Chancellor says nothing on APD or travel in final Budget

18 March 2015 at 14.15 GMT
Chancellor George Osborne made no mention of Air Passenger Duty in today’s Budget, but Treasury Budget documents confirm APD will rise at the rate of the Retail Price Index (RPI) from April next year.

Changes to APD from this spring, already announced, will see the overall tax take from the duty fall by about £250 million in the next financial year.

But the Treasury still expects to extract £3.9 billion in annual duty from the tax by 2018-19, up from £3.2 billion in the current year.

APD will be charged at two rates rather than four from the start of April, with a short-haul economy rate of £13 and £71 for medium and long-haul flights.

Fares for children under 14 will no longer be subject to APD from May.

The Chancellor made few direct references to travel in his final Budget before the general election on May 7.

However, his pledge to “ensure Britain is the global centre for the sharing economy” could have repercussions for sections of the travel industry.

Budget documents state the Government’s intention to “enable government employees to use sharing economy solutions to book accommodation and transport when travelling on official business”.

Osborne promised “new investment in transport infrastructure for London”, “a comprehensive transport strategy for the North” and “over £7 billion of transport investment” for the South West.

A cut in corporation tax to 20% and review of business rates were calculated to please businesses.

The Chancellor appealed to households by announcing a freeze on fuel duty, a reduction in beer duty and a rise in the personal tax allowance.

Osborne announced a so-called Google Tax on companies seeking to avoid taxes by registering overseas would be introduced next week and apply from next month.

Raising APD by the RPI rate is likely to mean an above-inflation rise next year.

RPI has been consistently higher than the official Consumer Price Index (CPI) since 2009 and the former rate is no longer used by the Government as an official measure of inflation.

The annual RPI rate in January of this year was 0.5% against a CPI rate of 0.3%.

Sourced from Travel Weekly


Glasgow airport reports busiest February in eight years

By Phil Davies | 11 March 2015 at 13.07 GMT
Continued demand for eastern European destinations served by Wizz Air and Ryanair helped push passengers using Glasgow airport up by almost 14% last month.

The Scottish airport handled more than 510,000 passengers in February – its 24th consecutive month of growth.

International traffic was up by almost a quarter over February last year while domestic numbers grew by 6.9% with British Airways, Flybe and Loganair all reporting a strong February.

Ryanair’s three daily services to Stansted also continued to perform well, according to the airport.

Aer Lingus launched flights to Donegal last month and Citywing confirmed an increase in services to the Isle of Man to 11 a week during the summer. Flybe launches a new double daily service to Bournemouth on March 29 and flights to Cardiff in June.

Airport managing director, Amanda McMillan, said: “Our success in securing new routes and attracting airlines to Glasgow has translated into sustained passenger growth and we could not have asked for a better start to the year.

“The next three months will see the launch of a further 13 new routes including direct flights to Las Vegas, Munich, Prague and Halifax, Nova Scotia.

“We are continuing to make improvements to the airport in order to accommodate this growth and are making excellent progress with the £3 million extension of our east pier.

“It is an exciting time for Glasgow airport and there is much to look forward to with major events such as the World Gymnastics and IPC Swimming World Championships still to come.”

Sourced from Travel Weekly

Strength of sterling against euro brings down cost of EU business

By Phil Davies | 04 March 2015 at 11.08 GMT
British business travellers going to the EU could save around £66 per trip on the value of their spending money due to the strength of the pound, new research reveals.

Analysis by travel money business Centtrip shows that sterling is now worth about 15% more against the euro than it was this time two years ago.

British businesses made around 4.67 million trips to the EU in 2013, spending a total of £2 billion when there.

If the valuation of sterling against the euro remains the same this year when compared to two years ago, travellers could spend on average £65.99 less and have about the same spending power they did in 2013, according to the research.

It estimates that two years ago businesses spent around £428.78 when in the EU on business. To have the same level of spending money today they only need to spend around £362.79.

Company co-founder and managing director Brian Jamieson said: “As sterling continues to grow against the euro, the power of our spending money whilst on business in the EU increases.

