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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Customer Service

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Implementation: passenger Gate 35

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Connections

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Customer Service Wave 3

Customer Service

Fast Bag Drop Wave 2 Self Service Wave 1

Customer Service

FBD

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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