What's up with the recent weather related travel debacle in Europe? Five inches of snow shuts down the biggest airports in Europe. Should we attribute it to a typical failure of those damn European socialists?
Not exactly. Actually this one is more like a typical failure of greedy and short-sighted capitalists. Clive Irving has the story of Heathrow and other British airports.
It seems that after the Brits noticed that airports could be made into shopping malls, they turned airports over to the British Airport Authority, which, despite the name, was a private company, rather than a government entity.
As a result, the BAA became a prized, highly profitable business, much admired beyond the U.K. It caught the eye of an ambitious Spanish multinational—until then a specialist in building highways—called Ferrovial. In 2006 Ferrovial bought control of the BAA.
Then the problems really began. Passengers complained of poor maintenance, filthy toilets, chaotic security lines, and poor communications. The full realization of what Ferrovial was up to came in March, 2008, with the opening of Terminal 5. This supposed state-of-the art building, long delayed because of planning problems, was the scene of embarrassing systems failures in its first weeks—thousands of bags were lost, flights were delayed or canceled, and it became an infamous public-relations disaster for British Airways...
While Ferrovial was loading up the Heathrow stores with all their Christmas goodies it hadn’t bothered to check whether it had enough plows to deal with two runways if, by chance, it happened to snow. Or enough de-icing fluid to get the airplanes out of the gates. Or anything else fundamental to fitness of mission. The cost of that negligence is almost incalculable.
This result is hardly surprising. The fundamental problem, as is usually the case, was a misalignment of incentives and public purposes. Britain has a huge stake in having a functioning transportation system that the world can trust. Ferrovial mostly had a stake in selling single malt whiskies. The free market fanatics believe as a matter of religious principle that the government shouldn't do anything, but sometimes governments do it better, either by direct ownership of the key assets or by close regulation.