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Turbulent Times at Terminal 5: How Heathrow changed Project Management in the Aviation Industry

Heathrow airport has long been known as one of the world’s busiest and advanced airports, with more than 75 million passengers passing through it every year. It is no surprise, then, that creating an entirely new terminal while operating as a busy airport was going to be one of their most complex projects to date.

The Terminal 5 development was a compelling case study into innovative project management in aviation, and even though there were some notable slip-ups, the overall story of Terminal 5 is a successful one for Heathrow. 

I’m going to take a look at the implementation and project management of the Terminal 5 development at Heathrow, outlining how it affected the way the aviation industry handles complex projects as well as discussing the merits and shortfalls of this innovative construction.

The Plan

The plan for Heathrow’s Terminal 5 began almost two decades ago. British Airports Authority (BAA), responsible for the UK’s airports, intended to implement the fifth terminal to allow for more passengers and to essentially future proof the airport. 

Designed to service 35 million passengers per year and hold 60 aircraft stands, the implementation of such a massive project was a cause for concern. This challenge was only made more difficult as it had to be completed while Europe’s busiest airport was still in operation. 

Handling such a complex project was going to throw up many challenges for BAA, who knew that this project needed to be completed on time and to budget. This is no easy feat, as BAA discovered when researching international projects of similar scope and size. Not one of these previous projects was completed on time or to budget, so BAA decided to do things differently. 

They found that most projects were using a form of public-private partnerships (PPP), so BAA mixed things up and tried a different approach. They felt that PPP contracting was behind the poor performance of similar projects.

The Solution

One of the biggest innovations brought on by BAA for this complex project was the way that contracting and project management was handled. Using a type of relational contracting, BAA paid suppliers using real-term costing and chose to incentivise good performance with a bonus taken from a shared pool. Contractors that underperformed risked losing out on this bonus, which encouraged efficient work throughout.

This type of relational contracting also encouraged collaboration across teams, making for a more flexible and fluid approach to the implementation and design of the project. Moreover, it encouraged innovation in many of the designs which ultimately streamlined the construction.

Another key to the success of Terminal 5 was digital modelling – a project of this scale required an intricate infrastructure that could only be developed using digital models. Designers could make adjustments and tweak as necessary before final construction began. This worked to negate any potential errors when it was time for construction to get underway.

Ultimately, Terminal 5 was completed on time and under budget, which for many seemed like an impossibility given previous projects. The success of this project was, unfortunately, overshadowed by much of the events surrounding the opening day. Still, from a project development perspective, Terminal 5 was a roaring success.

The End Result?

Although the two decades of planning paid off in the end, the unfortunate part of Terminal 5’s story begins on opening day. The opening of Terminal 5 was marred with mishaps, from a lack of car park space to IT issues that left staff clueless, queues that lasted for several hours and 34 flight cancellations.

Even though these teething problems made the headlines, the innovative project management of Terminal 5 made a positive impact and will change how large, complex projects are handled well into the future.

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