Heathrow boss claims 30 airlines are waiting to open routes

Heathrow boss claims 30 airlines are waiting to open routesAs many as 30 airlines are queuing up to start new routes or increase frequency on existing services from Heathrow but the capacity-squeezed airport claims it is being forced to turn away their business.

The airport’s chief executive, John Holland-Kaye, said the waiting list includes airlines from North America, South America and Asia.

He pointed out that a quarter of British exports are flown abroad via Heathrow as he pressed the case for building a third runway at the airport.

Holland-Kaye claimed rival Gatwick’s second runway proposals are “primarily about low-cost flights to Europe”, while expanding Heathrow is important for the future of the British economy.

“There is massive demand for flights into Heathrow,” he told The Telegraph.

“There are Chinese carriers that are queuing up to get here. Air China told me they could have four flights a day coming into Heathrow if there was only more capacity.”

Holland-Kaye claimed airlines are instead launching routes from rival hub airports in France and Germany, rather than going to Gatwick.

His comments came on the back of financial results for the nine months to September and as the Airports Commission prepares to launch a national consultation on aviation capacity early next month.

Sourced from Travel Weekly

Special Report: Monarch flies into a new era

Special Report: Monarch flies into a new eraThe day after securing the Greybull rescue deal, chief executive Andrew Swaffield spoke to Lee Hayhurst about what went wrong and his vision for a more profitable future

Monarch Airlines boss Andrew Swaffield blamed a focus on growth rather than profit for the financial troubles that preceded its sale to Greybull Capital.

Speaking to Travel Weekly the day after he tied up the rescue deal, Swaffield said Monarch, along with some competitors, had taken a “yield holiday” in 2012 and 2013.

He said this benevolent period for the sector ended in the second half of 2013 when supply started to outstrip demand, but Monarch had growth planned that it wasn’t prepared to rein in.

The addition of three aircraft this year – Monarch’s fleet grew from 31 to 42 in three years – was “the final blow”, said Swaffield, and prompted the Mantegazza family to seek a buyer.

“If you run an airline, the key focus needs to be return on the assets, and you need to align that with growth,” he said.

“Monarch focused too much on growth. Return on capital had in effect been suspended.

“Monarch, and actually the industry, had a yield holiday for 18 months. Growth without a competitive cost base means 
you are fully leveraged and you need everything to go absolutely to plan, which in 2012 and 2013 up to August it did.”

Swaffield stressed he was not pointing a finger at Monarch’s previous regime but is determined not to repeat that strategy.

“I’m not critical of anyone because it’s not the first airline this has happened to and it won’t be the last. That’s why aviation is such a rollercoaster for investors.

“The key message is you mustn’t grow too fast. I will never allow us to get carried away. That doesn’t mean we won’t grow.

“There are very few assets in business that are more expensive than aircraft and you can’t have more than you can get a return on.”

Monarch had to agree to swingeing cost cuts, including the shedding of 700 roles, to secure the Greybull deal.

Business plan

But Swaffield said: “Now the really hard work starts to make the business plan happen.

“I don’t want there to be a lull now where we say it’s all done.

“We had to build a business plan for Greybull to invest in.

“But you have to persuade customers to book with you, and compete and deliver the revenue that you said.”A key plank of Monarch’s plans for a debt-free future is a new fleet of Boeing Neo fuel-efficient aircraft, which Swaffield estimated will boost profits by £100 million a year by 2020.

“My goal is to get the business in a really strong shape financially to make sure it’s never again in the position it’s found itself this year,” he said. “That’s going to happen not by taking money from the shareholders but by generating money ourselves.”

Greybull funds

A £125 million capital facility available through the Greybull deal will be dipped into to get Monarch through this winter and again the following winter.

But Swaffield said that after that: “My plan is to get the business debt-free within two or three years and then build the balance sheet to a state of much more creditworthiness.”

This new position of financial strength will, Swaffield added, put Monarch in prime position to take advantage of what he sees as an outbound sector ripe for change.

“I’m really keen to make sure that a completely restructured Monarch, with a great cost base and supportive owner, is a key player leading that change,” he said. “If you’re in a position of strength, you are open for business, and that creates opportunities.

“To do that you’ve got to start with a good business and a strong balance sheet and not be fighting internal battles. I feel we have achieved that.”

Mantegazzas’ legacy

Swaffield admitted that had Monarch reacted to a softening market and cut growth it would have “limped through” this year.

