London, UK – Also delayed the delivery of Airbus A-380s
(WAPA) – British Airways announced a 20% cost-cutting plan for this year, to face economic difficulties caused by the international air transport crisis. Among them there is also the delay of the delivery of 12 Airbus A-380s ordered by the carrier.

The airline announced that only the first of these aircraft will be delivered in 2012, before the beginning of London’s Olympic games; as for the others, five will be delayed of about five months, while the following six would be delivered two years after the initial schedule, until Autumn 2016. Initially deliveries were expected to end in 2014.

British Airways also stated that it would cut its Summer capacity by 3.5%, a 1% more than the initial estimate, and by 5% in Winter. After announcing the grounding of 16 aircraft for this Winter (see AVIONEWS), the airline added it will also ground three Boeing 757/200 for Summer 2010 and a further 747/400 for Winter 2010. (Avionews)

Heathrow’s flagship new terminal, hailed as the gateway to the 2012 London Olympics, will not be ready for the event.

By David Millward, Transport Editor
Last Updated: 11:48AM BST 02 Sep 2008
Telegraph

Heathrow Terminal 5
The shambolic opening of Terminal 5 earlier this year has thrown the timetable into complete disarray Photo: AFP/Getty Images

BAA, Heathrow’s operators, have admitted that at best only part of Heathrow East – which will replace Terminals 1 and 2 – will be open for business when competitors and delegates arrive for the 2012 games.

After the spectacular Beijing Olympics, the news of the latest delays will be seen as damaging Britain’s reputation as well as that of BAA and its Spanish parent company, Ferrovial.

“This is yet more embarrassment for BAA, which will leave many of their airline customers fuming,” said Theresa Villiers, the Tories’ transport spokesman.

“BAA need to get their act together, not just on Heathrow East but on making the airport better across the board.

“The performance of Heathrow will play a major part in determining whether the 2012 Olympics are a success or not and we need a much higher quality of customer service from BAA than we have had over recent months.”

Last month the Competition Commission called for BAA to lose its monopoly over London’s airports, advocating that the company should be forced to sell Stansted and Gatwick.

This, it was argued, would mean that service standards would improve – and “Heathrow hassle” could become a thing of the past, if all three airports were in competition with each other.

The extent of the delay remains unclear, but it is understood that several major building contractors that work is now unlikely to start until next year.

More than 50 airlines at Heathrow are involved in a complex game of musical chairs following in readiness for the new terminal.

But the shambolic opening of Terminal 5 earlier this year has thrown the timetable into complete disarray.

The next shift should have seen British Airways flights to Barcelona, Madrid, Lisbon, Nice and Helsinki move from Terminal 1 to Terminal 3 in just over a fortnight.

This will now not take place until next January. Other airlines to find their plans scrapped include Lufthansa, which has made little secret of its annoyance and has hinted that it could take legal action.

Heathrow is now considering an array of options alleviate the problems it faces.

The most dramatic change will see the creation of a second satellite building at Terminal 5 by 2010 – at least two earlier than previously planned.

This has been done after British Airways projections were re-evaluated, with the airport predicting that demand will be heavier than previously.

A spokesman for BAA said that other terminals had not been ignored. “All of our terminals are being refurbished and we hope to have at least part of Terminal East ready in 2012.”

By Mark Kleinman
Last Updated: 1:26am BST 31/08/2008
The Telegraph

Sir Richard Branson’s Virgin Atlantic has engaged heavyweight City advisers to engineer its role in a round of airline industry consolidation likely to be fuelled by the high oil price and an increasingly tough operating environment.

People close to Virgin Atlantic say that Credit Suisse had been hired by the company some time ago and that no talks are currently being held between Branson, who is Virgin Atlantic’s president, and either BMI, its smaller rival, or BMI’s second-biggest shareholder, Lufthansa.
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However, the recruitment of a leading investment bank to provide counsel on a prospective change of ownership at BMI reflects Branson’s determination that Virgin Atlantic should play a prominent role in future aviation sector takeovers.

