Some 250 chief executives have written to the Chancellor this weekend, accusing the Treasury of ignoring evidence that Air Passenger Duty is harming the economy
9:30PM GMT 30 Nov 2013
The Government has been accused of “turning a blind eye” to the damage caused to inward investment and job creation in the UK by a controversial tax on air travel.
Some 250 chief executives have written to the Chancellor this weekend, accusing the Treasury of ignoring evidence that Air Passenger Duty (APD) is harming the economy.
The UK has one of the highest aviation tax regimes in the world. In a recent study by the World Economic Forum, the UK was ranked 138th out of 139 countries according to the competitiveness of its air ticket taxes and airport charges – ahead only of Chad in Africa.
APD, which applies to all passengers flying from a UK airport, will be raised again in April 2014.
Rates have soared since 1994, when APD was introduced. Then, passengers paid £5 per person for short-haul destinations and £10 to travel further afield, but now as much as £188 can be added to a long-haul ticket.
“Year-on-year APD rises are making the UK economy increasingly uncompetitive,” the chief executives, including British Airways head Keith Williams and Heathrow Airport boss, Colin Matthews, write.
“As UK businesses, we are bitterly disappointed with the Government’s decision to keep increasing a tax which acts as a barrier for business in attracting inward investment and creating new jobs.”
The business chiefs, who range from directors of large companies such as Emirates and Lufthansa, to small firms, point to research published by PwC earlier this year which claimed that scrapping APD would deliver a 0.45pc boost to gross domestic product within 12 months and create 60,000 jobs by 2020.
The study, which used economic modelling used by government departments and organisations such as the International Monetary Fund, estimated the UK would be £16bn better off by 2015 were APD to be abolished.
The research was dismissed by the Treasury but the 250 chief executives, who also include Craig Kreeger, head of Virgin Atlantic, are pressing for the Government to carry out and publish its own study into how APD affects the economy. A similar call was made earlier this year by the Commons Treasury Select Committee.
“In the current economic climate it will be the private sector that drives growth, but taxes like APD are hindering us from competing internationally and slowing us down in the global race,” write the chief executives, who are members of the campaign group A Fair Tax on Flying.
An HM Treasury spokesman said: “The Government has frozen APD in real terms since 2010, and in the last year, APD has not changed at all for the majority of flights. Passenger numbers are going up, and airlines do not have to pass on the cost of APD to passengers.
“However, it is important that the aviation sector plays a part in helping to bring down the deficit.”
Sourced from The Telegraph
Operators were happy with their performance in 2013, although those reliant on Egypt had to source alternative destinations and it had not been easy.
Elman Wall, the travel industry specialist accountants, said they had seen an average improvement of around 10% in their clients’ profitability in 2013.
Forward bookings for 2014 were looking good, with some Aito operators reporting increases of 30% to 40%.
It was also interesting that more emphasis was being put on quality and service by tour operators. These attributes are increasingly in demand from consumers, rather than the lowest price.
Value for money is now seen to be the goal. As the UK pulls out of a long recession clients are feeling more optimistic about the future and are prepared to spend more on their holidays.
The no-frills carriers are no longer no-frills because their clients will no longer accept being treated in such a degrading fashion. Even Ryanair is beginning to soften its stance. These airlines may claim to be ‘low cost’ but in summer 2013 they were definitely charging high prices.
I find it amusing that they pretend they are doing clients a big favour by treating them better.
After all the fuss, after all the years of pretending that they have a unique and very different model, they now look exactly like the scheduled carriers they put out of business.
More often than not, legacy scheduled carriers such as British Airways, TAP and Air Malta are cheaper and present better value.
Outlook for 2014
So, will there be an enormous increase in capacity in 2014 after a good 2013? Will the industry behave as it always does: throw caution to the wind and, after one good year, pour on too much capacity the next?
I doubt that Tui and Thomas Cook will, but British Airways seems to be opening routes and adding rotations to existing schedules. Norwegian is flexing its muscles and its prices are lower than those of the incumbent players. EasyJet will certainly not have its own way on routes like Mykonos and Santorini, where it has had a virtual monopoly – with high prices as a result – over the past couple of years.
Will we start seeing charter flights making a comeback?
Will the mid-sized tour operator return and give more choice than the market leaders, which are concentrating on fewer properties where they have exclusivity?
