Inside Britain's Airports: Channel 4 Dispatches

27 February 2017

Airports are big business – the UK’s three biggest airport owners had a combined turnover last year of more than £4 billion, and much of it comes from passengers.

In the last 5 years Heathrow has paid £69 million in corporation tax while pay out more than £2 billion in dividends to its owners.

Heathrow handles more than 75 million passengers a year and high-end specialist shops at Heathrow generate £115 million for the airport.

Passenger Ambassadors

Heathrow’s website says Passenger Ambassadors are there to assist with directions; flight information and help with your journey. The airport has a large team of these Purple People as they are know,  to help travellers once they are through security, but Dispatches have discovered that they have sales targets to meet, those working at entry level are expected to pull in about £2,500 per day.

A Dispatches undercover reporter secured an interview with an agency providing staff to Heathrow Airport - including passenger ambassadors.

During the interview some of the sales figures that the Ambassadors contribute to were revealed

The whole team here of 138 people – cost Heathrow about four and a half million pounds…The sales that the team will generate this year… will probably end up £125 million.

This is sales alone?

Sales alone. 

When a job offer arrives a few days later the role is surprisingly different to the description on Heathrow’s public facing website

'The majority of the role will involve interacting with passengers, persuading them to shop if they had not planned to, or encouraging them to spend more…'

Our reporter is sent to Terminal 2 – where shops like Harrods, John Lewis and Burberry  chase the spending power of the terminal’s 16.5 million passengers a year. She’s put straight on the floor learning on the job. Passenger Ambassadors receive bonuses if they achieve their sales targets. So a colleague explains how to make sure sales are logged as theirs.

‘When you escort someone there I always stand here and then look and make the eye contact with the retailer until they realise you work here and are escorting someone.’

They then have to check the total cost so they can record their sales, which contribute to their bonuses. Some Passenger Ambassadors stand by an information desk – which promotes both shopping services and customer care. Our report asks a manager more about the sales part of the job.

 

Undercover:       part of our job is to persuade people that like are not necessarily going to shop to shop?

Manager:            Um hum.

Undercover:       Like how do you do that?

Manager:            Engaging in conversation, building a good rapport I would say – got to be a bit cheeky about things.

She meets an Ambassador who has the title of Senior Seller – he claims to average £10,000 worth of sales a day, with a year’s balance of £1.6million.

Passenger Ambassadors helped Heathrow achieve retail revenue of 612 million pounds last year by driving up sales across the airport.

Heathrow Airport commented, “… we provide fantastic restaurants and stores … in order to offset the cost of running the airport which ultimately keeps the cost of air fares down for passengers. Passenger Ambassadors are an important part of our business and we expect the team to put the needs of our passengers first. …”

World Duty Free

In the first half of 2015 World Duty Free’s UK shops took 528.9 million Euros.

The shops stock Airport Exclusives – a bigger bottle of perfume or a slightly different brand, which means that you can’t compare the price against other outlets. One example, Dairy Milk Caramel bites, 400g for £9, £2.25 per 100g. However, Elsewhere we found dairy milk chocolate caramel products with exactly the same ingredients for £1.38 per 100 grams – so a lot cheaper on the high street.

World Duty Free response, “Our airport exclusives include many unique, limited edition or gift items which are not available on the high street and are very popular with travellers.

World Duty Free offers VAT and Duty free prices, Dispatches have had sight of an industry report the figures from which suggest a square metre of duty free retail generates about three times more revenue than a square metre inside Tesco – the UK’s biggest retailer.

Dispatches found a bottle of Jameson’s Irish whiskey advertised for £18.59, but at the till it was sold to the reporter for £28.49 as he weren’t flying outside the EU. WDF shops have small green squares on their labels which state: “Only for passengers travelling outside the EU.” But during our investigation staff admitted some customers were confused by the labelling system.

£18.59 still seems expensive for a duty and VAT free bottle. Dispatches discovered that World Duty Free’s savings are based on a full price of £35.58, so on that figure it’s a saving of £16.99 in VAT and Duty.

