Airlines vs. Airports: Virgin Atlantic Stiffs Heathrow After Icy Shutdown
The relationship between airlines and airports has always been a complicated one -- they need each other, but when things go wrong, they blame one another almost instantly. That's exactly what's happening in London, where Virgin Atlantic has decided it won't pay Heathrow Airport's owner BAA anything until an inquiry into last month's days-long shutdown is completed. Virgin Atlantic is acting like an impatient child here, and runs the risk of making relations with its most important airport even worse.
When a few inches of snow fell in mid-December, it didn't seem like an extraordinary event, and most figured Heathrow would be back up and running quickly. It wasn't. The snow melted and then refroze into ice, and Heathrow's operator BAA couldn't get the runways cleared for days. The result was total chaos.
Icy runways, skidding profits
People were stranded all over Europe from the cold, snowy weather, but nowhere was it as bad as in London. It got so ugly that people weren't even allowed into the terminal without a ticket for travel that day. Tents set up outside made the airport look like a refugee camp. The result was massive disruption and financial losses on all sides.
Virgin Atlantic is guessing it lost about £10 million while much-larger British Airways expects to lose £50 million due to weather disruptions throughout its system. Meanwhile, BAA is predicting it will have lost £20 to 25 million itself.
So now it's time to play the blame game. British Airways, reserved as always, is hinting that it may seek some level of compensation for the event. But Virgin Atlantic is assuming its typical role as the brash punk by saying that it won't pay a dime to BAA until the inquiry is completed.
High-stakes poker
This may play well publicly, but it's a lousy way to handle business. Virgin Atlantic is withholding payments to BAA as of Jan. 1 under the rationale is that it wants to recoup some of the December losses that it blames on BAA. But without knowing the full extent of what BAA did, it's hard to know how much culpability it should have.
I don't know anyone who thinks BAA should get off scot-free, but there'll be plenty of time to fight for compensation later. If the inquiry shows BAA is at fault but it opts not to compensate the airlines, then they can take BAA to court. There's also nothing stopping them from withholding payments at a later date. (Though something tells me the courts might stop that.)
So why is Virgin Atlantic doing this? Probably for the press, which wouldn't be out of character. This makes Virgin Atlantic look like the good guy and casts BAA as the villain. It helps with public opinion, but it hurts the airline's relationship with the biggest and most important airport in its system.
Airlines need things from airports from time to time, and you can be sure that with this move, Virgin Atlantic will be the lowest priority for the airport. That has the potential to cause problems for the airline down the road.
Related:
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- Virgin Atlantic's Food Complaint Was Excellent PR, Possible Hoax?
