July 2024

“Zombie” Heathrow’s problem is not snow, it’s greedy owners and debt

A little bit of snow once again brings total chaos to Britain’s airports, particularly Heathrow. Strangely, a similar amount of snow hardly affects flights at Scandinavian airports such as Oslo, Stockholm, Helsinki or Copenhagen. So why does it cause so many problems at hopeless, hapless Heathrow?

The problem is debt. Heathrow is owned by BAA and BAA is owned by a consortium led by Spanish company Ferrovial. In the last financial year, BAA made an operating profit of £572m. But this was turned into a loss of £256m by BAA’s increasing interest payments. Last year BAA increased its debt by £3bn yet it managed to pay generous dividends to its Spanish owners.

Like many other British companies (see my book GREED UNLIMITED) BAA’s owners have turned it into a “zombie” company – a company which has so much debt that it’s barely alive. Most of its huge earnings go into interest payments, meanwhile its owners keep increasing debt levels so they can pay themselves massive dividends.

Because of its debt levels (and rising interest payments) BAA doesn’t have the money to pay for sufficient staff or for enough snow-clearing equipment. All the money goes to banks and into the Spanish owners’ pockets.

So, don’t believe BAA’s lies about doing everything possible to get flights leaving on time. If BAA hadn’t been turned into a zombie, it wouldn’t be so badly affected by a bit of snow. BAA’s problem is not snow – it’s the greed of its owners and the debts they have built up to make themselves rich.

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