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Thursday 4 December 2008

Facing the flak at Terminal 5

Judi Bevan meets BAA chairman Sir Nigel Rudd, an Eighties entrepreneur turned City grandee who still relishes tough challenges — and has met several at Heathrow

In 1997, while still at Williams, Rudd took on the chairmanship of Pilkington Glass; he put in the Italian Paolo Scaroni as chief executive and nine years later sold it to the Japanese. Next, he took the chair at Boots, which to many people’s horror he merged with European group Alliance UniChem and then swiftly sold to KKR and Alliance’s boss, Stefano Pessina. ‘I enjoyed that merger most, partly because the financial community hated it,’ he says, with a gust of mischievous laughter. ‘You don’t mention the good price we got: during my chairmanship we created about £6 billion of shareholder value.’

Since he became chairman of BAA last August, his life has taken on the quality of a soap opera. Threatened strikes, public demonstrations and clashes with the airlines over charges are the everyday story of the airport folk that Rudd leads these days. The fates turn fast. In mid-March he was walking a few paces behind the Queen on her lap of honour round Terminal 5 to cascades of praise; two weeks later he and Willie Walsh were hate figures. Rudd knows it will pass, predicting that Terminal 5 will soon be operating smoothly and that he and his newly appointed chief executive, Colin Matthews, will then be able to get to grips with other problems — such as security — and a huge programme of investment. ‘We need to spend £4-5 billion over the next four years because BAA has been underinvested for decades,’ he tells me.

In the past few months he has inhaled airport culture. ‘There has not been a new runway in the south-east of England since 1946 and we’re supposed to be a modern state,’ he says scathingly, when I ask if we really need a third runway. ‘The Chinese, on the other hand, have gone from thinking about a new airport in Beijing four years ago to having one today. I’m not suggesting we become a totalitarian state but we need to make a decision.’ I confess to being mystified as to why Heathrow, surrounded by dense housing, should be expanded rather than Gatwick or Stansted, which sit amid green fields.

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