Travel firms’ shares hammered amid Ebola crisis

Travel firms' shares hammered amid Ebola crisisImage via Shutterstock

Travel and tourism shares took a hammering yesterday after a Spanish nurse became the first European to test positive for the Ebola virus.

Airlines, tour operators and hotels were marked sharply lower on the London Stock Exchange in reaction to the news that the deadly virus which has killed 3,400 in west Africa had reached Europe.

British Airways, Iberia and Vueling parent International Airlines Group was hit hardest, with shares plunging by 25¾p to 345½p.

EasyJet lost 78p to £13.89 following a period of improved stock market performance.

Carnival Corporation, the world’s biggest cruise ship operator, fell 167p to £23.28 and InterContinental Hotels slid 85p to £22.44.

Shares in Royal Caribbean and Norwegian also slumped on the New York Stock Exchange.

Thomson and First Choice owner Tui Travel was marked 15¼p lower to 382p and Thomas Cook dropped 6½p to 112½p.

Investors took fright despite reassurance from JP Morgan analysts that Ebola, which is spread through contact with infected body fluids, was not a “material risk” unless it became airborne, theTelegraph reported.

The SARS outbreak in 2003 shook airline shares, but investors should not expect Ebola to have the same impact, according to the broker’s experts.

“Any comparisons with SARS are misplaced, in our view, given that SARS was an airborne illness relatively easy to contract, and balance sheets were considerably weaker at that time from the aftermath of 9/11,” the analysts said.

Sourced from Travel Weekly

Airlines report buoyant trading

Airlines report buoyant tradingImage via Shutterstock

British Airways, Iberia and Vueling parent company International Airlines Group saw a 8.7% jump in premium traffic during the peak summer month of August.

Overall carryings rose by a similar amount over the same month last year as capacity increased by 9.5%.

The buoyant figures follow Ryanair announcing a 400,000 jump in August passenger numbers to 9.4 million.

IAG said Iberia had resumed flights between Madrid and Montevideo as well as Santo Domingo on Monday.

The Spanish airline is offering four weekly services to the Uruguayan capital and five flights per week to the capital of the Dominican Republic.

Iberia operates more than 200 weekly flights between Madrid and 16 destinations in Latin America.

EasyJet followed the upward trend by reporting an 8.4% hike in passengers carried in August to 6.6 million with an improved load factor of 94.2%.

The UK budget carrier’s rolling annual total of passengers reached almost 64.4 million, up 6.4%.

Aer Lingus carryings in August rose by 7% to 1.2 million, with long-haul numbers up by 22% to 148,000, short-haul by 3.3% to 913,000 and regional by 19% to 144,000.

Scandinavian low-cost airline Norwegian’s August carryings were up by 19% to 2.3 million passengers as capacity rose by 37%.

Chief executive Bjørn Kjos said: “The fact that an increasing number of customers outside of Scandinavia choose to fly with Norwegian, proves that our international strategy is working.

“The August figures are also influenced by major holiday traffic outside of Scandinavia, particularly out of the UK, where Norwegian has a considerable operation.”

Sourced from Travel Weekly

British Airways codeshare on Vueling flights from Cardiff Airport

Vueling Airlines at Cardiff Airport. ©2014 Phil Woods

Vueling Airlines at Cardiff Airport.
©2014 Phil Woods

Press Release by British Airways

British Airways customers will have access to new destinations and scores more routes when the airline adds its flight code to more than 170 Vueling services.

This significant move for the two International Airlines Group (IAG) airlines heralds the beginning of a closer relationship with more codeshare routes planned for the future.

British Airways customers will be able to book Vueling flights through all BA sales channels, including, and collect Avios on these bookings.  The codeshare routes are largely centred on Vueling’s operation in Italy with 37 international and 11 domestic routes available from Vueling’s Rome Fiumicino base. These include the destinations, new to BA customers, of Brindisi, Palermo, Lamezia, Valencia, Split and Nantes.  Other new routes on offer through the codeshare include Heathrow to Bilbao and La Coruña, Cardiff to Malaga and Alicante, and Edinburgh to Barcelona.  Tickets for the codeshare routes go on sale from 17 June for travel from 24 June, 2014.

Steve Ronald, British Airways’ head of alliances, said:  “Our customers will have an even greater choice of routes, destinations and fares now that we have joined forces with Vueling.  As we forge ever closer relationships with our fellow IAG airlines, Iberia and Vueling, our customers will be able to access all corners of Europe and beyond, with one simple booking on and the enticement of the collection of reward points for their loyalty.  Vueling shares our commitment to excellent customer service and we are delighted that we can introduce more of our customers to their network.”

Fernando Estrada, Vueling’s director of strategy, alliances and business development, said:  “We are very excited about this agreement with British Airways, which allows us to be more competitive in the market and concretely support the development of the Airport of Rome Fiumicino and tourism in the city of Rome. The agreement, which is part of the significant international expansion undertaken by Vueling, will soon be extended to other routes and markets”

Other routes in the codeshare include:  Paris Orly to Catania (Sicily), Barcelona to Naples, Brussels to Venice and Copenhagen to Florence.

More of Vueling’s network will be accessible to users when further codeshare routes are added in the near future.

Willie Walsh paid £5 million for IAG turnaround

Willie Walsh paid £5 million for IAG turnaroundBy Chloe Berman

International Airlines Group boss Willie Walsh received a £5 million package of salary and bonuses last year after the group returned to profit.The former head of British Airways took a performance-related bonus for 2013, according to the airline’s annual report, having passed one up the previous year as the group formed by the merger of British Airways and Iberia made a loss.