But while the sale and restructuring has been tough and prompted the end of the Mantegazzas’ ownership, it was the medicine Monarch needed.

“The company was asking the Mantegazzas for a lot of money and they just said enough’s enough,” he added.

“They’ve been patient; they’ve helped us sell the business and supported it generously to get that done. It’s been terribly important to me that in doing what we did we don’t kill the patient by damaging the culture.”

Sourced from Travel Weekly

Put ‘grotesque’ APD out of its misery, demands Walsh

Put 'grotesque' APD out of its misery, demands WalshInternational Airlines Group chief executive Willie Walsh today described Air Passenger Duty as “grotesque monster” which has spiralled out of control.

Writing in The Times today on the eve of the 20th anniversary of the introduction of the air tax on Saturday, the boss of British Airways parent company said the debate over extra taxation powers for Scotland is creating an opportunity “to remove this beast which has held back job creation and economic growth across the UK”.

“It is no wonder that the Scottish National Party wants to cut APD on flights from Scotland by 50% as soon as possible as a preliminary to scrapping it completely,” Walsh said.

“The tax is said to cost Scotland £200 million a year in lost tourism alone. And if you allowed that potential economic activity to happen, your increased take from VAT and other taxes would go a long way to covering the loss of APD revenue. In fact, research by PwC suggests that the Treasury would end up net beneficiaries.

“So, what if Scotland goes it alone on APD? Well, the first thing that would happen is that Scottish airports would take traffic from northern England, as passengers scooted across the border to escape the punitive rates they would encounter at Newcastle, Manchester or any other English airport.

“With a family of four now facing an APD bill of £276 for an economy flight to the United States, the incentive would be clear enough.”

Walsh’s latest argument against APD came just hours after he reiterated calls for its abolition. He outlined the impact the tax in having on visitor numbers from Asia to the UK.

The APD that tourists must pay on their homeward journey is a huge incentive for them to visit other European countries instead.

“Our paucity of Chinese visitors is well known. Less so is the fact that visitor numbers from Japan have fallen 22% in the past 10 years when APD has risen from £20 to £81 for Japanese visitors to fly home. Meanwhile visitor levels to other European countries have remained stable over the same period,” Walsh said.

“The UK ranks seventh among European countries for Japanese visitors behind smaller countries such as Austria and Switzerland despite having the largest expat community in Europe.

“According to VisitBritain, each Japanese visitor spends about £950 on a visit to the UK meaning that the drop in Japanese visitors over the last few years costs our economy £300 million every year.

“That is the impact from one country. Multiply that across the world and you can see that the UK is missing out on billions of pounds of tourism spend.”

He added: “The aviation industry has been asking the treasury to undertake an independent assessment of the economic impact of APD for many years, surprisingly this request has fallen on deaf ears. What is George Osborne afraid of?

“The majority of European countries either levy no flight tax or have seen the sense in abolishing it. Only four others retain a similar tax but at nothing like APD’s stratospheric levels.

“After 20 years, this tax has lost any shred of economic justification. Ask yourself this question: if the governments of Northern Ireland, Scotland and Wales want to reduce APD significantly or scrap it because it is harming their economies, why does the Conservative-led government want to retain this damaging tax in England?

“There is only one sensible, reasonable option — to axe this tax across the UK and far from reducing the government’s spending power, all indications are that it will in fact increase it.

“APD should be consigned to the annals of history along with other 1990s relics. It must be put out of its misery.”

Sourced from Travel Weekly

Scotland’s largest airports made a joint submission yesterday (28th October 2014) to the Smith Commission calling for Air Passenger Duty (APD) to be devolved to the Scottish Parliament.


Scotland’s Airports call for Devolution of Air Passenger Duty

Glasgow Airport, Aberdeen International Airport, and Edinburgh Airport put together a case for the Scottish Government to take control of Scotland’s APD for the reduction and eventual abolishment of the passenger tax.

APD is the highest passenger tax in the world, and raised £2.9 billion for the UK treasury for the period 2013-14.

However, according to the report released by the airports, APD costs Scotland two million passengers per annum and £200 million pounds. A 2012 report commissioned by the airports warned that by 2016, APD would cost Scotland up to £210 million in lost tourism spend per year.

The airport group argues that the abolishment of APD in Scotland would pay for itself- with the increase in tourism, and tourism spend creating the funding lost from the abolishment of the APD tax.

