Heathrow MD quits

Published: 15 May 2008

Mark Bullock, Heathrow's managing director, is leaving the airports operator in the wake of a management restructuring instigated last month by BAA.

He will be replaced by Mike Brown, currently chief operating officer at London Underground, who joins BAA in September.

Colin Matthews, the chief executive brought in on 1 April to overhaul BAA, unveiled a management shake-up last month that eliminated several top jobs at the group and elevated Bullock to the executive board. Matthews is merging BAA's nine-strong corporate team with its Heathrow board to give him more hands-on control of Britain's premier airport.

Previously, the Heathrow managing director had wider responsibilities, including for finance, strategy and human resources.

Bullock's post under the new structure would have meant less daily involvement at the airport, a role, he said, that he did not covet. "The managing director role at the airport will change substantially under the new structure being introduced by Colin Matthews and, while I understand and support those important changes and the renewed focus on day-to-day operations, the time is clearly right for me to move on and take on new challenges," he reportedly said.

News of Bullock's departure coincided with first-quarter results from BAA's controlling shareholder, Spanish construction group Ferrovial. Earnings before interest, tax, depreciation and amortisation fell 12.4pc to €557m (£443m), with operating profits at the heavily indebted BAA plunging 70pc to €45.6m.

Ferrovial wants profits from BAA to almost treble to $1.3 billion in the next four years.

Heathrow is expected to return profits up from £172 million this year to £848 million by 2012. Ferrovial's aggressive plans for its airport assets are based on average growth in passengers of 3% a year at each of the airports. By 2012, BAA expects to be handling 143.2 million passengers, compared with 127.7 million now. At Heathrow, passenger numbers are expected to jump to 77.7 million from 69.9 million in 2008.

Comments

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Kilgore said on 17 May 08:

This is not a good sign of what's to come: "Ferrovial wants profits from BAA to almost treble to $1.3 billion in the next four years." That is an overly ambitious goal.

There are two ways that this profit margin can be tripled. First, increased landing fees and other charges passed on to the customer or higher rents for the already over-priced shops in the terminals. Second, reduce expenditures for operation and staff services.

"What?", you say, "the taxes and fees are already too high and the service is terrible and getting worse."

Perhaps this would be a good time to discuss the wisdom of privatisation.

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