And will we all bow down before the Russian onslaught into our traditional markets? Next year there could possibly be more Russians in Cyprus and parts of Greece than Brits.
Time will tell. But one thing is for sure: the travel industry is anything but boring.
Sourced from Travel Weekly
The group received the listed company turnaround award at the ceremony on London.
It was presented for what judges described as an outstanding year of progress, which has seen the oldest travel company in the world successfully implementing a wide-ranging business transformation model.
The IFT awards – widely regarded as Europe’s top business transformation awards – recognise companies and organisations that have returned to strength, having faced difficulties over the last few years, thanks to excellent strategy and leadership.
Cook received the award in recognition of its ambitious business plan overseen by Green and chief financial officer Michael Healy.
IFT Award judges recognised the quick action taken by the management team in dealing with the scale of work that was urgently needed in order to take steps to deliver a successful and sustainable transformation.
The independent judging panel includes representatives from The London Business School, the Confederation of British Industry and Global Turnaround Publishing and a number of accredited turnaround professionals.
Green and her management team unveiled the new Thomas Cook strategy to the market in March, which focused on ‘High Tech, High Touch’ growth of multi-channel routes, while continuing to build customer trust and loyalty through the delivery of the right products, supported by excellent customer service.
Last week Thomas Cook recorded its first operating profit in three years, with the company’s share price rising 13% to 173.7p. When Green joined in July 2012, the share price stood at 15p.
Christine Elliott, chief executive of the Institute for Turnaround said: “Thomas Cook is an example of a successful business transformation in progress.
“The management team fully embraced innovation, delivering a complex balance sheet re-financing whilst developing a business strategy suited to the needs of online consumers.
“In the last year Thomas Cook’s management team have also shown huge amounts of commitment and belief in their vision for the future of the company.
“As a result of the transformation plan, Thomas Cook is now in a position to deliver sustainable growth in the future which was underlined by their impressive financial results announced just last week.”
Sourced from Travel Weekly
The aircraft is the second of 23 new A321s ordered by Thomas Cook Group to be delivered by 2016 as it replaces almost a third of its short and medium-haul fleet.
Six will be deployed in the UK by next summer, with the latest aircraft entering service in the next few days operating holiday flights to a range of European destinations.
The new Airbus is the first in the group – and one of a very small number of such aircraft overall – to be fitted with wing-tip Sharklets which help it fly using less fuel. This contributes to an overall fuel efficiency of up to 6% compared to the existing aircraft in the fleet.
The first flights will take place next week after being delivered to the airline’s Manchester base from Airbus in Hamburg – with the aircraft set to be based at Belfast airport.
Christoph Debus, chairman of Thomas Cook Group Airlines and chief executive of Thomas Cook Airlines UK said: “Today marks the beginning of an exciting phase for our UK airline, bringing a new experience for our customers as we welcome this new aircraft to our fleet.
“By next summer, six such aircraft will be taking our holidaymakers to destinations across Europe and North Africa.
“It’s very symbolic that we will see the first of our new Airbus A321 aircraft in the UK take on our new ‘Sunny Heart‘ livery, an icon for the new Thomas Cook and the new Thomas Cook Airlines.”
Sourced from Travel Weekly
The Virgin Australia boss hit out following Qantas’ backing of a plan suggested by Australian treasurer Joe Hockey that foreign ownership rules covering the country’s flag carrier should be relaxed.
Current laws restrict foreign stakes in Qantas to 49%, with overseas airlines allowed to own just 35%.
Qantas claims this puts it at a disadvantage to rivals such as Virgin Australia, which is not subject to the regulations.
But Sir Richard, writing on the Virgin.com website, claims that the Australian market is more than competitive already.
He wrote: “We began competing with Qantas in 2000 with just two planes and one route.
“Over the last 13 years we have grown the airline to more than 140 planes but flying in Australia has sometimes been akin to having a bleeding competition with a blood bank.
“Qantas was the giant in the market with a myriad of foreign alliances and advantages determined to bleed Virgin Blue, now Virgin Australia, dry.
“However thanks to the superior quality of Virgin Australia’s management and its staff, it has not only survived but has now managed to create a much more level playing field which is offering the customer more choice and better value.”
