Ryanair ‘should be forced to sell Aer Lingus stake’

By Phil Davies | 24 March 2015 at 07.44 GMT

The Irish government is reported to have urged the UK Competition and Markets Authority to force Ryanair to sell most of its stake in Aer Lingus.

It is the latest chapter in an ongoing attempt by British Airways owner International Airlines Group to persuade the Dublin government that it should sell its 25.1% shareholding in Aer Lingus and approve the takeover of the airline.

The UK competition watchdog should not be swayed from its previously stated position that Ryanair must be forced to cut its stake in Aer Lingus from nearly 30% to no more than 5%, according to a letter from a senior Irish transport department official to the CMA.

The CMA’s predecessor, the Competition Commission, ordered Ryanair to reduce its Aer Lingus holding two years ago, citing competition concerns. The watchdog also claimed that because Ryanair was such a big shareholder in Aer Lingus, it was likely to deter other airlines from making a bid to buy Aer Lingus.

Ryanair has claimed the fact that International Airlines Group has since made an approach to buy Aer Lingus negates a fundamental plank of the CMA decision to make it cut its stake in its smaller rival.

But the Irish Department of Transport said it agrees with the original finding and that it should still stand, the Irish Independent reported.

“The department considers that the IAG proposal confirms that merger and acquisition opportunities exist for Aer Lingus but that it also confirms that interest in acquiring Aer Lingus is contingent on Ryanair exiting Aer Lingus’ share register,” the letter to the CMA is reported to state.

“I can confirm that it remains the position of the government that it is unlikely to sell its shareholding in Aer Lingus while Ryanair continues to be a significant minority shareholder.

“The department considers that the CMA should…proceed with the remedial action.”

The CMA is proposing that a trustee be appointed to oversee the sale of the bulk of Ryanair’s holding in Aer Lingus.

However, IAG has asked the CMA that it instead give Ryanair permission to sell the entire Aer Lingus holding to IAG.

Ryanair has insisted it has strong grounds for not being forced to reduce its Aer Lingus stake.

Sourced from Travel Weekly

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UK policy failures put travel growth at risk

By Ian Taylor | 24 March 2015 at 08.30 GMT
The World Travel and Tourism Council (WTTC) urged the UK government “not to lose focus” on travel and tourism after forecasting the sector would grow by 4% this year in Britain, outpacing growth in the economy as a whole.

The WTTC published its annual economic impact assessment today, predicting UK travel and tourism would raise its contribution to GDP by 4% this year against forecast economic growth of 2.9%.

The Council put UK jobs growth in travel and tourism at 2%.

The WTTC estimates the industry contributed almost £188 billion to UK GDP in 2014 and accounted for 4.2 million jobs when “indirect and induced impacts” are included alongside the direct impact on the economy.

But the GDP contribution could increase to £195 billion by the end of 2015 or “almost 11% of UK GDP and 13% of total employment”.

However, WTTC president and chief executive David Scowsill warned Britain could lose its position as the world’s fifth-largest travel and tourism economy without government action.

He urged the next government “to take three major steps” to ensure the sector continues to grow.

Scowsill said: “First, there is a need to make visa applications easier, particularly for high-spending Chinese travellers.

“Second, the Air Passenger Duty (APD) tax, which remains among the highest in the world, must be reformed.

“Third, a decision must be taken quickly on addressing the chronic under-supply of airport capacity in the South East.”

The WTTC further warned the UK sector could employ 352,000 fewer people and contribute £17 billion less in GDP over the next 10 years if the government and industry fail to implement policies to recruit and manage talent.

WTTC research suggests the UK’s travel and tourism sector faces a major human-resource challenge and severe skills shortage by 2024.

Scowsill said: “Travel and tourism has the potential to contribute five million jobs to the British economy by 2025.

“However, this growth will not happen by itself. It needs progressive and coordinated government policies across the sector.”

The WTTC report Global Talent Trends and Issues for the Travel and Tourism Sector can be found here: http://www.wttc.org/research/policy-research/human-capital/global-talent-trends/

Sourced from Travel Weekly


Airlines face court threat over customer services

 
Three airlines are facing legal action over complaints about how they handle passengers hit by flight disruptions.

The Civil Aviation Authority said Ireland’s Aer Lingus, Britain’s Jet2 and Hungary’s Wizz Air have failed to change their consumer policies in line with its requests.

Andrew Haines, chief executive of the CAA, said passengers have “every right to be disappointed” by the trio.

The move follows a six-month review of passenger disruption policies.

It examined how airlines handle compensation for flight delays and offer information to passengers about their customer rights.

The CAA said it has launched enforcement action against the three airlines and will seek a court order unless they comply.