The UK is just one of five countries in Europe to levy a passenger departure tax, and it is reportedly damaging areas of the economy. For example, the Republic of Ireland’s equivalent of APD was a mere €3 per passenger in 2012. The APD in the UK in 2012 was anywhere between £13-£92, dependant on the length of flight, and this contributed to passengers travelling from Northern Ireland to Dublin Airport to travel.

More than half a million residents in Northern Ireland used Dublin Airport in 2012, and this figure is growing now that the tax in the Republic of Ireland has been entirely abolished. Although Dublin Airport boasts more routes, the APD in Britain has also risen, costing passengers up to £194 for long-haul flights.

Amanda McMillan, managing director of Glasgow Airport said: If Scotland is to attract and sustain the routes that will enable it to compete effectively in the global marketplace, then it is imperative that the issue of APD is addressed.”

If APD is abolished in Scotland, it could however have an effect on English Airports such as Newcastle Airport which is just over an hour away from the Scottish border. The Emirates Dubai – Newcastle route alone raised a total of £8.5 million for APD in 2012, and the devolution of APD in Scotland could attract routes away from English and Welsh airports to Scottish airports as a cheaper alternative.

Gordon Dewar, Chief Executive of Edinburgh Airport said that Scotland’s airports unanimously agree that air passenger duty is damaging to their industry.

“Ryanair has already committed to delivering over one million new passengers in the event of APD being abolished so it’s obvious that airlines support our argument. They’re already indicating the size of the prize that’s just beyond our grasp,” he said.

Aberdeen Managing Director, Carol Benzie said there is already a near-political agreement across a number of parties, as well as support from the public and from businesses.

“The calls to completely reform this tax regime have been growing steadily louder over the years and are now almost unanimous north of the border,” she said.

Scheduled Annual Departure Capacity fromScheduled Annual Departure Capacity fromScotland’s Three Largest AirportsScotland’s Three Largest AirportsAberdeen(ABZ)Edinburgh(EDI)Glasgow(GLA)2004200420052005200620062007200720082008200920092010201020112011201220122013201320142014002,000,0002,000,0004,000,0004,000,0006,000,0006,000,0008,000,0008,000,000YearYearAnnual Departure SeatsAnnual Departure Seats

Year Aberdeen (ABZ) Edinburgh (EDI) Glasgow (GLA)
2004 1693014 5037060 4352578
2005 1789060 5611416 4919759
2006 1972869 5775174 5028697
2007 2161811 6022013 5326433
2008 2034233 6192306 4802982
2009 1838978 6015478 4187624
2010 1753398 5965171 4131967
2011 1866051 6074698 4137606
2012 2002951 5911857 4347870
2013 2078140 6296963 4545936
2014 2256736 6234489 4513872

Data provided by OAG

Our data above demonstrates the scheduled annual departure capacity from Scotland’s three largest airports between 2004-2014. It indicates that all three airports faced a slight decline between 2008-2010, although all have sufficiently welcomed more passengers since 2004.

A press release issued by British Airways revealed that the APD tax is 20 years old this week, and is the fastest growing tax in the UK.

The annual revenue from APD is nearly ten times as much as in the tax’s first full year, and in total, air passengers in the UK have paid more than £26 billion in APD since 1994.

According to City analysts PwC, abolition of APD would boost Britain’s economic growth by 0.5 per cent within a year and lead to the creation of 60,000 new jobs without reducing the Treasury’s net revenues.

Willie Walsh, chief executive of British Airways’ parent company IAG, said: “Twenty years on, APD has snowballed out of control and become a tax that works against people wanting to visit relatives and friends, go on holiday or grow their business to create jobs. 

Sourced from Routes Online

Newcastle airport to gain first transatlantic service

Newcastle airport to gain first transatlantic serviceNewcastle airport is to gain its first scheduled non-stop transatlantic service next year.

United Airlines is to serve its hub at Newark with a summer-only service operating five days a week.

The flights will run between May 23 and September 7, subject to government approval.

The carrier is to deploy a 169-seat Boeing 757 on the route.  Flight times will be 7 hours 50 minutes westbound and 7 hours 10 minutes eastbound.

United’s UK and Ireland sales managing director, Bob Schumacher, said: “We’re very excited about introducing non-stop flights to New York from Newcastle next summer.

“We’ll be offering the people of northeast England easy, convenient travel options not only to New York City but also to destinations throughout the Americas.

“United already offers a transatlantic service from more cities in the UK than any other airline and we’ve every reason to be confident that this new service will be a success.”