“Sterling has recently hit new seven-year highs versus the euro, and many of our business customers are locking in current attractive rates and buying euros to use today or at a later date.”

Sourced from Travel Weekly

Upturn in summer bookings gathers pace

Upturn in summer bookings gathers paceImage via Shutterstock

Summer 2015 bookings continue to outpace sales a year ago, according to industry analyst GfK.

Year-on-year bookings for the week to February 14 were 7% up, while the previous week they were 3% higher. Summer 2015 sales for the season to date remained 3% up year-on-year to the end of last week.

The upturn began in mid-January following a slow start to 2015. GfK reported a 4% rise in year-on-year bookings in the final week of the month following a 2% increase the preceding week. This compared with year-on-year declines of 4% and 1% in the first two weeks of 2015.

Year-on-year package bookings in the week to February 14 were up 8% and family bookings up 14%. Bookings to eurozone countries also rose 8%, with a £3 increase in the average selling price despite the fall in the euro’s value.

The improvement follows a 4% rise in the number of outbound holidays from Britain last year. Recent Office for National Statistics figures showed holiday departures in 2014 hit 39 million for the first time since 2008.

Travel Designers director Nick Harding revealed he had scaled back marketing on Google and Facebook, saying: “I wondered whether we would cope. We’re cutting back on marketing so we can reduce the number of enquiries. There is only so much we can do.”

Advantage Travel Partnership commercial head John Sullivan said: “The market seems to have gathered momentum.”

Sourced from Travel Weekly

Manchester airport hits 22m annual passengers

Manchester airport hits 22m annual passengersThe annual number of passengers using Manchester airport hit the 22 million mark last week for the first time since 2007.

Passenger numbers using the UK’s third-busiest airport have grown 24% since 2010 and have increased by one million since May 2014.

The total of 22 million passengers using the airport since January last year have flown to 210 international destinations, with the most popular being Dubai, Dublin, Tenerife, Amsterdam and Palma.

Manchester airport

Manchester Airports Group chief commercial officer Ken O’Toole said: “Manchester airport’s significant growth is testament to the critical role it plays in UK aviation, providing the north of England and our extended catchment area with global connectivity through an unrivalled network of short and long haul destinations.

“We have more than 22 million people living within two hours of Manchester airport and our continued addition of new routes and increased frequencies is seeing customers choose Manchester, rather than other airports.

“We continue to grow thanks to the strength of our catchment, the support of our airline partners and the continued hard work and dedication of all MAG colleagues. With more than 65 airlines and over 210 routes from Manchester, there is huge choice for passengers, whether flying on business or pleasure.

“2015 is set to be another busy year for the airport and we look forward to adding even more routes to our offering.”

The 22 millionth passenger was Thomas Cook Airlines passenger Harry O’Connor Harry received a pair of return tickets to Miami from the carrier, plus access to Manchester airport’s Escape Lounge, a £250 duty free voucher and FastTrack passes.

Thomas Cook Airlines starts new Manchester routes to Miami and New York from May.

Christoph Debus, chief airlines & hotels officer for Thomas Cook Group, said: “It’s fantastic for our airline to be a part of the ongoing success of Manchester Aairport, our home and long-haul hub and we are looking forward to more success as we begin even more routes to the USA this year.”

Sourced from Travel Weekly

Northern tourism receives £10 million boost

Northern tourism receives £10 million boostTourism minister Helen Grant (pictured) is meeting senior figures in northern tourism to discuss plans to boost the region’s offer to visitors with a £10 million investment from the Regional Growth Fund.

Today’s meeting, alongside deputy prime minister Nick Clegg, will take place in Sheffield with figures representing local destination management organisations, such as Welcome to Yorkshire, Marketing Manchester and Cumbria Tourism, due to attend.

The funding, announced by Clegg in November, will be invested to strengthen and market the tourism offer in the North through a single, strategic plan.

The number of visits from overseas tourists and the amount they are spending has hit record heights in the last four years and growth is expected to continue in 2015.

VisitBritain is forecasting spend will increase by 4.5% to £22.2 billion this year with the number of visits forecast to grow by 2.5% to 35.1 million.