In an exclusive interview with The Sunday Telegraph, Branson reiterated his belief that a combination of Virgin Atlantic and BMI would represent an obvious next step in the long-term consolidation of an industry which only on Friday saw another transatlantic carrier, Zoom, collapse, leaving thousands of passengers stranded.

“There is considerable logic in Virgin and BMI working as one. We do not overlap on routes, [and a merger] would give us a good short-haul network and give them a good long-haul network. By doing that it would create a more formidable competitor to British Airways,” he said.

BMI’s future ownership has been the subject of ongoing speculation for years, but it has intensified in recent months because a put option for Sir Michael Bishop’s 50 per cent plus one share, which allows him to sell his stake to the German flag-carrier at a pre-determined, although undisclosed price, expires next year.

Bishop has declined to comment in detail about the arrangement with Lufthansa, which also has a call option on his stake that becomes effective in December and lasts until June 2009.

BMI is seen by analysts as a particularly valuable business because of its ownership of the second-highest number of take-off and landing slots at Heathrow Airport after BA.

“We are watching the situation. Michael really doesn’t have anything to do with BMI any more in that he has effectively given up a decision to Lufthansa over future ownership,” said Branson.
# More on transport

Speaking from a holiday on the island of Necker this weekend, Branson attacked the “monster monopoly” which he argues would be created by the approval of an alliance between BA, his long-standing bête noire, and American Airlines. The proposed tie-up, which was announced earlier this month, has been rejected by regulators on two previous occasions, and Branson sees no reason for them to alter their stance this time around.

On Friday, the European Commission said that it was launching a probe into whether the BA-AA alliance and BA’s planned merger with Iberia of Spain violated EU anti-trust laws, a move greeted by Branson with typical enthusiasm.

“It is great news, and the fact that they have launched it before a BA/AA filing [to them] demonstrates that the Commission is taking it very seriously,” he said.

Branson’s rampant opposition to BA’s plan to tie up a larger chunk of the transatlantic market has always smacked of pure economic self-interest – he admits that Virgin “will be seriously damaged” by his rivals’ alliance – but he also insists he is adopting a role the British public has come to know well during the last 20 years: that of the corporate altruist, a ruthlessly successful businessman who has become fabulously wealthy by defending the consumer’s interest.

“If Virgin is worried, then the public should be worried. Together, BA and AA will twist the arms of travel agents to give them business because of their dominant share of the market. With the business market, BA/AA will go to the JP Morgans and the Goldman Sachs who will have to use them because of their domestic networks, transatlantic networks and European networks. It will be sheer monster monopoly dominance.”

This weekend, Branson also accused BA of misleading City analysts and shareholders over the likely timetable for securing regulatory clearance for their alliance, referring to comments made by Willie Walsh, BA’s chief executive, that he expected to have it approved “on this [the Bush] administration’s watch”, in other words, within the next three months.

The Virgin president poured scorn on that expectation. Sources in Washington expect the Department of Transport to pass judgement on the tie-up by the middle of next year “at the earliest”.

“We would hope that the next administration is a more consumer-friendly administration,” said Branson, who has written to the presidential candidates Barack Obama and John McCain to express his views.

BA rejects Branson’s claims about the impact of a deal with AA, saying he is regurgitating arguments “used in a completely different regulatory and competitive environment in 1996 and 2001″. A BA spokesman denied that the company had referred to a formal time frame for clearance.

“Obviously, we would welcome it if we were given approval before the end of the year, but if it runs into next year, so be it,” said the spokesman.

Last week, BA scored a rare public relations victory over Branson, the master of the photo-opportunity, when it brought home the triumphant British Olympic team from Beijing.

Yet days later, Branson was back to his own favourite participation event: riling his larger rival. Financial results which looked strong in the context of the climate saw Virgin Atlantic claiming it had won significant new business from the fiasco over Heathrow’s Terminal 5. An increase in business travellers helped swell Virgin Atlantic’s pre-tax profit before exceptional items to nearly £61m in the year to February, up from £44m a year earlier. “The people who defected will stick with us,” said Branson.

In addition to BMI and the planned BA/AA alliance, Branson has the ownership of his own flagship company to consider. Singapore Airlines, which acquired a 49 per cent stake in Virgin Atlantic in 1999, signalled last year that it was reviewing options for the shareholding, including a sale or an initial public offering.

