Thomas Cook plays down airline sell-off talk

Thomas Cook plays down airline sell-off talkThomas Cook Group has played down speculation that it is seeking to sell its airline business as part of a cost-saving plan.

However, Europe’s second largest travel group may consider joint ventures to improve the performance of its aircraft fleet.

The company was responding to a Sunday Times report which claimed that Cook had sounded out a number of potential buyers over the last few months including rival carriers and private equity investors.

No deal has yet been reached and no talks are currently under way, the newspaper said.

The company was quoted as saying it was pleased with the development of its airline operations.

“We see it as an important part of our business and a support of our profitable growth strategy. Of course, we are always open for opportunities,” it said.

Cook said it would consider linking up with other airlines, according to the report.

One possibility is a tie-up with its rival Monarch, which was rescued last autumn by investment firm Greybull Capital the newspaper suggested. Monarch’s previous management is understood to have studied plans to combine the two but the idea was shelved.

Other private equity players were reportedly exploring how to consolidate tour operators’ air fleets to make savings in the face of competition from low-cost online ventures and budget airlines.

Cook said earlier this month that it remained on course to grow this year despite tough trading conditions in Europe.

A Cook spokesman told the Times: “We are very pleased with the development of our airlines and the integration our four airlines have achieved so far. We have also invested in the refurbishment of the cabins of our long-haul fleet and we have added long-haul aircraft to our Condor fleet in Germany and the UK.”

While emphasising the airline’s importance to the group, it said: “Of course we are always open for opportunities which might include partnering with other partners or airlines.”

Sourced from Travel Weekly


Record number of airline passengers in 2014

getAsset.aspxBy Phil Davies,

Global airline passenger demand rose 5.9% last year with record carryings of 3.3 billion compared to 2013, latest Iata figures show.

The performance was above the 10-year average growth rate of 5.6% and the 5.2% growth seen in 2013.

Capacity rose 5.6% last year, with the result that load factor climbed 0.2 percentage points to 79.7%.

More than half of the growth in passenger travel occurred on airlines in emerging markets including Asia-Pacific and the Middle East.

A pick-up in Chinese domestic travel, which expanded by about 11% in 2014, helped drive the growth in recent months.

Iata director general and chief executive Tony Tyler said: “With a 5.9% expansion of demand, the industry out-performed the 10-year average growth rate.

“Carriers in the Middle East posted double-digit growth while results in Africa were barely above previous-year levels.

“Overall, a record 3.3 billion passengers boarded aircraft last year – some 170 million more than in 2013.”

But he added: “While it is clear that people will continue to travel in growing numbers, there have been signs in recent months that softening business confidence is translating into a levelling off of international travel demand.

“In the aftermath of the Greek elections and the intensifying debate on how to deliver a dynamic economic program for Europe, we must not forget the power of air connectivity to create growth.

“Governments can kick-start economic development by reducing the passenger taxes that depress demand for air transport, costing jobs and prosperity.

“There are some positive signs. The Scottish government is promising to cut its air passenger duty by 50%. And Austria’s air transport levy is being evaluated as part of comprehensive tax reforms. Scrapping the Austrian levy alone could create some 3,300 jobs.

“That should help convince politicians in these countries to move from considering reductions to delivering results.

High taxes, onerous regulation and infrastructure limitations make Europe a tough place to run an airline.

“A continent-wide commitment to address these issues so that aviation can play its critical role as an economic catalyst would be a powerful signal that Europe’s politicians really do mean business,” said Tyler.

Sourced by Travel Weekly


Airline orders at ‘unprecedented levels’

Airline orders are at ‘unprecedented levels’ with low cost carriers expanding their fleet more than others.

In Europe, EasyJet, Ryanair and Norwegian Air Shuttle have placed orders in the past two years totalling hundreds of aircraft, extending to 2021 for fulfilment, reports the Financial Times.

Airlines have managed their seat capacity carefully to counter any downward pressure on ticket prices, KPMG said in a report, but the number of new aircraft due to come into service means there will be greater competition between airlines.

“Airlines around the globe are replacing their fleet at unprecedented levels,” said James Stamp, global head of aviation at KPMG.

“Much of the order activity by legacy airlines is driven by the desire to cut operating costs. With fuel costs continuing to be at record levels and a new aircraft generation on the market which is up to 20 per cent more fuel efficient, this trend should not come as a surprise.”

Airbus and Boeing have record levels of aircraft on order – at the end of last year Airbus had unfulfilled orders for 5,559 aircraft and Boeing had 5,080.

Low-cost carriers have continued to outperform other airlines in terms of share price, the research also found.

Sourced by Travelmole


Airline profit expectations remain strong

Airline profit expectations remain strongBy Phil Davies

Airline profit expectations remain strong and in line with levels seen since April 2013, a poll of carrier financial chiefs shows.The quarterly Iata survey indicates confidence that air transport volumes will continue to grow over the next 12 months.

