx Bored Tunnels TTS
T5 Station
T5A
Piccadilly Line Reversing Sidings
Heavy Rail Safeguarded Western Extension
N
Aerial ‘Rail’ View of Heathrow May 2006
How are we doing ? • 90% complete and on programme • £3.9 bn spent to date • Safety - AFR 0.2 less than 25% of national level
Progress of the T5 Programme
Big projects go wrong LU blamed for two-year Jubilee Line Extension delay
Running Late
15 September 2000
Railtrack will miss a 2005 deadline to increase slow train paths on the West Coast Main Line New Civil Engineer – 06/01/2000
Dome lurches from crisis to crisis as bankers brought in Architects Journal – 21/09/2000
British Library fails to meet the challenges of the internet age Architects Journal – 30/05/2000
Inquiry pledged into £400m bill for Scots parliament Guardian - April 2003
What were the lessons? • Process, organisations and behaviours must be designed to; – expose and manage risk – promote and motivate opportunities – address behaviours in all relationships
• Leaders must recognise; – change and uncertainty is the norm – a different outcome means doing something different
What did we do different? • Contract – T5 Agreement
• Safety – Incident & Injury Free Campaign (IIF)
• Quality – Behavioural Approach
• Programme – Milestones
Airport Projects – The Challenge • Denver – Baggage System failed • Chap Lak Kok – Operational Readiness compromised • Paris Charles de Gaulle – Systems Failures • Madrid – Poor Airline Engagement
What did we do different? • Baggage – programme, testing, operational trials
• Operational Readiness – programme, allowance safeguarded
• Systems Integration – programme allowance, organisational response
• Airline Engagement – BA/BAA joint working for 10 years
The Terminal 5 Project – Heathrow Rob Stewart – T5 Commercial Director
Jonathon Counsell BA, Head of T5 Development
A new airport for Heathrow
Terminal 5 – vital statistics The Facility • • • •
Site is the size of Hyde Park 1 million cubic metres of concrete Main Concourse (T5A) and 2 Satellites (T5B and C) Underground train links T5A to T5B&C
Capability • • • •
Annual passengers 30m pa + Maximum jetty served stands 48 Minimum connect time (within T5) 60 mins Minimum conformance check time 35 mins
More efficient aircraft operations
T5 is a great opportunity for BA Transforms the BA Heathrow operation – Single Campus operation at last – Room to grow from 2010 – Excellent surface transport connectivity
Its also a catalyst for business change – Improved Customer experience – More efficient Aircraft operations – New and more efficient ways of working
One campus. One operation. One team.
T5 is an excellent opportunity for closer joint BA/BAA working • We have been working jointly on T5 for over 10 years • We have fully integrated T5 Programme Plans • We have worked together to deliver a joint vision, strategies and service level standards for T5
One campus. One operation. One team.
Terminal 5 – longer term growth opportunities • From day one (March 2008) BA will have ~8% of its operation based in T3 (closest terminal to T5) • Our occupation in T3 will be permanent • T5 and T3 together will enable us to secure future growth opportunities at LHR • In addition T5C (second satellite) will now open 11 months earlier than planned in May 2010 providing us with further capacity for growth
Improved customer experience
Departures concourse layout
T5 Premium lounges – background • Principle customer benefit • Lounge access is the top rated Executive Club benefit (Golds/Silvers) • Customer satisfaction declining • Current lounges overcrowded • Improved catering and investment in T1 & T4 in work • 2008 end of Terraces product lifecycle • New lounge concept developed for T5
T5C Departures 1,720 m2 Business case summer 09
T5B Departures 1,760 m2 International
T5C
T5B
T5A South Departures 7496m2 Mainly International: Concorde Room, First and Club
T5A T5A Arrivals 2,492 m2 T5A North Departures 1,797 m2 Mainly Domestics
T5 CIP Lounge Locations Total Area: 15,265 m2 (incl plant rooms)
Exterior main lounge
Club World living rooms
163
Concorde dining room
Operational readiness programme • From September 17th 2007 we commence 6 months of Operational Readiness activity • This is absolutely critical for ensuring an effective and efficient operation from day one • Programme has been jointly developed with BAA, third party control authorities and industry experts • Includes 64 proving trials including 5 advanced trials with > 2000 volunteers • Operational readiness will includes > 10000 individuals familiarised
T5 Migration – the challenge British Airways are moving to T5 in two phases Compass Compass
T1 T1 T3 T3
T4 T4
Ian Milne BA, Head of T5 Finance
BA’s T5 business case proposition We set a financial target to make efficiencies from T5 payback our investment within 10 years of opening. i.e a zero post tax net present value business case target, measured from 04/05 until 10 years post opening.
