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Strikes could cause long queues at airports

Wednesday, November 30th, 2011

As some 2 million public sector workers include themselves in a nationwide strike today, significant disruption is expected across most sectors. A number of airlines have already cancelled services into Heathrow as UK Border Agency staff are expected to join the industrial action. Heathrow operator BAA said it would be doing its best to implement contingency plans, but also advised passengers to expect some delays.

As many as 90 per cent of schools across the UK could be forced to close their doors today. Michael Gove, the education secretary, said it was unrealistic and unfair for the unions to expect the British tax payer to continue to pay the growing pensions bill for the public sector.

Russell Hobby, National Association of Head Teachers’ general secretary, responded to the comment by saying that any blame for union militancy should be placed on a government unwilling to engage in any real negotiations until the very last minute.

Downing Street has said it would be willing to sit down at the negotiating table again, and asked the unions to call off the action. The government said that a strike would not achieve anything.

Although Labour has condemned the walkouts, Treasury shadow chief secretary, Rachel Reeves, said more needed to be done by the government for public sector workers on a low wage who had just been told by that Chancellor that their pay over the coming two years was effectively frozen. George Osborne has just announced that it will be capped at 1 per cent.

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Thomas Cook seeks further £100 million loan

Wednesday, November 23rd, 2011

Thomas Cook has said that it will not be releasing details of its full year’s trading until the latest discussions with the banks over further loans have been concluded. The announcement that it would be returning to the banks for further monies saw shares tumble 75 per cent.

The tour operator said last month that it had managed to secure funds totalling £100 million. It is now asking for a further £100 million. The company already owes around £900 million, and if the latest request from the banks is approved, its debts will tip over the £1 billion mark.

Deteriorating trading has been blamed on the troubles in the Middle East and North Africa, as well as the recent floods in Thailand. The South East Asian country is a popular winter destination with the Russians, but Sam Weihagen, Thomas Cook’s chief, said holiday bookings were down by around 20 per cent.

He added that there was a similar situation in Belgium and France. The French favour Tunisia for their winter holidays and the Arab Spring has put many off from travelling this year. Mr Weihagen went on to say that trading continued to be sluggish in the UK, but was not as bad as in some other European countries.

On Tuesday, share prices hit 10p. In January the price was around 200p per share. Mr Weihagen said that the situation was disappointing, but that the firm would begin to work on the shares after it had secured the new loans. Rival travel firm TUI has also seen the value of its shares fall by nearly 70 per cent this year.

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FCO relaxes visitor warnings for Thailand

Wednesday, November 16th, 2011

As Thailand emerges from some of the worst flooding in living memory, the UK Foreign Office is relaxing its warning on travel to the country. On its website, it is no longer advising that travellers avoid parts of the nation unless their visit is strictly necessary. However, it is still warning visitors to Bangkok to be aware that there is the slim possibility that flood waters to the north, west and east, which are draining into the Gulf of Thailand, could affect the centre.

The FCO is also asking those who intend to visit the 22 provinces which are still experiencing the affects of flooding to display caution. There is still a great deal of disruption to rail and road transport, and Don Muang airport, which flies domestic services, is still closed.

In some parts of the country, transport problems have resulted in shortages of supplies including bottled water, tinned foods, and beer. The Tourism Authority of Thailand has been keen to tell those intending to visit the country that most remains fully open for business.

As the floods hit, foreign visitors began cancelling trips in their droves. For a country where much of the population is dependent on tourist cash, this was not good news. Chiang Mai, a visitor favourite in the north of the country, has been free of flood water for weeks, and the same is true for most other northern and eastern provinces, as well as the islands in the south.

Most of central Bangkok’s attractions are also welcoming visitors.

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Air Passenger Duty rise could hit those already with tickets

Wednesday, November 9th, 2011

On 29 November, the Chancellor will deliver his Autumn Statement. In it he is expected to confirm that Air Passenger Duty will once again be increased. If there is the predicted rise, then it will affect all those who have tickets for flights on, or after, 1 April 2011. However, travel firms and airlines are worried about the amount of money this will add to the price of seats purchased before the date for flights after 1 April.

Around 6.5 million passengers have already booked tickets for after April next year, and they could soon be forced to pay a significant extra amount. Virgin Atlantic said that it had already taken hundreds of thousands of advance bookings, and is asking the government to give a twelve month lead-up so that those who have booked their tickets early will not be unfairly punished for doing so.

Julia Southern, the airline’s chief commercial officer, said that she was worried that when increasing APD, the Chancellor will fail to realise that retrospective airline ticket purchases need to be taken into consideration.

She added that when other airlines were included in the equation, the Treasury stood to make tens of millions as millions of people are told they will have to pay extra. Southern went on to point out that airline taxes in the UK were already among the highest on the planet.

It is expected that the Chancellor’s statement will see APD rise by an average of around 10 per cent. Some ticket prices will increase by around a third.