Virgin Atlantic has pre-emption rights over the stake, although Branson said he was unclear about the price his shareholder would be willing to sell at. “They might have changed their minds. I am still interested in buying it from them.”

Branson has other airlines to think about, too. His Virgin Group, where he is chairman, is locked in talks with a potential partner in Russia as he considers the launch of a domestic airline there. The negotiations, which have been taking place since the beginning of the year, involve Virgin buying a stake in Sky Express, a low-cost commercial carrier.

Branson insists he is undeterred by the sense of crisis that has engulfed other foreign investors in Russia, including BP, the oil company, in recent months.

“The West missed a major opportunity when [Boris] Yeltsin [the former Russian president] was in power, when Russia wanted to join Nato and the West turned him down,” he said.

“It is incredibly sad that Russia is not now part of Nato or of Europe. I hope the politicians can make amends. Businesspeople have got to do their best to trade with Russia.”

Virgin’s moves into overseas domestic airline industries have not always met with unmitigated success. The group is considering offloading or reducing its stake in its business in Nigeria because of a dispute with the country’s government over the location of its domestic operations.

In Australia, where Branson is now the biggest shareholder in the listed airline Virgin Blue, he has seen the company’s share price slump this year, not unlike the stock market performance of many other airlines around the world as investor sentiment across the industry continues to darken.

Next week, Branson will publish his latest book, a guide called Business Stripped Bare to doing business, which marks a departure from the string of autobiographies he has published in the past.

One suspects Walsh will not be among those receiving a free copy.

“We’re going to wage one hell of a campaign to stop their deal happening,” said Branson.

VisitTimes Online

BAA has been appointed as a security adviser to the organisers of the 2012 Olympic Games in a move that has been ridiculed by airlines, which have criticised the airports operator for long queues and poor service.

The Olympic Delivery Authority (ODA) is using BAA as an adviser on issues such as selection of security equipment, the amount of equipment required and crowd-handling, The Times has learnt.

BAA said yesterday that it was sharing its knowledge and experience on security matters with the ODA and would continue to do so. The relationship is thought to be informal and unpaid.

However, BAA’s involvement has surprised its airline customers, which have repeatedly criticised security arrangements at Heathrow, Gatwick and Stansted over the past two years.

Virgin Atlantic said: “BAA will certainly have plenty of knowledge about queues to share with the 2012 organisers. The British have almost perfected it as an Olympic sport.”

Last week the Competition Commission recommended in a draft report that BAA’s monopoly control of airports in the South East of England and Scotland should be broken up. One of the reasons it cited was poor service, including in the provision of security to airlines and passengers.

Ryanair, one of BAA’s fiercest critics, said: “If BAA have been appointed security advisers for the 2012 Olympics, the athletes will be lucky to get in by 2013. It will take at least six months for BAA to clear people through security.”

BAA has hired an extra 1,500 security staff and it said that its investment had resulted in 100 per cent of Heathrow passengers waiting less than ten minutes in queues last month, although the Competition Commission has criticised the way in which BAA collects this data.

BAA’s involvement with the ODA comes as preparations for the 2012 Games accelerate after the closing ceremony in Beijing on Sunday.

A shortlist of companies has been drawn up to supply security scanners and walk-through metal detectors, which includes Smiths, General Electric, Rapiscan and L3. It has been estimated that 1,000 of these devices will be needed.

Next month the ODA is expected to announce that it is seeking expressions of interest from companies to integrate all aspects of the security systems at the Games. BAE Systems, Europe’s largest defence company, wants to move into this market and said yesterday that it would consider a bid. Lockheed Martin, the American defence company, and Siemens, the German engineering giant, are also thought to be interested.

The 2012 budget of £9.3 billion includes £354 million for site security during construction, but the total cost, which will include policing and security service involvement, has not been revealed.

It’s the end of the affair for Australia and continental carriers, writes Peter Needham.