The results of the January survey show that a majority of respondents expect to see improvements in profitability.

“The positive outlook has been broadly stable since the April 2013 survey, and in January 2014 over 70% of respondents were expecting profits to improve over the coming 12 months,” Iata said.

A majority (72%) of respondents expect passenger travel to expand over the year ahead, but at a slightly slower pace than the last survey in October (83%).

Airlines took on more staff in the last quarter of 2013, consistent with an improvement in financial performance. This trend is expected to continue in the year ahead.

Sourced from Travel Weekly


Middle East aviation growth will continue to set the pace

Middle East aviation growth will continue to set the paceBy Phil Davies
International airline traffic growth in the Middle East will continue to outpace the rest of the world, according to the latest forecast from Boeing.The region will need 2,610 new aircraft worth $550 billion over the next 20 years.

A third of that demand – 900 aircraft – will be replacements but 66% is expected to be driven by rapid fleet expansion in the region, the manufacturer says.

Long-range, twin-aisle aircraft, such as the 777 and 787 Dreamliner, will continue to dominate order books in the Gulf region, reflecting the global network priorities and emerging alliances and partnerships of the region’s carriers.

Boeing Commercial Airplanes marketing vice president Randy Tinseth said: “The Gulf region benefits from a unique geographic position that enables one-stop connectivity between Europe, Africa, Asia and Australasia.

“Additionally, over the last decade, we’ve seen a rise in low-cost carriers that have benefitted from a large youthful population, large migrant workforce and trends toward market liberalisation.”

Twin-aisle aircraft will account for more than half of the region’s new deliveries over the next two decades against 24% globally.

Single-aisle aircraft will make up 47% of regional deliveries through to 2032, while large aircraft will account for 10% of forecast demand.

Globally, Boeing has forecast a long-term demand for 35,280 new aircraft, valued at $4.8 trillion. These new aircraft will replace older, less efficient types.

Sourced from Travel Weekly


Aeroflot to establish low-cost airline

Aeroflot to establish low-cost airlineBy Phil Davies

Aeroflot is taking serious steps to launch the country’s first sustainable budget carrier.The airline, which still controls 40% of the Russian aviation market, is hoping from 2014 to launch its first budget routes from Moscow to Saint Petersburg and to cities in the south of Russia from next year.

The new Aeroflot subsidiary, whose name has yet to be unveiled, plans to eventually serve international destinations including Kiev, Yerevan, Istanbul and Barcelona with a fleet that will comprise 40 aircraft starting with Boeing 737s, according to the daily newspaper Vedomosti.

The budget Aeroflot would likely be based at Domodedovo in the south of Moscow as opposed the airline’s main hub at Sheremetyevo airport, the AFP news agency reported.

Russia’s third biggest airline, UTair, is also planning to set up its own low-cost carrier, pointing to a clear market demand.

“People consider more and more that their time is precious and they are going to want less and less to spend two or three days to get anywhere,” chief executive Andrei Martirossov toldVedomosti.

But setting up a budget airline is still dependent on changes to Russia’s aviation regulations which are stricter than in Europe.

Russian law also forbids the hiring of foreign pilots, a major problem in a country whose aviation boom had led to a pilot shortage and consequent high salaries.

Aeroflot chief executive Vitaly Saveliev called it a “paradox” that Russian authorities have allowed Wizz Air and easyJet to fly into the country but has not levelled the regulatory playing field so Russian companies can use the same business model.

“As long as the law does not change, absolutely nothing is going to fly. We are not going to take the risk,” he said. “Aeroflot is not going to invest $100 million in a project which is not going to make us money.”

The Russian authorities appear to have understood the necessity of acting after president Vladimir Putin gave his agreement in principle to the creation of a low-cost airline last October. But changes have been slow to come, according to the AFP report.

Sourced from Travel Weekly


The complete guide to airline charges

We compare charges for items including checked luggage, sporting equipment, credit card use, and seat reservations, at 12 major airlines.

The complete guide to airline charges

Airlines continue to increase their baggage charges and booking fees

By Oliver Smith

The Telegraph

In their efforts to keep headline fares down, airlines continue to increase their baggage charges and booking fees.

Last month Ryanair’s designated “peak period” began, meaning the cost to check in a 20kg suitcase rose from £25 to £35. Since last year Thomson’s checked baggage fee has increased from £15 to £22, and easyJet’s from £14.50 to £18.

Charges for carrying an item of overweight hand baggage have soared too, from £30 to £50 on Monarch, and from £30 to £40 on Flybe, while booking fees rose for those travelling with Ryanair, Aer Lingus and easyJet.