This target excludes Benefits from improved Punctuality Revenue benefits from a step change in customer experience, e.g. an easier journey through Heathrow and better transfer connection experience.
T5 – capital investment - £m Lounges for our premium passengers
62
Im infrastructure – cabling, applications etc.
56
Airfield sites - EAA and SAA for engineering stores, vehicle repair shop, container holding areas etc.
52
Design fees and architectural consultancy
41
Staff Accommodation within the landside and airside of the terminal
32
IM connected devices – check-in equipment, pcs, etc.
18
Passenger Processing – Self Service Kiosks etc.
7
Other – Ramp equipment, provisions for T5C etc.
62 330
Costs of the Heathrow operation impacted by T5 • Ramp and Passenger Service Agents, Crew report times
P
• Baggage system costs (departures system and operational costs
P
• Aircraft Cleaning (mostly turn round cleans)
P
• Airport Security (cost of aircraft guarding & fast track central search)
N
• Vehicle equipment costs (ramp equipment)
P
• Staff & equipment to distribute Cargo from Ascentis to the Ramp
A
• Engineering staff and equipment for aircraft maintenance on the ramp
N
• IM licences and operational costs for equipment in the terminals
N
• Rent, rates and utilities for the terminal operations
A
• Lounge services including catering
N
• Baggage and Passenger Compensation costs
P
P = Positive impact, N = Neutral impact, A = Adverse Impact
Total Cost Base c£550m
T5 operational cost benefits • Improved punctuality from fully exploiting new working practices in a single campus, with major operational constraints removed, i.e. , no cross runway operations, no cul-de-sacs • Improved efficiency of resources – manpower and equipment from economy of scale of moving 3 terminal operations into one campus (90% in T5) • Better supplier contracts on the back of their own economies of scale • Reduced missed baggage rates and hence lower costs of mishandled bags • Improved aircraft utilisation and deployment as more aircraft are within a single campus • Reduced vehicle costs from simplified and reduced holding of equipment
Customer proposition improvements will deliver improved revenue • Punctuality – in particular improves S/H Premium business • More flights connecting in one terminal and better timed slot integrations – improves L/H Premium transfer yield • Improved capacity deployment to match demand – will improve mix and hence yield • Improved Baggage performance – creates a more attractive Premium transfer proposition • Better infrastructure environment and processes through T5, plus great lounges and in air products make LHR for BA customers more attractive
Launch readiness costs in 07/08 • Familiarisation – Ensuring our staff know where and how they will work in T5 • Proving trials – testing the facility works • Migration – Moving people and equipment on nights of moves • Mobilisation – Making sure airside passes etc. work • Day 1 Contingency – Support resources for initial operation • Total cost £25m in 07/08
Geoff Want BA, Director Ground Operations
Vision for Heathrow • What our customers want – Speed through airport – Depart on time with bag – Lounge for premium customers
• How we operate – Simple, safe and standard processes – Enabled by technology – Deliver to plan
We are now implementing T5 Transition Programme Best in class punctuality… 50% Ontime Best in class efficiency One agreed, intuitive process PASSENGER PREPARATION
BAGGAGE PREPARATION
TURNROUND & LOGISTICS
MPE Reduction
PLANNING & CONTROL
SAFETY & SECURITY corp target Standard, transparent work agreement
Implementation: passenger i
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Connections
Customer Service
FBD
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Customer Service
FBD
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Connections
Implementation: passenger Gate 35
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Connections
Connections
Customer Service Wave 3
Customer Service
Fast Bag Drop Wave 2 Self Service Wave 1
Customer Service
FBD
Self
Self
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FBD
Landside
Self
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Implementation: passenger 100% of people green at the gate No changes at the gate Make Transfer pax green at point of origin
Trial JFK last week
Conformance checks before allowed airside
Manage the concourse
Disrupted passengers selfserve online
33% achieved on Shorthaul
Seating Policy 4 Dec
80% self service check-in
Excess baggage is pre-paid
Documents (incl Eticket) provide easy to read customer info and T5 wayfinding
40% 0f customers check-in online before arrival at airport
T4 Euro 77% Domestics 75%
Implementation: baggage