Where have all the European airlines gone? One by one, the airlines based in continental Europe that used to fly to Australia have departed permanently. They are still represented here but they no longer fly their own aircraft into this country. The trend has accelerated over the past decade, with the final example, Austrian Airlines, pulling its aircraft out of Australia last year. Only two European airlines – British Airways and Virgin Atlantic – still fly to Australia with their own aircraft.

News this week that Franco-Dutch airline Air France-KLM is moving to take over Italy’s Alitalia raises a few names rich in Australian aviation history. KLM Royal Dutch Airlines started flights to Australia in 1938, with a one-way Sydney-to-London fare priced at slightly more than a year’s salary for the average Aussie. The journey took eight days. Alitalia began services from Italy to Tokyo and Sydney in 1960. Thousands of Italians who migrated to Australia in the 1940s and 1950s made their first trip back to the old country on Alitalia. Alitalia was quite colourful at the time – one passenger described its economy class as “like a flying Italian restaurant”.

UTA French Airlines used to fly here, too, before Air France absorbed it in the early 1990s. AOM French Airlines, taking advantage of the withdrawal of Air France from Sydney, began flying to Australia via Colombo in 1995. AOM, world’s biggest operator of DC10-30 aircraft at the time, was a colourful operator. On an AOM flight to Europe, I visited the galley in the early hours to get a glass of water, only to surprise two flight attendants (of opposite sex) locked in a passionate embrace while another swigged cognac from a bottle.

European airlines to have withdrawn from flying to Australia under their own colours over the past 20 years include Alitalia, Lufthansa, Air France, AOM, JAT Yugoslav, KLM, Olympic Airways and Austrian Airlines. Some of those carriers no longer exist or have merged. (In the case of JAT, even its home country no longer exists.) Other airlines, such as Lufthansa, still sell their tickets here but on a code-share or interline basis, which means passengers heading to Europe must fly on another airline to an intermediate point to join the airline of their choice. Book a flight to Europe with Lufthansa and you could fly from Australia on Singapore Airlines, South African Airways, Virgin Atlantic, United Airlines, Cathay Pacific or Air China. You’ll join a Lufthansa flight somewhere but you certainly won’t depart Australia aboard a Lufthansa aircraft.

The decision by Europe’s airlines to withdraw from Australia has much to do with the climbing price of fuel and the difficulty of turning a profit on the route, particularly in business class. It also reflects Australia’s geographical position. From Europe, it’s the end of the route (unless an airline elects to continue to New Zealand before turning back). Many European airlines find it more economical to fly to major hubs in Asia, such as Bangkok, Singapore, Hong Kong or Kuala Lumpur. There, passengers heading for Australia transfer to Asia-based airlines and fly the rest of the way.

Major new routes to Europe through the Middle East have emerged. Airlines from oil-rich states wield much financial muscle. They include Emirates (based in Dubai) and Etihad (Abu Dhabi). Both are expanding rapidly and have direct, same-airline services from Australia to Europe. Emirates serves more than 100 destinations, including London, Manchester, Glasgow and most major European and Australian capitals. It will start flying a giant new Airbus A380 aircraft on the Dubai-Sydney-Auckland run from next February. Etihad, which links Australia with London, Manchester and other European cities, was recently reported to have earmarked $22 billion for 100 new aircraft.

European airlines are merging, a trend set to continue as the EU becomes one market. Small national carriers can’t survive unless they join bigger airlines, either by merging or through alliance. At press time, struggling Alitalia is likely to accept the overtures of Air France-KLM. It reacted coldly to an earlier approach by Russia’s Aeroflot. Air France and KLM merged about five years ago. Mergers are seldom smooth because much national pride is wrapped in airlines. Spain’s Iberia has been up for grabs for some time but British Airways has so far been barred from taking it over.

The speed with which airlines can redeploy their aircraft to more lucrative routes was demonstrated vividly by Austrian Airlines. Austrian’s record in Australia was successful – starting when Lauda Air began flying here in 1991 with just one weekly flight. Lauda kept adding services to cater for demand and continued to do so after being taken over by Austrian Airlines. By 2004, Austrian was doing so well out of Australia, its services were tipped to reach twice-daily frequency. Australia and New Zealand became Austria’s third biggest non-European tourism source, after the US and Japan. Austrian’s general manager South West Pacific, Richard Froggatt, was awarded the Knight’s Cross First Class, a high Austrian honour usually reserved for heads of state and poets laureate.