The government wants to keep up this momentum and encourage visitors to explore the very best of Britain, including enjoying the attractions and scenery in the north of England.

Clegg and Grant will ask northern destination management organisations to work with VisitEngland and submit a single proposal outlining how the funding should be invested for maximum growth returns.

While VisitEngland will hold the funds initially, local partners in the north will lead the way with determining the activities and outputs the money is spent on.

Clegg said: “I’m immensely proud of the stunning countryside, history and culture that the north has to offer, and yet all too often international visitors flock to London rather than our northern beauty spots and cities.

“As part of my Northern Futures initiative, I am working together with people in the north to change this, strengthening the economy and ensuring it’s on the map as a top tourist destination.

“The funding in place is there to create a single vision for boosting tourism right across the north, rather than focusing on individual cities or hotspots.

“Today’s meeting is the first step in bringing together existing work being done to bring visitors to the north; and will see people of the north put a comprehensive tourism offer in place to successfully show off the best of the north.”

Grant said: “Growing up in Carlisle, I have a huge passion for the north of England and I want to do all I can to help the industry deliver long-term economic growth for the region.

“Our tourism strategy has brought visitors to the UK in record numbers, spending record amounts and boosting local jobs and growth across the country.

“This new fund will help encourage them to explore the world-class heritage, landscapes and culture that the north boasts.”

Sourced from Travel Weekly

The big issues: what will shape the UK travel industry in 2015?

From APD to the Rugby World Cup, these are the major developments, products and events to watch over the next 12 months

Caribbean beach scene - APD changes could benefit the region

Air Passenger Duty

The long-running industry campaign against the much-loathed aviation tax has finally started to see some results from its tireless lobbying of government with major changes in the structure of APD coming into place from April 1.

Long-haul destinations, particularly the Caribbean, are benefiting from the abolition of long-haul bands C and D, meaning that all economy passengers travelling more than 2,000 miles will pay the band B rate of £71, instead of the previous charges of £85 (band C) or £97 (band D).

This change will be rapidly followed by the exemption from APD of all under-12s from May 1, which should significantly cut the costs of families flying to long-haul destinations such as Florida.

Airlines and tour operators are refunding passengers who had already booked flights for summer 2015 before the latest APD changes were announced by chancellor George Osborne in December, as well as adjusting their overall pricing for families taking holidays after May 1.

How much impact these changes in APD will have on overall airline ticket prices has yet to be seen. But combined with the dramatic fall in the price of oil in recent months, there should be plenty of downward pressure on UK airfares to all destinations.

The campaign against APD, led by the A Fair Tax on Flying alliance, will continue to lobby for further cuts or the abolition of the tax, which it says remains “a growing barrier to tourism”.

Package Travel Directive

Abta and other industry bodies will be lobbying furiously in Brussels over the next few months as the European Union enters the final stretch of negotiations over a new Package Travel Directive.

There are concerns in the industry that the current proposals for the PTD from the European Council will not “adequately” capture linked online sales.

Abta also fears that the changes will not offer the “transparent consumer protection for holidaymakers, and a fairer regulatory framework for travel businesses” that the directive was originally intended to create across the EU.

The European Council, European Commission and European Parliament will be negotiating over the next few weeks to try to reach a deal on the final content of the directive. They will not be short of advice from the UK travel industry.

Rendering of a three-runway Heathrow - will the major parties take a stance as the general election approaches?

General Election

The date of the next general election – May 7, 2015 – has been locked in place since the coalition government was formed in 2010. But given the state of recent opinion polls, it’s anybody’s guess which party or parties will end up forming the next government.

The biggest impact for the travel industry will be the new government’s view on airport expansion in the south-east.

Sir Howard Davies’ Airports Commission is due to give its final recommendation on whether to expand Heathrow or Gatwick just weeks after the election in June.

Whatever the complexion of the government, this is one game of political football that is likely to last considerably longer than 90 minutes.

For the record, neither the Conservatives nor Labour has committed to implementing the commission’s recommendation. It will be interesting to see what they and the other parties say in their election manifestos about airport expansion or whether they just duck the issue.

