Heathrow – black swan or white elephant?

It is a week since a fire at an electricity substation forced the closure of Heathrow airport for 24 hours, much to annoyance of several thousand air passengers. The government has demanded an explanation within six months but the Financial Times managed an initial one within four days - https://on.ft.com/4l1LaXu.

The travelling public expect an airport the size of Heathrow to have sufficient capacity and resilience to allow for outages and disruption, yet it appears that the decision to close was down to the airport management. Heathrow is run as a private company, although taking power from the national grid it apparently doesn’t have the ability to switch source within the network quickly.

The ability to switch power quickly should be a minimum standard for a transport hub of the size of Heathrow, yet it clearly wasn’t. Airport management took 24 hours to get the airport working again, but industry experts and airline travellers feel that the switchover to an alternative supply should have been near instantaneous. Who is right?

It depends whether you consider Heathrow a High Reliability Organisation (HRO) or not. A nearby data centre survived the fire through switching to backup generators in place because an outage would be catastrophic to its business. Heathrow should be an HRO but might not be run as one. Heathrow had back-up generators but not enough to run a site with the power needs of a small city and so could not cope with this level of outage.

The airport has claimed that capacity was available through switching to other access points on the grid but that switching to them was not simple and required time for safety checks. This suggests that the risk assessment only envisaged smaller outages with which the backup generators could cope. It never envisaged an outage of this magnitude, sufficiently rare to be outside a contingency plan. In other words, a Black Swan event.

Black Swans are risk events that are so rare they don’t get considered as part of a contingency plan, they are viewed as highly unlikely or extremely rare and are not allocated time or resource. Heathrow never envisaged a catastrophic loss of power and so never planned for one. This is a failure of risk perception and planning, a lack of imagination. One of the first rules in an HRO is to think the unthinkable, imagine the unimaginable.

Anyone who has drafted a risk register will know that there is always a trade-off between what is necessary and what is affordable. Planning for extremely rare events is often just not cost effective. As the director-general of the Airports Council International Europe said: ‘Ensuring minimum disruptions and keeping operations running is simply not always possible, you have to strike the right balance between risks and costs.’ In short resilience is expensive and contingency spending must be justified by the probability of an event.

The department of transport sanctioned the building of Smart motorways to improve traffic flow at minimal cost through transforming the safety lane into a running lane, it considered the risk to drivers as being acceptable. However, as fatalities mounted the policy was scrapped because the risk became unacceptable.

The department of health conducted a pandemic planning exercise in 2016 that recommended increasing resources to handle a pandemic. The Treasury vetoed the cost so that the country was ill-prepared for the pandemic in 2020. Risk defines itself in real time or as McMillan said after Suez: ‘Events dear boy, events’.

The Heathrow fire shows that the risk of a catastrophic ‘Denial of Service’ event was not incorporated in the contingency plan, at least not in terms of business critical. The Titanic was built with insufficient lifeboats because it was considered unsinkable. Poverty of imagination is what defines poor risk planning. An airport that can’t receive or dispatch planes becomes just a white elephant. Let’s see what the government does with the report.

Written by Garry Honey, SAMI Associate, member of the visiting faculty at Henley business school, and author of ‘Navigating Uncertainty - securing better judgement’.  

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

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