Newcastle airport chief executive, David, Laws said: “For many years, and everywhere I go, people have been stopping me and asking, when is the northeast going to get a New York service?

“I have been clear throughout that this is a route that we have been determined to deliver for the region. We have been carefully and quietly working behind the scenes, with our shareholders, to secure what will be another game-changing new route.

“United Airlines is the best airline to operate this service. They have an exceptional track record of linking UK regions to their New York/Newark hub, where customers can then connect to over 100 onward destinations.”

Sourced from Travel Weekly

Demand to reduce APD to improve domestic connectivity

Demand to reduce APD to improve domestic connectivityImage via Shutterstock

The government is being urged to reduce Air Passenger Duty to boost domestic air connectivity.

The call came from the British Air Transport Association as it emerged that Flybe’s Newquay to Gatwick route is to get £2.5 million of government funding to keep it running over four years.

The Department of Transport said it was now a “public service obligation”. About 100,000 passengers per year are expected to use the flights.

The route had been under threat last year when easyJet, which was expected to take over the Newquay-Gatwick slots from Flybe, said it was not planning to operate the route, blaming lack of demand, but Flybe continued the service.

Flybe has been working alongside Newquay airport, Cornwall Council and the local MPs to gain public service obligation funding for the route, which will operate up to three times a day.

BATA chief executive, Nathan Stower, said: “A few domestic routes are not sustainable without public support and I am pleased that the government recognises the importance of regional air connectivity.

“The government could support other domestic services by simply reducing Air Passenger Duty – the world’s highest tax on flying.

“At £26 for a return ticket on domestic flights, APD hits people flying within the UK for business and leisure particularly hard.

“It’s crazy that the Newquay-Gatwick service could raise up to £2.6 million in Air Passenger Duty in its first year alone – £100,000 more than the £2.5 million central government support provided over four years for this public service obligation route.”

Flybe chief executive, Saad Hammad, said: “The people of Cornwall need efficient and affordable air access to the capital, which is faster than road and rail.

“It is an important step in improving regional connectivity in the UK, which contributes significantly to economic development.

“Flybe’s strategic vision is to give regional customers around the country more convenient access to the wider world. We look forward to continuing to serve our passengers flying to and from Newquay.”

St Austell & Newquay MP, Stephen Gilbert, told the BBC: “This is the culmination of months of hard work to make the case that Cornwall does need a route into London.

“It is worth about £30 million a year to the Cornish economy with about 3,000 jobs directly dependent on that route.”

A Gatwick spokesman said: “We welcome news that this crucial route has been secured and look forward to supporting Flybe’s operation.

“Britain’s economy is driven by the four corners of the UK so we are delighted to offer the south-west a vital connection to London and other key international destinations.”

Sourced from Travel Weekly

Thomson Airways faces Christmas strike disruption

Thomson Airways faces Christmas strike disruptionThomson Airways faces a strike threat in the run-up to Christmas in a dispute over below-inflation pay rises involving cabin crew and pilot roster crew controllers.

The warning of passenger disruption from Unite, the UK’s largest union, came on the eve of today’s extraordinary annual general meeting of the airline’s parent company Tui Travel and its German sister company Tui AG to vote on merger plans.

About 30 crew controllers and their assistants, who arrange cabin crew and pilot rosters to Civil Aviation Authority regulations to cover for sick colleagues and any unforeseen circumstances, will be balloted from November 19 for strike action in a dispute over pay. The ballot closes on December 10.

Unite argues that the company rewards other sections of the airline’s 2,500 strong workforce well, but crew controllers have not benefited and their pay has been “severely eroded” in relation to the retail price index (RPI) rate of inflation since 2010.

The ballot follows a breakdown in negotiations held under the auspices of conciliation service Acas.

Unite regional officer, Kevin Hall, said: “This is an extremely profitable company that rewards other sections of its workforce very generously and our members in the crewing department see this day in, day out.

“We do not believe it is unreasonable to start to bring our members pay back in line with inflation and the early indications we have had from our members is that this ballot will be well supported.

“Our members earn relatively modest salaries ranging between £21,000 and £29,000-a-year for the skills and dedication they bring to their jobs which ensure the smooth running of the airline and getting passengers away on time for their well-deserved breaks.

“Passengers could face the real threat of disruption in the run to the Christmas holidays, if the crew controllers and their assistants walk out.

“We call on the management to get around the table and negotiate a fair and equable deal that will avert strike action over Christmas and the New Year.”

Sourced from Travel Weekly


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