By last year, the party was over. Austrian withdrew all its aircraft from Australian routes. It now favours the Middle East, Central and Eastern Europe.

Will European airlines return? The main hope lies with Canberra, which is keen to negotiate a more liberal “open skies” aviation agreement with Brussels. That might – just possibly – lure one or two European airlines back here.

European airlines, in common with counterparts around the world, are joining global alliances to gain economies of scale. The two biggest pacts are the Star Alliance and oneworld. Star Alliance groups 20 airlines, including such heavyweights as Lufthansa, United and Singapore Airlines, as well as Air New Zealand and Austrian. Its newest member, Turkish Airlines, will join this week. Members of oneworld include Qantas, British Airways, American Airlines and Cathay Pacific.

British Airways co-operates closely with Qantas on the route. They share a “joint services agreement” that allows them to operate virtually as one carrier, co-ordinating their scheduling, marketing and customer service activities and pooling revenue.

Virgin Atlantic has not yet joined one of the big alliances, making it a bit of a maverick. It flies daily between Sydney and London Heathrow, via Hong Kong. A spokesman said Virgin Atlantic enjoyed a healthy passenger mix of leisure, corporate and visiting friends and relatives travellers on the route.

SKY ALLIANCES

* European airlines, as with their counterparts around the world, are joining global alliances to gain economies of scale. The two biggest pacts are Star Alliance and Oneworld. Star Alliance includes heavyweights Lufthansa, United Airlines and Singapore Airlines, as well as Air New Zealand and Austrian Airlines. Oneworld’s members include Qantas, Cathay Pacific and American Airlines.

* British Airways and Virgin Atlantic are the only two European airlines still using their own aircraft to fly to Australia. BA shares a “joint services agreement” with Qantas that allows them to operate virtually as one carrier, co-ordinating their scheduling, marketing and customer service activities and pooling revenue.

* Virgin Atlantic has not yet joined one of the big alliances, making it a bit of a maverick. It flies daily between Sydney and London Heathrow, via Hong Kong.

Rashid Razaq, Evening Standard
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British Airways is sending thousands of suitcases by road to a sorting office in Milan because of the huge backlog created by chaos at Terminal 5.

The airline will use lorries to transport some of the 20,000 bags that have built up at Heathrow following the 430 flight cancellations since the new building opened on Thursday.

Luggage will be processed at a “specialist sorting facility” in Italy before the items are reunited with passengers in mainland Europe.

Although it takes 24 hours to reach Milan by lorry, BA believes it is still quicker than transporting the bags by air as they will not have to wait to be screened.

Luggage belonging to domestic passengers is being driven to Manchester and Scotland for processing.

Faults with the automated baggage system at T5 means it cannot be used to process the delayed bags, leaving staff struggling to cope.

BA said it was unable to offer any guarantees on when passengers waiting for missing luggage could expect to be reunited with their suitcases. At current rates the backlog could take weeks to clear.

Many bags belonging to holidaymakers are likely to find their way to the correct hotels only after the owners have left. They may then be returned to Milan to be sorted again by the private contractor the airline has employed.

A BA spokesman said: “When a bag travels with its owner it is screened once. When a bag flies without its owner it requires an enhanced level of screening.

“We ask our customers to keep us updated if their address details change. That way we can ensure that their bags will be returned to them at the right location.” Tighter security for bags being transported without their owners was introduced in the wake of the Lockerbie disaster in 1988. The bomb which downed the Boeing 747, killing 270 people, was in an unaccompanied suitcase.

BA has offered passengers ” immediate expenses” if their bags are lost on their way out to a holiday, but has not specified the amount customers can expect.

A family going on a skiing holiday in Switzerland last year received only £100 from BA despite having to spend £1,000 on replacement ski equipment when their bags were lost for a fortnight.

Meanwhile, plans to give the Olympic torch a grand reception at Terminal 5 have been shelved because of the fiasco.

Organisers of the London leg of the torch relay have instead decided to re-route the Olympic flame through the royal suite at Heathrow when it arrives in Britain from St Petersburg on Saturday evening.

