London airports splash $6 bn on revamp

London’s Heathrow and Gatwick airports, the busiest in Britain, are spending almost $6 billion on makeover projects to stem an exodus of passengers and airlines put off by their crowded lounges and faded concrete.

At Heathrow, the roof will this month be added to a £2.6-billion ($4.3 billion) replacement terminal reckoned by owner BAA Ltd to be Europe’s biggest building site. Gatwick, 43 miles away, has a £1-billion spending plan that includes cladding one of its two ageing terminals in glass and steel.

While the plans won’t immediately add capacity at the runway-restricted airports, BAA and Global Infrastructure Partners, Gatwick’s owner, say the spending is vital if they’re to retain flyers and lure back others lost to award-winning developments at hubs including Madrid, Munich and Paris Charles de Gaulle, which has an area four times that of Heathrow.

“We can’t compete with Europe using 1950s infrastructure, so we’re building for the future,” Steve Morgan, head of BAA’s capital investment program, said in an interview.

The reputations of both Heathrow and Gatwick, owned by BAA until 2009, were tarnished in the past decade as investment in facilities failed to keep pace with growth in traffic.

Even the opening of Heathrow’s fifth terminal, built in 2008 for British Airways, its biggest customer, at a cost of £5.5 billion, attracted negative publicity as tens of thousands of luggage items were misplaced and hundreds of flights canceled after the baggage system broke down on day one.

“We’ve learned a lot from our T5 experience,” Morgan said. “We’ll gradually start it up — we won’t make a big bang.”