Qantas chief executive Alan Joyce wants “urgent, immediate action” from regulators to ensure his airline grows, despite already sealing a tie-up with Emirates and dominating the Australian market, the Daily Telegraph reported.
But Sir Richard said any such move from the authorities would be “grossly unfair”.
“Today Qantas’s alliances are still larger than Virgin’s, but our improved position is having a big impact on Qantas, who are now complaining about the intensified competition.
“It seems strange to me that a Liberal government would even consider tilting the playing field once again in Qantas’s favour.
“It would be grossly unfair, undermine the great work of Virgin Australia’s management team and staff and bewilder investors in Australia and worldwide.
“If Qantas was better managed and offered the public a decent service it would not be in the financial mess it is currently claiming it is in.
“Government should be there to encourage competition, not to prop up the weak when the going gets tough.”
Sourced from Travel Weekly
Direct weekly flights restart on Monday, Feburary 17, 2014, after nearly five months. Until then, the airline continues to offer flights via Cairo to reach Luxor.
The carrier’s direct flights were suspended on July 5 this year when the Foreign & Commonwealth Office introduced a ban against all but essential travel to parts of Egypt following political unrest in the country.
Discover Egypt is putting the weekly scheduled flights back into its schedule for Nile cruises and holidays departing from February 17.
Its Nile cruise holidays resumed this week with flights offered via Cairo to Luxor after FCO advice was relaxed on November 22.
The operator said the new direct flights would suit those wishing to connect from other regional UK airports, with departures at 2.35pm every Monday, no supplements, baggage allowance of 23kg, and inflight meals included.
Commercial director Philip Breckner said: “I have been lobbying for this for days and been in direct conversations with the minister of tourism each day. This is the only direct service and will make it much easier for holidaymakers.”
Both Thomson Airways and easyJet withdrew direct flights out of Gatwick to Luxor as a result of political unrest.
Breckner is hopeful the news of a direct flight will help renew confidence in the destination. More than 50 holidaymakers joined Discover Egypt’s first Nile cruise this week, making it more than 60% full.
“We had customers booked on this a long time ago but we also had some new business. There is lots of pent-up demand and we are the only ones offering Nile cruises at the moment. The hoteliers are crying out for business,” he added.
Sourced from Travel Weekly
6:33pm Monday 2nd December 2013 in News
AN airport has insisted that taxpayers will not have to foot the bill for a six-year legal battle.
Newcastle International Airport Ltd (NIAL) was left with a legal bill thought to be in the region of hundreds of thousands of pounds after its prolonged negligence claim against law firm Eversheds ended in the Court of Appeal last week.
The court ruled that the law firm had breached its duty of care by not issuing memos properly explaining the impact of an £8.5m bonus deal for two airport executives.
But the airport was awarded just £2 in nominal damages after the court decided the failure would not have caused the airport to incur substantial losses.
Further hearings were due to take place to determine who would pay the legal bill arising from the case.
However the airport tonight issued a statement saying it “notes the decision of the Court of Appeal in respect of costs associated with NIAL’s appeal in its proceedings against Eversheds.
“Whilst disappointed at this outcome, NIAL wishes to highlight that in conjunction with its solicitors it put in place at the onset of this litigation a range of measures, including legal expenses insurance, designed to ensure there will be no call upon company finances, or the public purse, as a result of these proceedings.
The airport is majority owned by seven councils including Durham County Council.
The company said that Newcastle Airport was a critical component of the region’s economy which already supported thousands of jobs and made an economic contribution of £640m, which was set to double by 2030.
The statement added that a new management team at the airport was working with local authority and private shareholders “to deliver new air routes, significant capital investment and an award-winning regional airport for the North-East.”
Sourced from The Northern Echo
3 December 2013
Tui Travel will continue its partnership with Boeing in a bid to make aviation more sustainnable.
The operator is taking part in the Boeing ecoDemonstrator programme which aims to introduce new green technology for aircraft.
Tui is planning to share information with Boeing after a 757 was supplied for the programme which will now be fitted with a number of technologies that will then be tested in 2015.
In the same year the ecoDemonstrator 757 Flight Test airplane will visit a number of cities showcasing the technology, while a recycling programme at the end of the programme will ensure nothing goes to waste.