The Chinese-led relay team was due to use the VIP section at the new terminal, but will instead land at the dedicated building used by the Queen and other dignitaries arriving on private jets.

A spokesman for airport operator BAA said: “This is standard practice for VIP arrivals at Heathrow. The Athens torch relay crew arrived in the same way in 2004.”

BA’s botched Terminal 5 opening is sadly typical of Britain’s transport system

29 March 2008

The destinations may have been different – Norway and South Africa rather than Norfolk and Suffolk – but the breathtakingly botched opening of Heathrow Terminal 5 was the week’s second example of corporate complacency in the face of transport meltdown.

On Tuesday, the over-running engineering works that have lately become a bank holiday tradition brought rail gridlock to East Anglia. By Thursday, the “T5″ debacle had redefined institutional hubris. At the end of a humiliating week, a nation that has historically produced some outstanding travellers is now synonymous with inertia, not mobility.

“Inquire airline” proved the most popular destination on the departures boards at Terminal 5 yesterday afternoon. The only airline, of course, is British Airways, which deployed the vague phrase in preference to the more accurate “your BA flight’s been cancelled, pal, and you’re going nowhere”. Yet until the first passengers had the temerity to turn up and expect to be transported along with their luggage to their chosen destination, there had been nothing imprecise in the claims about the T5 experience – and, in particular, the world’s most expensive baggage system: “Extensive and repeated testing of the system by BA has taken place for six months,” trilled the publicity, “to make sure it is in full operation readiness when T5 opens for business.”

Operationally, Terminal 5 has not proved much more disastrous than the pre-Olympic fiasco of Athens (where Olympic Airways boarding passes referred passengers to gates at the old airport) and the travails of Bangkok’s airport (parts of which have been sinking into the mud east of the Thai capital). The difference is: the unqualified assurances by BA’s boss to prospective travellers.

When Stelios Haji-Ioannou started easyJet in 1995, his policy was simple: “Under-promise and over-deliver.” All he offered was a flight from London to Glasgow for £29; if you got a smile and an on-time arrival, so much the better. British Airways and its Spanish-owned landlord, BAA, have turned that maxim on its head. They promised the best aviation experience since the Wright Brothers, and got it dismally wrong.

The failure to provide thousands of travellers with the most basic requirement of an airport, to allow them to fly, has divertedattention from some of the other foibles of Terminal 5. Arriving passengers who wish to check in for an onward flight are required to travel down two levels to the Underground station before ascending five floors to departures, all in lifts that have no call buttons to push from the outside, nor floor numbers to push once inside.

Ironically, the debacle at Terminal 5 has helped the rest of the airport function more efficiently. Although some terminals have been fuller than usual due to refugees from T5, the fact that BA cancelled an average of three departures and three arrivals an hour during the day eased pressure on the apron and in the skies.

The essential amateurish nature of our transport enterprises was made clear at 4am yesterday. I went to a bus stop in central London to catch the 4am bus to Heathrow so I could hopefully meet some of the staff and talk to them. The bus did not show up. But in a very British way we queued in the rain for a bus that did not come to try to reach an airport terminal that did not work.

Upset, resentful and baffled: that sums up not just the tens of thousands of passengers whose plans were wrecked in the first two days of Terminal 5 “live”, but also the hundreds of staff in the front line. British Airways has its work cut out to patch up relations with its employees, never mind its customers.

At the end of April, the stresses on T5 will double when many intercontinental flights from Terminal 4 are switched. Yet even when all the moves are completed, a significant proportion of transit travellers will still face tortuous inter-terminal connections: Sydney, Singapore, Lisbon, Helsinki and other notable cities are excluded from the new facility. Indeed, one irony about this Spanish-owned piece of infrastructure (BAA is part of Ferrovial) is that you can go to a dozen countries around Europe – but not Spain; if you have a ticket to Madrid or Barcelona, you need to be at Terminal 1. Or 2. Or 3. Life at Heathrow seems destined never to be easy.

Lord Rogers’ elegant steel-and-glass gateway to the skies could have amazed the world. But the chance was lost, and instead the airport, city and nation have amused the world.

