New boss pledges ‘even better’ Heathrow. But former chief’s legacy leaves more questions than answers.
Heathrow’s new boss pledged to make Europe’s biggest airport “even better” this morning as he takes charge for the first time.
Thomas Woldbye is flying in from Copenhagen Airport to steady the ship after a near decade-long tenure from combative chief John Holland-Kaye.
It was all smiles this morning, as Woldbye declared that the West-London hub remains the “envy of much of the world.”
“I’m looking for how we can make Heathrow even better for our customers and the British economy. It’s humbling to have the opportunity to take on the challenge and I’m excited to get started.”
Woldbye will spend his first day “meeting colleagues across the airport,” as he begins to get to grips with the task ahead of him. And it is some task.
Holland-Kaye’s tenure left Heathrow in the lurch on a number of key issues. Chief among them is that the airport can’t seem to turn a profit.
That’s largely down to a growing multi-billion debt pile, which the airport has failed to shake off — it now sits at near £16bn, up from £14bn four years ago.
Russ Mould, investment director at AJ Bell described the airport’s debt as “very substantial”, although noted credit ratings agencies believed it has “sufficient cash to comfortably service [it] in the near term.”
Woldbye will also have to repair fractured relations with airlines following a protracted dispute over the amount the hub is allowed to charge for using its landing strips.
Carriers were infuriated at Holland-Kaye’s stance on the fees, which put him at odds with much of the industry and saw the dispute taken all the way to the UK’s competition watchdog.
“The ratings agencies also felt the CAA price cap framework for 2022-26 was as expected, although airlines and airport alike seem unhappy with it, so this will be one of the most pressing issues in Mr Woldbye’s in-tray,” Mould said.
Woldbye will not have the luxury of this summer’s record demand for travel, as his tenure begins in the typically quieter winter months.
Despite traffic being high, Paul Charles, chief executive of travel consultancy The PC Agency, warned the quality of service had fallen behind other major hubs worldwide, such as Abu Dhabi, Helsinki and Singapore, which could put future flyers off.
“Global travellers now expect a much higher standard than has been delivered by Heathrow and you have to wonder where all the passenger fees have gone in terms of investment. Escalators are often broken, some terminals look uncared for and Heathrow’s not got the glamour that it should have,” he said.
“The new CEO has got to do things differently, making Heathrow a visionary hub which is well-designed.”
What could define Woldbye’s tenure is whether he finally gives the airport’s investors, which include Spain’s Ferrovial and state funds in Qatar, China and Singapore, some clarity on the future of the long-delayed third runway.
The project received a parliamentary seal of approval in 2018 but still fails Labour’s carbon emissions tests, while planning delays continue to pose a threat.
And with inflation soaring, costs look likely to balloon in the coming years. It would be a mammoth task to turn that project into a success, one which Woldbye cannot afford to shy away from.
In the near-term, Charles suggests “less focus on a third runway and more focus on maximising the passenger experience with the existing assets.”