The news comes following Tui Travel’s announcement last month that it would buy two new Dreamliners while it has also committed to purchasing 60 Boeing 737 MAX aircraft.
Johan Lundgren, deputy Chief Executive of TUI Travel, said: “The ecoDemonstrator programme sets a benchmark in research and development- it has the potential to drive meaningful change in the industry and we look forward to being a part of the programme.
“TUI Travel is committed to sustainability and this initiative gives us the opportunity to demonstrate our leadership in this space.
“It is a fantastic example of innovation which plays a significant role in mapping out the future of air travel, not just for Boeing and TUI Travel, but for the industry as a whole.”
Jeanne Yu, director of environmental performance product development for Boeing Commercial Airplanes, added: “Boeing’s ecoDemonstrator program provides opportunities to accelerate new technologies that have a real environmental benefit to the industry.”
Sourced from TTG Digital
Devolution to Northern Ireland of the level of Air Passenger Duty on short-haul flights out of the province would be considered, a minister has said.
Northern Ireland secretary Theresa Villiers suggested she would look at any request made in a move welcomed by Abta.
The power to set APD levels for all flights of over 1,500 miles was devolved to the Northern Ireland assembly in 2011.
Villiers’ comments come on the back of the recent decision in the Republic of Ireland to abolish its aviation tax from next April.
Villiers made her comments in response to a question in the House of Commons last week in which she was asked what steps she was taking to review APD in order to maintain competition for both investors and visitors to Northern Ireland.
Abta head of public affairs Stephen D’Alfonso said: “We welcome the written statement made by the Secretary of State for Northern Ireland that she would consider any request to devolve the level of Air Passenger Duty charged on short-haul flights out of Northern Ireland to the Northern Ireland assembly.
“Abta has been working hard in Northern Ireland and Westminster putting the case that APD is a regressive tax which does immense damage to the UK economy, with a particularly damaging impact being felt in Northern Ireland.
“The recent decision by the government in the Republic of Ireland to totally abolish their aviation tax will put Northern Ireland at a competitive disadvantage.
“The arguments for lowering or abolishing this tax in Northern Ireland, and the whole of the UK, are stronger than ever.”
Sourced from Travel Weekly
A legal attempt to halt the expansion of Stansted failed yesterday at the High Court.
Stop Stansted Expansion (SSE) argued criteria used to decide options for runway sites was “infected by apparent bias” and called for a delay.
It claimed Geoff Muirhead, former chief executive of Stansted owner Manchester Airports Group, who recently resigned as a member of the government’s Airports Commission, had a conflict of interest.
The judicial review was contested by the Airports Commission and the Department for Transport.
The judge ruled that both Muirhead and the commission might have acted in a way that was not “the most wise” and their conduct could have been regarded by a fair-minded observer as “less than ideal”.
But the apparent bias accusation was not supported by the evidence, Mrs Justice Patterson said.
The court heard that MAG, the owner of Stansted since February, submitted proposals to the commission for a two-runway option at Stansted, and also a four-runway hub airport option which would make Stansted the largest airport in the world.
Muirheard stepped down as one of the five commissioners appointed by the commission after SSE warned transport secretary Patrick McLoughlin they would take legal action if he stayed.
SSE said Muirhead retired as MAG’s chief executive after 22 years with the group but was then immediately reappointed as “a highly paid ambassador to MAG, a role he continued to fulfil even after he was appointed to the Airports Commission”.
Mrs Justice Patterson observed that a “fair minded and informed observer would not have regarded the actions of Mr Muirhead in remaining as a commissioner until September 20, or those of the Commission in retaining him, as the most wise”.
But she ruled a “defensive strategy” was adopted so that, “although the conduct of both parties was less than ideal”, a “fair-minded and informed observer” would not have been satisfied there was “a real possibility of bias,” the BBC reported.
Dismissing the legal challenge, the judge ordered SSE to pay legal costs of up to £10,000.
SSE said in a statement after the ruling that the judge was critical of the commission for not being more transparent about Muirhead’s consultancy arrangements.
“Because there is so much at stake, and because the position is still not entirely satisfactory, SSE needs time to give proper consideration to the judge’s 60-page ruling and to discuss it in detail with its legal advisers before deciding whether there are aspects of the judgment that need to be taken to the Court of Appeal.”
Sourced from Travel Weekly