More than an hour after arriving at a gleaming new Terminal 5, and still waiting to be reunited with her luggage, a frustrated Karina Lehnen declared: “It’s a shambles”.

On a day that had been trumpeted by BA and BAA executives as heralding the future in air travel, most of her fellow travellers agreed.

Despite 18 months of trials, state-of-the-art computers, 10 miles of conveyor belts and a capacity for 12,000 bags an hour, the first day of operations at the world’s newest terminal had descended into chaos and misery for thousands of passengers.

“The money on this terminal was not well spent, the layout is rubbish and if I could avoid this airport I would never come back.”

She was not alone in her frustration. Hundreds of passengers last night expressed their fury at the flight cancellations and delays that ensued from the breakdown in BAA’s sophisticated new baggage system.

By last night at least 33 flights had been cancelled, while rumours circulated from disgruntled handlers that only 40 per cent of bags were making it to the right destinations on time.

Melanie Browden, who flew into the new terminal from Los Angeles, said that she waited three and a half hours for her bag: “There was no information at all. I asked one of the managers what was going on and they laughed at me, telling me, ‘this is what happens with a new terminal.’ ”

Satyanadan Naidu had flown in from California to visit her mother, who recently suffered a heart attack. Ms Naidu commented that the meltdown at the airport was “enough to give me a heart attack as well”.

Many passengers, frustrated by the delays, walked out of the baggage reclaim without collecting their luggage. Kate Adam, 39, gave up after 90 minutes: “I am furious. Staff have been really surly. They can send my bags on to me.” In the early afternoon, as British Airways admitted a “few minor problems” had blighted the day, a huge queue of more than 100 people snaked back from the flight cancellation desk.

Passengers described the debacle as unacceptable, also criticising the lack of organisation and lack of information that was passed on to them.

While hitches on the first day of operations were acceptable, they said, complete chaos was not.

Robert Looker, newly arrived from San Francisco with his family, was none too impressed after having to wait two and a half hours for his luggage. “Everyone accepts teething problems on the first day,” he said. “The whole concept of the new terminal is the effortless, seamless transition from place to place, but in this case, it has failed to do that.”

Jason Barrow, a broker from Radleet, Hertfordshire, spent three hours by an unmoving conveyer belt, after arriving from Amsterdam. “We couldn’t get off the plane at first because the first set of steps appeared broken. Then, we were told our luggage would be delayed for more than two hours, without any explanation,” he said. “There are a few irate people here.”

One of them was Joan Harpham, who lost her bag during the long haul from California. “When we left San Francisco, we were really excited at arriving in this brand-new terminal. But with all these problems, it is not the nicest reception.”

Shortly before 5pm, passengers waiting in the departure hall were told that no-one would be permitted to fly with their baggage for the remainder of the day. It left many of them unable to travel.

But BA refused to put them up in a hotel. The airline gave passengers a telephone number to re-book their flights, and a message explained that the company was “unable to provide a hotel room during this disruption”.

Its message continued: “If you make your own arrangements we will be happy to consider reimbursement of some of your out of pocket expenses.”

Some would-be passengers bedded down in the airport rather than incur even more costs for their day.

One Greek couple said that they did not want to pay the £200 demanded by local hotels and were preparing to stay awake until their 8am flight to Athens.

The pair, who did not wish to be named, said: “I don’t think we’re going to sleep but we just didn’t want to pay that kind of money. We come from Greece where we have lots of complaints about Olympic airlines but you always think British Airways is going to be perfect.”

One sign in the new terminal said “fast bag drop” — it was anything but. The queue hadn’t moved for half an hour and Robin and Barry Watts were getting anxious. The flight at stake was a to their home in Australia, with a connection in Hong Kong and accommodation already paid for.

“When we discovered we would be flying on the first day of the new terminal,” said Robin Watts said, “we were excited that we would be making history. Now that looks like it’s going to backfire and could be memorable for all the wrong reasons.”

As the last of the sunlight filtered through the spacious terminal, passengers were left with no choice but to hang around and become increasingly frustrated. Chris Smith, 26, an off-duty pilot, was beginning to accept that he probably wouldn’t make it to Aberdeen as scheduled.

