Welcome

11th August 2008

In this issue:

• Foreign office advice
• Government to access passenger data
• Consumer protection
• Airline schedule cutbacks
• BA's proposed alliances
• Second home owners in Europe have a problem
• General airline news
• Gatwick Express planned service reductions
• Ryanair may buy Stansted
• New Hilton Garden Inn at Luton
• Condor Ferries sold to Australian Bank
• Our next newsletter

The Foreign office has advised against all but essential travel to Georgia in the light of ongoing hostilities with Russia.

The government is setting its sights on accessing all passenger record details of those flying in and out of the UK in order to counter serious crime. Immigration minister Liam Byrne will respond to a House of Lords EU committees by recommending that the passenger details of those using any means of travel, from planes to ferries to Eurostar, to enter or leave Britain should be available for scrutiny by the government. Currently EU law only allows the government to use this information when combating terrorist threats or instances of organised crime.

Scheduled airlines are at increasing risk of failure and should be brought into the consumer-protection system that covers package holidaymakers as a matter of urgency, says a government advisory committee.  The Air Travel Insolvency Protection Advisory Committee warned of "significant concern over the lack of financial protection for air travellers booked direct with a scheduled airline". In its annual report highlights the recent failures of airlines Silverjet, Maxjet and Eos, and points out they "demonstrate the significant financial loss passengers can be exposed to". ATIPAC, the CAA, travel association ABTA, the Federation of Tour Operators and other travel bodies have repeatedly called for scheduled airlines to be included in the ATOL scheme and the £1 per passenger fee added to fares. But ministers have resisted the calls, accepting the argument of major airlines that they are unlikely to go bust.
   
Airlines are set to lose 60 million seats worldwide – seven per cent of the total – in an “unpreceden­ted” move.  Experts said the cuts suggest that the industry faces “a far more severe global downturn than we have experienced before”. The Official Airline Guide – the industry’s authority on flight information – also forecast that 275 airports could lose scheduled services as firms struggle to cut costs by axing unprofitable routes.  Any dramatic cuts in the number of seats, coupled with rising oil prices, is likely to lead to higher fares and bring an end to the era of cheap air travel. World­wide, 24 airlines have gone bankrupt so far this year.
   
British Airways is preparing to surrender its right to hundreds of transatlantic flights in an attempt to win the backing of US authorities for an alliance with American Airlines. The slots are worth tens of millions of pounds, but BA sees it as a price worth paying to secure a three-way tie-up with AA and Spain's Iberia.  The alliance would give the joint venture huge dominance in transatlantic flights. It would have 46 per cent of all the slots and handle 62 per cent of all transatlantic passengers. Virgin Atlantic is poised to launch a £3m advertising and lobbying campaign as it attempts to frustrate the plans. Richard Branson has also written to US presidential candidates Barack Obama and John McCain warning that a link-up between British Airways and American Airlines would be anti-competitive. In the letter, Branson said the proposed alliance would "severely damage competition on major transatlantic routes and leave consumers worse off". "Airlines everywhere are struggling with the current price of oil, but the solution to their problems should not lie in an anti-competitive agreement which will inevitably lead to less competition and higher fares," he said.
   
Second-home owners with rural retreats in mainland Europe are to become the latest victims of the economic slowdown with airlines shutting down many of their budget European routes. The financial crisis facing the airline industry means that thousands of cheap flights to Spain, Italy and the south of France are to be axed by British Airways, easyJet and other operators. An analysis by the Official Airline Guide shows that budget airlines will scrap almost 60 routes this winter. There will be 3,000 fewer flights than in the same period last year. During the cheap flight boom that began in the late 1990s, hundreds of thousands of people bought properties in Europe. An estimated 425,000 Britons now have a second home overseas.

BA have announced capacity reductions to their winter schedule. Services from London Gatwick to Newquay, Poznan, Dresden and Sarajevo will all be suspended from 26 October 2008. New routes originally due to start operation on 26 October 2008  from London Gatwick to Valencia and Porto, will not operate. The new route to Hyderabad will be delayed and will begin on 6 December 2008. 
   
EasyJet will commence thrice-weekly Gatwick-Salzburg service from December 13th.
   
Travellers will soon be able to fly direct from Birmingham to Istanbul as Turkish Airlines is set to commence services from December 15th. The airline will operate five flights per week.
   
Ryanair will launch a new daily route from Birmingham to Düsseldorf on October 27th.
   
Flyglobespan is to launch a route from Aberdeen to Ibiza.  The airline is also in negotiations to add more services out of Aberdeen. The Ibiza route is to begin next summer from the end of June to the middle of August.
   
A new direct flight service from Edinburgh  to Sardinia has been announced by Jet2.com for next summer.

From May 16th  the airline will fly into Olbia on the island's north-east coast, which has one of the most beautiful stretches of beach in the Mediterranean.
   
US Airways has began charging $1 for coffee and tea and $2 for bottled water and soft drinks on the airline's extensive domestic route network.
   
British Airways loses more bags and operates more delayed planes than any other big airline in Europe. On the day that BA launched its first advertising campaign to rescue the reputation of Terminal 5 at Heathrow using the tag line “Terminal 5 is working”, it emerged that BA customers were 80 per cent more likely to lose their luggage than average in the first half of 2008. Britain's third largest airline, bmi, also had one of the worst records for lost luggage this year, beaten only by BA in a table of 29 European airlines. Nine passengers travelling on a typical BA jumbo jet flight between January and June found that their bags were missing when they arrived at their destination. 
   
VLM Airlines, which operates 115 flights per week to and from Manchester Airport, has been named Best Business Airline — Western Europe by Business Destinations magazine in their annual travel awards.  Belgian-based VLM Airlines is owned by the Air France-KLM Group
   
Michael O'Leary, chief executive of Ryanair has said the company is interested in launching a takeover bid for Stansted airport. O'Leary said that he was convinced the UK Competition Commission's investigation into Stansted-owner BAA, which is controlled by Spain's Ferrovial , would recommend breaking up the airports operator, which would open the door for a bid of around 2 billion pounds. O'Leary also said that he would increase passenger numbers from 24 million to 40 million by halving landing fees and building a second runway and terminal. The fraught relationship between BAA and one of its biggest customers has reached a new low after it emerged that the airport owner is suing Ryanair over non-payment of landing fees.
   
A number of peak time Gatwick Express trains will be withdrawn from October 25 to November 3 when work is carried out on the section of line between Redhill and Purley. Some services on the non-stop link between the airport and London Victoria will be axed.
   
The first Hilton Garden Inn near Luton airport has opened.

Channel Islands ferry firm Condor Ferries has been sold to a fund managed by Australian bank Macquarie. Macquarie already owns Wightlink and the Isle of Man Steam Packet.
   
The next issue if our Travel Industry News will be on 26th August.