In the meantime, the travel industry will have to deal with uncertainty in the market as a number of customers opt to await the results of the election before booking their breaks.

Thomson Dreamliner - long-haul will be a key battleground for the Big Two in 2015

Tour operators

Major UK tour operators Tui, Thomas Cook and Monarch are all beginning significant new chapters in their long histories in 2015.

Tui Travel and Tui AG have finally merged to create what joint chief executive Peter Long calls “the world’s largest integrated leisure tourism business” with the increased ability to secure “a pipeline of more exclusive holidays for our customers”.

Thomas Cook is now under the management of industry veteran Peter Fankhauser following the departure of his predecessor Harriet Green, while Monarch will be finding its feet under the new ownership of investment firm Greybull Capital with a strategy that focuses entirely on scheduled leisure flights.

Both Tui and Cook have talked up their long-haul prospects from the UK which should also benefit from the changes to APD and the fall in the price of oil. Long says that Tui is “now bigger than British Airways and Virgin into Jamaica” thanks to the success of its Boeing 787 Dreamliner aircraft.

Fankhauser has also been keen to stress that he successfully persuaded the company’s previous management to keep Cook’s long-haul operations, and one of his first moves as chief executive has been torelaunch the upmarket Signature brand.

Mergers and acquisitions

Last year saw a frenetic M&A market with many of travel’s big names changing hands or owners selling stakes of their businesses to new investors.

The biggest potential deal of 2015 could be British Airways owner International Airlines Group’s pursuit of Aer Lingus, with an opening bid being made in December.

IAG chief executive Willie Walsh has already been rebuffed in his initial approach for the Irish airline he once used to run. If he comes back with a successful better offer, it will further strengthen BA’s grip on slots at Heathrow, but what would competition authorities both in the UK and Europe think of such a move?

Atol changes

The CAA’s proposal to get rid of the Small Business Atol (SBA) caused plenty of criticism, particularly from smaller independent operators and some agents. Aito chairman Derek Moore condemned the plans as beinga “sledgehammer to crack a nut”.

The overwhelming majority of responses to the CAA’s consultation on the future of Atol were on the subject of SBAs. Richard Jackson, the CAA’s group director for consumer protection, has admitted that the strong response left them “scratching our heads”.

Jackson has talked about offering a “middle ground” solution to the trade including more stringent financial testing to reduce the failure rate of small operators. Exactly what the CAA comes up with as a “compromise” method of replacing SBAs will become clear when it releases the results of the consultation in the next few weeks.

P&O's Britannia - one of the key ship launches coming in 2015

New cruise ships

This year promises to be another landmark one for the UK cruise industry with the launch of the biggest-ever ship built specifically for the British market – P&O’s £500 million Britannia, which will carry up to 3,650 passengers when it launches from Southampton in March.

Passengers seem to be excited about the ship – P&O set a new personal best for first-day sales when Britannia went on sale last year, outperforming the previous opening-day sales mark set by Ventura in 2007.

Arch-rival Royal Caribbean will also be making waves in the UK market when it launches the even bigger Anthem of the Seas from Southampton in April.

The 4,180-passenger ship is a sister to Quantum of the Seas, whichlaunched in New York in November 2014, and will be sailing on a series of Mediterranean itineraries from Southampton for summer 2015.

What impact these new mega-ships have on the ex-UK cruising market should become more apparent during the crucial “wave” New Year sales period.

Lawrence Dallaglio at Twickenham - the Rugby World Cup is one of the year's major sporting events

Sporting events

Following the distractions caused by last year’s football World Cup in Brazil and the London Olympics in 2012, the industry will breathe a sigh of relief at the lack of a major global sporting event during the coming summer.

The biggest tournament of the year in the UK will be the Rugby World Cup in England, but this six-week event is safely tucked away in the shoulder season of September and October.

Other major sporting events include the Ashes cricket series between England and Australia in July and August, while taking centre stage early this year is the Cricket World Cup in Australia and New Zealand in February and March.

Sourced from TTG Digital