“Every airport has its problems but you just have to grin and bear it,” he said, generously.

Now that London Heathrow International Airport’s Terminal 5 is open for business, as many of 50 of the 90 airlines that operate from Heathrow will begin transferring operations to their new home in Terminal 5. British Airways will move 70 percent of its Heathrow operations to the new terminal, and also moving some of its Gatwick business to T5 as well.

American Airlines will transfer all its Gatwick services to Terminal 5, and with the new open skies agreement between the European Union and the United States, many more American airlines will be able to fly freely between the US and Heathrow. Continental, US Airways, Delta and Northwest will all begin their trans-Atlantic services from T5 when the agreement takes effect march 30th.

Terminal 5 is not the last of the Heathrow building projects. Terminal 2 will be torn down (to the delight of many) to make way for the Heathrow East facility, which will accommodate the Star Alliance in time for the 2012 Olympic Games.

By THOMAS WAGNER

LONDON (AP) — British Airways showed off its new terminal at Heathrow Airport on Tuesday, a light-flooded, gleaming white modern facility with some of the latest technology, a first-class lounge with a cinema and a five-story-high wall of windows offering a view of Windsor Castle.

Terminal 5 has 112 stores and restaurants and cost $8.4 billion. It took British airports operator BAA seven years to build as part of an effort to improve the world’s busiest international airport in time for the 2012 London Olympics.

The terminal will only serve BA customers and will handle its first flight March 27.

Robert Boyle, BA’s commercial director, told reporters on a tour of the new terminal that the airline cannot afford to have its reputation compromised by inadequacies at Heathrow.

“We have to compete with business-class-only airlines, traditional ones and no-frill ones,” Boyle said. “Each year, surveys of frequent flyers around the world praise BA and criticize Heathrow for its delays, poor baggage handling and crowded terminals.”

The terminal, designed to make travel easier and more comfortable, features state-of-the-art equipment such as X-ray machines that don’t require travelers to remove their shoes and belts. Unmanned check-in kiosks can also screen a passenger’s passport or scan a visa.

First-class and business lounges are unusually spacious, have a spa and are luxuriously furnished with chandeliers, wine racks and, in one, even a cinema. There are no fast food restaurants in the new terminal but it does offer a Tiffany’s jeweler and a Prada store.

The main terminal is 99 percent complete; workers in hardhats could still be seen putting on the finishing touches while stores were being stocked with goods.

Terminal 5’s completion shows how hard cities such as London are willing to work to maintain their status as world business and tourist hubs, commissioning showcase structures that act as shopping malls with art galleries, spas and Internet access.

Terminals can be profitable in an era of tightened security, as travelers show up hours before their flights — and then shop or eat while waiting to take off.

Terminal 5 will include a quarter-mile-long main building at the west end of Heathrow for domestic and short-haul flights, and two nearby satellite buildings that will primarily handle long-haul services. The buildings will be connected by an underground shuttle.

The main building, which has a white steel roof 40 yards high, overlooks the green belt of the Colne Valley and the five-story-high wall of windows provides a view of Windsor Castle, a principal official residence of Queen Elizabeth II. Visitors can also see the arc at Wembley Stadium.

The design is sleek and modern with gleaming gray marble floors and a flood of light from windows in the walls and ceiling.

The Guardian newspaper said the terminal is “an architectural and engineering tour de force that raises the standards of British airport design 100 percent.” The Daily Mirror called it “an awe-inspiring temple to the twin gods of air travel and shopping.”

The terminal will have access to subway lines and the Heathrow Express train service into central London.

Plans also are under way to replace Terminal 2, Heathrow’s oldest, with a new one called Heathrow East. Work is due to be completed before the Olympics.

Heathrow Airport, which now has four operating terminals and two main runways, handles more than 480,000 flights a year.

Only last year, London Mayor Ken Livingstone said Heathrow’s dilapidated infrastructure and problems with flight delays and poor baggage handling were shaming the city because they typified “the English short-termism, lack of planning, lack of investment.”

Britain’s government is currently considering granting Heathrow permission to build a third runway.