The allegations against the airlines are:

Aer Lingus and Jet2 have failed to give satisfactory evidence that they proactively provide passengers with information about their rights in line with the requirements set out in European regulation.
Jet2 and Wizz Air have failed to satisfy the regulator that they are consistently paying compensation for disruption caused by technical faults, despite a Court of Appeal ruling clarifying that airlines must do so.
Jet2 and Wizz Air are imposing two-year time limits for passengers to take compensation claims to the court, despite a Court of Appeal ruling that passengers should have up to six years to take a claim to court.
Mr Haines said: “Airlines are well aware of the support they must provide when there is disruption and passengers have every right to be disappointed that a small number of airlines are not complying with the Court of Appeal rulings and continue to let people down in this way.

“Since the law was clarified last year, we have been active to ensure airlines are applying consumer law appropriately and I warmly welcome the response of those airlines that have changed their policies as a result of this work.”

A Jet2 spokeswoman told the BBC that the CAA’s announcement was “materially inaccurate” regarding the airline’s duties to compensate passengers for disruption.
The CAA has been reviewing how airlines compensate disrupted passengers
She said Jet2 was paying compensation for disruption in line with previous court rulings and that airlines “are entitled” to limit to two years the period in which claims are made.

She added: “No enforcement action has been taken. Given the misapprehensions of the CAA, Jet2.com expects that following the mandatory consultation process the CAA will not wish to take the matter any further.”

Aer Lingus spokesman Declan Kearney said the Irish airline was engaging with the CAA to address its concerns.

He added: “Aer Lingus’ procedures, relating to the provision of information to customers affected by operational disruption, are fully compliant with all the relevant regulations. We have provided a number of documents to the CAA in recent months to substantiate this point and we continue to engage with the CAA to address their concerns.”

Wizz Air spokesman Daniel de Carvalho said it is currently reassessing compensation cases.

He told the BBC: “The UK CAA is well aware that Wizz Air is re-assessing these cases and has confirmed to the UK CAA itself, some time ago, that it will apply the UK CAA’s own list of extraordinary circumstances in the relevant cases.”

He said that limiting the time within which claims can be raised to two years has been “upheld by the English courts”.

Sourced from BBC News


WRU chief executive Roger Lewis expected to be confirmed as the new chairman of Cardiff Airport

16:40, 20 March 2015 By Sion Barry
WRU boss Roger Lewis expected to be named as the new chairman of Cardiff Airport taking over from Lord Rowe-Beddoe

Chief executive of the Welsh Rugby Union Roger Lewis is expected to take up a new role as chairman of Cardiff Airport in November, WalesOnline understands.

In what will be a ministerial appointment he will chair the holding company that operates the airport at arms length from the Welsh Government. An announcement is expected next week.

Mr Lewis will succeed Lord Rowe-Beddoe, who is expected to stand down after a two year term as chair. He was appointed following the Welsh Government’s £52m acquisition of the Rhoose-based airport from Spanish company Abertis in the spring of 2013.

Mr Lewis, 60, will stand down as chief executive of the WRU following the Rugby World Cup this autumn. He took up the role in 2006.

One of his first actions could be to help shape the look of the next non-executive board. As with Lord Rowe-Beddoe their two year terms will expire this year.

While some could remain, it will provide an opportunity to bring in new blood around the boardroom table and potentially more executive experience in the airport and airline sectors.
Lord Rowe-Beddoe will leave with the airport having recently been boosted after negotiating a major expansion of routes with airline Flybe, which is expected to add 400,000 passengers to the airport’s current annual number of just over one million over the next few years.

While having no previous aviation sector executive experience Mr Lewis has held a series of high profile roles, which as well as his current role with the WRU, include being a former managing director at EMI Records and president globally for the Decca Record Company.

He is also chairman of the Cardiff Capital Region advisory board.

The current non-executive board members of Cardiff Airport are Philip Ashman, Margaret Llewellyn, David Goldstone, Geraint Davies and Andrew Sargent.

Following the departure of chief executive Jon Horne last year, the airport is currently in the process of seeking to appoint a new chief executive.

The most senior executive currently at the airport is its interim managing director Debra Barber.

Speaking from Rome, ahead of Wales’s game tomorrow, Mr Lewis declined to comment.

The airport is continuing to hold talks with a number of airlines. High on its list of targets is securing a route into a hub airport in the Middle East, providing for connecting flights into the Far East and Australasia.

Possible candidates include Emirates. However, Cardiff is facing competition from its nearest rival Bristol Airport to land a new route into the Middle East.

The Welsh Government declined to comment when asked about Mr Lewis and chairmanship of the airport.

Sourced from walesonline


Flybe’s new route investment at Cardiff Airport is a good deal for now, but what about the future?

10:34, 19 March 2015
OPINION BY MARTINEVANS
Aviation expert Martin Evans explores Flybe’s investment in new routes at Cardiff Airport but asks what will happen over the long-term

In the airport business it helps to have a short memory.

There are a limited number of airlines to do deals with so if one airline stabs you in the back, the next morning you offer to sharpen the blades for them.