The problem is Dispatches couldn’t find the £35.58 price anywhere in the shop – in fact on the shelf World Duty Free itself says the average high street price is £31.01.

The response in relation to the validity of VAT and duty discounts are as follows: “ Our customers benefit from VAT and duty free savings on thousands of products in our airport stores throughout the year.”

Currency Exchange

Rates at the airport are generally worse than on the high-street.

On the day Dispatches went to Stansted the rate for Euros against the pound was 1.01. On the high-street it was 1.11, this makes Moneycorp around £30 more expensive on a £300 transaction.

Simon Philips, Travel Money Executive said: “The high rents that are being charged at an airport are being passed on to the consumers through rate, to the extent - in some cases upwards of 12% difference between what you will get on the high street at an operator, and the airport”

Moneycorp runs all six of the Bureau de Changes at Stansted airside, but Dispatches discovered if you go to the cash machine, next to the bureau de change, to withdraw under 300 pounds you won’t pay the £5 commission.

 

Teller:   I can’t tell you that you have to ask me – if you ask me is it cheaper I can tell you. Cos if we do that say to every customer who walks past we’d never get anyone to serve because everyone would just go queue up there.

 

Harry:    Oh, I see but you operate that cash machine.

 

Teller:   yes.

 

Harry:    And that’s commission free?

 

Teller:   Yes.

Response from Moneycorp; “The reason for higher margins at our airport bureaux is the significant cost associated with operating there including ground rent, additional security … and staffing our bureaux for extended hours….

… the most cost-effective way to buy travel money is to pre-order online and collect at the airport. Our online reserve and collect rates are very competitive … Our aim is to provide the best possible service to our customers, and we do not ask staff to conceal information about where to find the best rates.”

Drunken Behaviour in airports and on-board:

Last year the aviation industry admitted disruptive passenger behaviour was linked to ‘excessive and uncontrolled alcohol consumption’. Dispatches has obtained new figures from the Civil Aviation Authority on disruptive passenger behavior on UK flights.

• In the last year, there were 421 incidents – compared with just 85 in 2013.
  • Time and again in the accounts we’ve seen the crew claim the disruptive passenger had been drinking prior to boarding the plane

Last year the UK Aviation Industry published a Code of Practice on Disruptive Passengers. Airports who signed up to the voluntary code are supposed to ensure that their retailers tell customers: ‘not to open or consume alcohol before or during their flight.’

But at three of the airports, who signed up to the code, where Dispatches bought duty free alcohol we received no such warning. 

Dispatches has discovered the code of conduct has changed and only on flights considered to be ‘vulnerable’ will passengers be warned when they buy their alcohol.

World Duty Free said: “We fully support the new code on disruptive passengers and, in consultation with our partner organisations, we are continuing to trial a range of ways to give guidance to our customers at multiple airports”.

Signatories to the code of conduct also agree to; practice the responsible and controlled selling or supplying of alcohol and encourage the responsible consumption...

Some airlines have banned the sale of alcohol on their flights, particularly to destinations such as Ibiza - but that doesn’t stop travelers drinking in the airport before boarding.

Dispatches found drinkers in Manchester Airport who knew some airlines had banned the sale of alcohol on their flights drinking from two pint glasses at the bar prior to take off.

In a statement the Manchester Airport Group said: “… MAG takes seriously any instances that breach the … Code of Practice on Disruptive Passengers. All of the outlets…at our airports have committed to operating in compliance with the code… The sale of beer and cider in two pint measures in some bars in Manchester Airport does not represent a breach of the code, and there is no evidence that it has led … to disruptive behaviour … Two pint measures … have been popular with passengers because it saves them time queuing at the bar.”

 INSIDE BRITAIN’S AIRPORTS: CHANNEL 4 DISPATCHES - MONDAY 27th FEBRUARY, CHANNEL 4, 8PM

Reporter: Harry Wallop

Prod/Dir: Simon Barnes

Exec Prods: Peter Lowe, Emma Barker

Prod Co: Screenchannel Television