In 2013 Walsh received a £1.3m bonus with long-term share awards worth £2.6m vesting, on top of £825,000 in salary and around £250,000 in pension and benefits.

Keith Williams, the chief executive of British Airways, was paid £3m. Iberia’s boss, Luis Gallego Martín, took a 15% voluntary cut.

Last month IAG struck what it described as  ‘landmark’ deal with the unions which appears to have lifted the threat of strikes by Iberia pilots. The deal allowed Iberia to make the vast structural changes necessary to return the airline to growth.

In the report, Walsh said: “I look back on last year with a sense of real pride and achievement for what people within IAG have done to put the business on a more secure footing.”

He said he was targeting operating profits of €1.8bn by 2015, and claimed: “We continue to prove the critical logic of merging British Airways and Iberia through the cost and revenue synergies we are achieving.”

Last week IAG said it returned to profit after reducing losses at Iberia. IAG competed the takeover of BMI in 2012 and also bought the profitable Spanish budget carrier Vueling, which helped improve IAG’s trading.

Pre-tax profit reported by IAG stood at €227 million excluding ‘exceptional items’, a significant improvement in the €774 million loss the previous year.

Sourced from Travel Weekly

Northern airports will suffer if Scotland votes for independence, says IAG’s Walsh

Northern airports will suffer if Scotland votes for independence, says IAG's WalshBy Phil Davies

Image via ShutterstockEnglish holidaymakers will change their travel plans and travel north of the border to avoid flight taxes if Scotland votes for independence, according to International Airlines Group chief Willie Walsh.

If Scotland breaks away from the union he expects to see passengers favouring flying from airports in a newly independent nation to avoid Air Passenger Duty charged by the Westminster government.

“Absolutely without question it will happen,” IAG chief executive told The Telegraph, dismissing claims that APD represents only a fraction of a flight’s cost.

“It is that much money to avoid that it is a factor. Anyone who thinks otherwise is a fool,” said Walsh.

“An independent Scottish government has made clear they would abolish APD because they see it as damaging to the economy and that is exactly what we will see – a million people drive to Dublin from Northern Ireland every year to avoid APD.”

Walsh believes airports in the north of England such as Newcastle would suffer as passengers head north, should Scotland become independent.

But he said British Airways would be unlikely to shake up its flag-carrying services to capitalise on this.

“We would look at it but [flights from Scotland] are a small part of the business,” he said, though he added that IAG’s recently acquired low-cost carrier Vueling could move in to take advantage.

Sourced from Travel Weekly

British Airways parent returns to profit

British Airways parent returns to profitBy Lee Hayhurst

British Airways owner IAG has reported reduced losses at its Spanish carrier Iberia, helping it return to profit in 2013.The airline’s chief executive Willie Walsh said last year’s figures were also boosted by reducing costs and the addition of BMI’s prized Heathrow landing slots.

IAG competed the takeover of BMI in 2012 and also bought the profitable Spanish budget carrier Vueling, which helped improve IAG’s trading.

Pre-tax profit reported by IAG today stood at €227 million excluding ‘exceptional items’, a significant improvement in the €774 million loss the previous year.

Revenue was up3.1% to €18.6bn, despite a near 12% slump in cargo revenue. Passenger revenue grew €16.2bn – almost 6%.

BA made an operating profit of €762m for the 12 months to December 31.

Iberia remained in the red but reduced its losses to €166m. Vueling made a €168m operating profit since being bought by IAG in April.

Walsh said: “In 2013, we strengthened the group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability.”

Sourced from Travel Weekly

IAG hails ‘landmark’ deal with Iberia pilots union

IAG hails 'landmark' deal with Iberia pilots unionBy Phil Davies
The threat of further Iberia pilot strike action appears to have been lifted through a deal with the SEPLA union.Iberia parent International Airlines Group hailed the agreement as a “landmark” to introduce permanent structural change and improve the airline’s viability.

IAG said it would result in a “new positive” working relationship between Iberia and SEPLA after years of conflict.

“This landmark agreement provides a strong foundation to put Iberia on the path towards sustainable profitable growth,” IAG said. “It will also enable Iberia to become more competitive and reduce its cost base. “

The main impacts of the agreement are:

  • Fundamental productivity improvements within Iberia.
  • Salaries to remain frozen until 2015. After that date, increases will be subject to the airline’s profitability.
  • An agreement providing a 14% salary reduction for pilots and an additional 4% cut linked to the productivity agreement. With these productivity improvements, the 4% will be returned.
  • The faciliation of growth of Iberia and Iberia Express.

The agreement in principle is subject to the approval of SEPLA’s general assembly.

Iberia executive chairman Luis Gallego said: “This groundbreaking deal reduces the cost structure and provides the foundation for the airline to grow profitably.

“A strong and profitable Iberia can protect jobs in the long term and boost tourism, which is a key driver in Barajas’ [Madrid airport] and Spain’s economic recovery.

“Iberia is the natural airline choice for Latin America and this agreement will enable it to be a formidable competitor and build on its new brand, providing customers with great service and an extensive network.

“This agreement also enables the growth of Iberia Express with a competitive cost base and provides promotion opportunities for current Iberia and Iberia Express first officers.

“Iberia Express will help make Iberia profitable and stronger, by providing short-haul feed, and will provide Spanish competition to low-cost carriers.”

IAG chief executive Willie Walsh said: “‘Luis Gallego, his team and SEPLA deserve congratulations for striking a bold deal that will mark the turning point in Iberia’s future.

“Luis has deservedly won the respect of the industry, his colleagues and the trade unions.

“Permanent structural change was the only way to save Iberia from slow decline. This agreement marks the beginning of its future.”

Sourced from Travel News


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