So it was no great surprise when Flybe announced a triumphant expansion at Cardiff Airport thirteen months after abandoning some of the airport’s most important routes at very short notice.

The routes
This was a deal that both parties really needed but of the ‘eleven’ new routes, how much is really new?

Well, two routes, Belfast and Jersey were already being flown by flybe.

Dusseldorf had already been announced as a replacement for Germanwings.

Edinburgh, Glasgow and Paris Charles de Gaulle abandoned by Flybe a year ago, with Edinburgh and Paris Orly already served by City Jet leaving Cork, Dublin, Milan, Faro and Munich as the new routes but of these Dublin is already served by Aer Lingus.
The deal
Route network isn’t the only positive from this deal. Flybe has signed a ten year agreement with Cardiff Airport to base two aircraft at Cardiff.

Having based aircraft is very important, it brings jobs, it brings more convenient arrival and departure times and it helps the marketing of routes. It shows a commitment to the airport and more aircraft can be added later for future growth.

This was a deal that had to be done by Cardiff Airport.

Challenges
The opportunity to become a base for a low cost airline now seems to have vanished.

The weakness at Cardiff is not only having a very strong summer market but a very weak Winter market but also competition from Bristol Airport where the UK’s two biggest low cost airlines have bases.

This is unfortunate because the smmer market at Cardiff is better suited to a low cost airline.

However, the traditional Spanish market is well served by low cost airline Vuelling who, by not having aircraft based at Cardiff, can offer more seats in summer than in winter.

The lack of a based low cost airline makes Cardiff an ideal base for Flybe. They don’t want to compete directly with the low cost airlines who use larger aircraft and have lower costs of operation.

Their business model is to use smaller aircraft offering high frequency services between major cities or routes that are too small for the low cost airlines.

An airport that doesn’t have a based low cost airline needs connections to major UK and European cities and as Europe’s largest regional airline, flybe is the best option available.

Related story: Chief executive of Flybe on the Cardiff investment.

Financial rationale
Flybe also had reasons to need this deal. Flybe has been undergoing a restructuring to take costs out of the business. As part of the restructuring they have grounded a complete fleet of 14 aircraft, the Embraer E195.

These aircraft are too large for high frequency services in the UK market but too small to compete with low cost airlines on leisure routes.

It is unusual strategy for an airline to ground a fleet if there isn’t a definite disposal plan, if the aircraft can cover their operating costs any contribution towards the lease costs would be better than nothing.

Even though the aircraft are grounded, the lease costs still have to be paid.

It was sensible of Flybe to grab the opportunity of earning some revenue with them at Cardiff.

However, we will have an airline at Cardiff operating two aircraft that it doesn’t want to operate any more because it is the wrong aircraft for the UK market.

The problem then becomes one of how is the airline going to grow the business at Cardiff over the ten years of the agreement?

Five of the E195 fleet have already been disposed of and if flybe see an opportunity to dispose of the rest of the fleet will they still retain two of the aircraft for Cardiff or take the more sensible option of disposing of all of them?

Will they extend the lease on these aircraft in 5 years time or will they be returned? What if there can be further expansion of the Cardiff base, will another aircraft type be operated?

Future options
What is probable is that in the second half of this agreement we will see smaller aircraft being operated, probably turboprops.

Clearly the deal works for both parties in the short term, Cardiff gets more routes and passengers, flybe earns revenue from two unwanted aircraft.

However, we should expect the route network to evolve over the next ten years to one that uses smaller aircraft flying more frequently.

That would be not be a bad outcome for the business traveller but it would be one that doesn’t serve the leisure market that Cardiff is currently so dependent on.

If Flybe doesn’t develop a profitable business at Cardiff Airport over the first few years of this agreement with a strategy that fits in with the rest of the UK business then we can expect the knives will be kept polished for future use.

Sourced from walesonline


Former CityJet boss appointed by American Express Global Business Travel

By Phil Davies | 18 March 2015 at 17.44 GMT
Former CityJet chief executive Christine Ourmieres-Widener has been named in the newly-created role of chief global sales officer for American Express Global Business Travel (GBT).

She will be responsible for the organisation’s global sales organisation and global client group as well as its global business consulting division.

Ourmieres-Widener, who starts in the London-based position in June, will report to chief commercial and technology officer Philippe Chérèque.

Chérèque said: “Companies with complex global operations and corporate travel needs look to GBT to go beyond best-in-class booking and servicing to integrate policy development, traveler engagement, compliance and business intelligence into end-to-end travel solutions.

“Combined with investments in information, technology and products, this newly-created role will capitalise on the synergies within our global sales, client management and consulting teams to advance our customer relationships.”

He added: “With her proven track record of delivering growth in line with a strategic vision, combined with her experience leading travel companies across Europe and the US, Christine is the ideal executive for this role.

“She is widely recognised as a progressive leader and an industry luminary, and I am delighted to have her join our team at this time of great change and growth.”

Source   Travel Weekly


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