The International Air Transport Association (IATA), BAA, HHOpCo (supplier of fuel to Heathrow) and the Airline Operating Committee (AOC) today agreed to an IATA brokered agreement on voluntary fuel allocation at London's Heathrow Airport following 11 December fire at Buncefield Fuel Depot. The IATA-led agreement results from intense negotiations among airlines. It ensures the integrity of Heathrow operations and distributes scarce fuel supplies as equitably as possible. Importantly, it will eliminate the inconvenience to passengers of technical stops on long-haul flights.
"The first priority of all concerned was maintaining operations at Heathrow with 35% less fuel supply. Airline co-operation was critical and we have achieved a great and historical result," said Giovanni Bisignani, IATA's Director General and CEO.
A voluntary fuel-allocation scheme was implemented immediately following the destruction of the Buncefield facility to make up for the 35% reduction in fuel supply. The initial scheme differentiated between base carriers and visiting carriers with base carriers being given higher fuel allocations. Through BAA effort, improvements in supply have since increased the fuel capacity to 78% of the normal 20-21 million litres per day.
Today's agreement will take effect on 20 February 2006 and eliminates differential treatment for ultra-long haul, long haul and medium haul flights. A differential will be maintained for short haul flights. Equity remains the guiding principle and the short haul differential will be progressively eliminated as supply increases.
"BAA is pleased that the airlines have reached an agreement under IATA leadership. With 186,000 passengers using Heathrow everyday this workable solution is beneficial for all. BAA is convinced that this solution is a positive step forward and will continue working on options toward a long term return to a fully robust supply." said Mick Temple, Managing Director, of Heathrow Airport.
A Steering Committee comprised of IATA, BAA, HHOpCo and the AOC will be formalised to agree on remaining issues including the handling of summer peak season demand, conflict resolution and adjustments as supply increases.
"The fuel crisis at Heathrow is unprecedented. Today's agreement is a pragmatic solution to a very difficult, complex and unique situation. IATA will continue to closely monitor the situation. The next hurdle will be accommodating summer schedules that begin on 31 March. Simultaneously IATA will undertake to develop a global standard for handling future supply crises," said Bisignani.
Airlines continue to face enormous costs as a result of Heathrow's supply deficiencies. "Fuel tankering and even limited technical stops place a tremendous financial burden on the airline community. None-the-less, airlines are cooperating to minimise passenger inconvenience and keep Heathrow running efficiently. It is now time for the oil companies and UK government to and move quickly to ensure significant short-term improvement in the fuel supply level. Moreover, going forward, they must work together closely to ensure a much more robust fuel supply for the UK's air transport links," said Bisignani.