Ahead of the summer holidays, to help passengers compare charges for “extras” such as these, Telegraph Travel – with help from the Civil Aviation Authority – has produced the following tables, detailing fees at 12 major airlines operating short-haul flights from Britain.

Ryanair has outdone its rivals in the a number of categories, with the highest charges for checked luggage (up to £45 on selected routes) and excess baggage (£20 per kilo, although BA’s one-off fee of £40 could be costlier if you’re just a pound or two over). Its £17 per person admin fee to claim back government tax on a cancelled flight is also worth mentioning. Considering it only flies short-haul, the tax paid will never amount to more than £17.

Other notable charges include Thomson’s and Flybe’s hefty excess baggage charges (£13-18 and £15 per kilo, respectively), Thomas Cook’s industry leading charge for sports equipment (up to £70 for some items), and its charge of up to £70 for overweight hand luggage. Aer Lingus’s £8 security surcharge on flights to the US is novel, as is Norwegian’s staggering £160 name change fee on long-haul services (even more than Ryanair’s exorbitant £110 charge).

If you believe any of these charges are wrong or out-of-date, please email travelviews@telegraph.co.uk, and we will update the table.

Luggage

Hold luggage (per flight) Excess Sports/musical equipment Hand luggage Excess hand luggage Other
Aer Lingus £12-20 for 20kg £6 per kg £25 free, 55x40x24, 10kg Hold luggage fee applies Hand luggage allowance less on regional flights
Bmi Regional Included, upto 20kg in economy £10 per kg As part of baggage allowance, or £30 free, 55x40x23 Hold luggage fee applies
British Airways Included, upto 23kg in economy £40 one-off charge (max 32kg) As part of baggage allowance, or £20 free, 56x45x25 Hold luggage fee applies Second item 45x36x20 may be carried on board
easyJet £8-£18 for 20kg £7-£11 £35 per flight free, 56x45x25 £25-£40 Hand luggage larger than 50x40x20 may be put in the hold, at no extra charge
Flybe £13.99-£14.99 (max 20kg) £15 per kg £30 free, 55x40x23, 10kg £40 Checked baggage included on premium fares
Jet2.com From £8 for 22kg £12 per kg £25 free, 56x45x25, 10kg Hold luggage fee applies
Monarch £9.99-£21.99 for 20kg £10 up to 3kg; £10 per kg after £25 free, 56x40x25, 10kg £50
Norwegian £15-42 for 20kg £7 per kg £20-40 free, 55x40x23, 10kg Hold luggage fee applies Checked baggage included on premium fares
Ryanair £15-45 for 15-20kg £20 per kg £50 free, 55x40x20, 10kg £60
Thomas Cook £17-26 for 20kg £8 per kg £25-70 free, 55x40x20, 5kg £50-70 Checked baggage included on package holidays
Thomson £15-25 for 20kg £13-18 per kg Charged as excess baggage free, 55x40x20, 5kg Hold luggage fee applies Checked baggage included on package holidays
Wizz Air £13-30 £9 per kg £34 free up to 42x32x25, 10kg, £8-17 up to 56x45x25, 10kg Hold luggage fee applies

Other charges

Admin fee Credit card fee Reserved seating (per flight) Name change fee (per person, per flight) Infant fee Cancellation fee (per person, per flight) Other
Aer Lingus £7 per person per flight n/a £5-14 £80 £19 £13.50 Security surcharge of £8 on flights to US
Bmi regional n/a £4.50 per passenger n/a n/a 10% of adult fare £25 Admin fee of £8 for telephone bookings
British Airways n/a £4.50 per passenger £10-£25 free online 10% of adult fare £15
easyJet £10 per booking 2.5% of transaction £3-£12 £40 £20 £30
Flybe n/a 3% (minimum £5) £6.50-£15 £40 12% of adult fare £25
Jet2.com £6 per person per flight (online); or £10 at airport 2.5% £7 £35 £20 All flights non-refundable
Monarch n/a 2% (minimum £5) £3.99-£7.99 £100 name change; £35 flight change £20 £35
Norwegian n/a £4 £5-25 £25 (£160 on long-haul flights) 10% of adult fare, plus taxes £160 £11 per person per flight charge for telephone bookings
Ryanair £7 admin + £7 check-in (both per person per flight) 2% £10 £110 name change; £30-60 flight change £30 All flights non-refundable, £17 per person admin fee to claim back tax £70 per person boarding card re-issue fee
Thomson n/a 2.5% (minimum £4.95) £12 (£7 for children) % of original fare, plus £50 for name change; £30 flight change 10% of adult fare All flights non-refundable
Thomas Cook n/a 2% £5 (£3 for children) £20, except for spelling errors spotting with 48 hours of booking 10% of adult fare All flights non-refundable £10 priority check-in
Wizz Air £6 per person per flight n/a £3-14 £38 name change; £26 flight change £21 £51 £9 airport check-in fee

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