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IAG and Virgin Atlantic talk to Lufthansa about BMI purchase

Monday, November 7th, 2011

Virgin Atlantic has said that if British Airways owner IAG were to succeed in purchasing BMI from Lufthansa, it would de a disaster for competition and consumer choice. Virgin is concerned that if IAG were to take over BMI it would increase its hold over landing a take off slots at the UK’s busiest airport, Heathrow. IAG currently owns 45 per cent of the slots, and a takeover would increase this to 54 per cent.
According to Deutsche Bank analyst Geoff van Klaveren the move is strategically crucial for IAG. The government has said that there will not be a new runway built at Heathrow, which means the slots are extremely valuable.
Lufthansa has been looking at ways of disposing of BMI as the carrier continues to make a loss. For the fist nine months of the financial year, BMI reported losses of 154 million euros. Political and social unrest in the Middle East and North Africa has hit profits, as has the rising price of oil.
Lufthansa acquired the airline when Sir Michael Bishop, BMI’s chairman, sold his stake. The airline also has a low-cost arm, BMIBaby. In October, the carrier said that it was in talks with an investor group based in the UK about the sale of BMI Regional.
According to Steve Ridgeway, chief executive of Virgin Atlantic, a deal had not been finalised between Lufthansa and IAG, and confirmed that Virgin had put its bid on the table. Any deal will require the approval of the competition regulators.

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Passenger plane makes emergency landing in Warsaw

Wednesday, November 2nd, 2011

A passenger jet travelling from the US to Poland has managed to land in Warsaw safely, even though it did so without any wheels. The LOT Airlines Boeing 767 was flying in from New Jersey with 230 people on board when the pilot realised there was something wrong with the landing gear. He circled the airport for around an hour trying to fix the problem. However, and electrical fire on board the aircraft had reportedly caused damage to the systems.

The pilot, who has been named as Tadeusz Wrona, then made the decision to start dumping jet fuel and warned passengers that they should prepare themselves for a crash landing. A pair of F16 fighters, from the Polish Air force, accompanied the plane in line with standard protocol in such situations.

Warsaw airport prepared for the landing by diverting all flights and closing off various roads near the facility. Emergency vehicles were also put on alert. According to witnesses, the landing was extremely smooth and very few sparks were given off despite the plane sliding down the runway on its belly.

According to Leszek Chorzewski, a LOT Airlines spokesman, the plane made a smooth landing and was sprayed with flame retardant foam as soon as it came to a standstill on the runway. He confirmed that all of the passengers had managed to disembark safely and that there were no injuries to report.

Warsaw airport said that it would not be opening again until Wednesday as a direct result of the incident.

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US to fight EU airline carbon emission charge

Wednesday, October 26th, 2011

US lawmakers have objected strongly to European legislation that will make American airlines subject to a new carbon emissions charge.  Under the European Union’s emissions trading scheme, all airlines flying in and out of Europe will have to pay for permits. The money raised by this will be used to offset the greenhouse gasses being produced by the carriers.

However, John Mica, chairman of the House Transportation Committee, said imposing the rules on US cargo and passenger carriers did not conform to trade treaties already in place or international law. He added that he had met with officials from the EU to explain that he considered the charge an unfair tax, and that the US would continue to pursue the issue.

Henry Waxman, of the House Energy and Commerce Committee, did not agree. He lauded the EU’s initiative to do something to combat global warming and said America should respect the laws of Europe.

The Obama administration has said that it does not think the EU has looked carefully at the legal aspect of the new rules, and the State Department has objected to US carriers being subject to the legislation. The EU has made it clear that any carriers not in compliance will be fined.

One US carrier not keen to be subject to European legislation on the matter is American Airlines because of the presence it has at Heathrow. Other countries have already made objections, including China. Beijing said that orders for aircraft manufactured by Europe’s Airbus could be put on hold if the rules extended beyond European based airlines.

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Premier Inn announces rise in profits

Wednesday, October 19th, 2011

Whitbread’s budget hotel chain, Premier Inn, is continuing to perform well, especially in London. The leisure group has managed to declare a jump of 15 per cent in half-year profits. However, Whitbread’s finance director Chris Rogers warned that the consumer spending environment in the UK was extremely volatile. He added that it was almost impossible to figure out a trend because there were huge variations each week and each month.

Revenue per available room was up by 11.4 per cent in the capital for the six months compared to a year earlier. However, ‘revpar’ for the regions had increased by just three per cent on the same period last year.

The company said that increased numbers of domestic visitors and tourists to London had helped overall revpar increase by 4.4 per cent over the six months. Premier Inn now has 607 hotels after the opening of five in the Middle East and 11 new Inns in the UK. Revenues for the chain are £393.4 million, a jump of 10.6 per cent.

Mr Rogers said that growth was occurring during the week and at the weekends, meaning that there was a marked increase in both business and leisure guests.

Looking forward to next year’s Olympic Games in the capital, Mr Rogers said he did not think the event would have a significant impact because only 15 hotels in the centre of the capital would be directly affected. He added that the Games would be positive, but not particularly material.

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MPs blame suing culture for high cost of car insurance

Wednesday, October 12th, 2011

The Commons Transport Committee has been hearing how claims firms, credit hire companies and unscrupulous lawyers mean that motorists are paying around £2 billion per year more in insurance costs than they should be. Blackburn Labour MP, Jack Straw, has delivered a report which criticises a culture of suing within the UK.

Mr Straw attacked the practice of cold-calling by accident claim firms, claiming that as he was preparing his report the night before he had picked the telephone up to a company asking him if he would like representation for an accident. He said that he had not been involved in an accident, but that the call proved just how widespread the problem had become.

Jonathan Djangoly, Justice Minister, said that the government needed to ban referral fees in order to cut down on the number of greedy insurance claims being made. He pointed out that motorists’ being told by lawyers that they cannot lose by making a claim are usually going to go for it, and that the practice had to be stopped.

Mike Penning, Roads Minister, labelled claims companies ‘ambulance chasers’. He said that he found it shocking that organisations were seeking to make a profit out of someone else’s injuries. Reportedly, around half of all motor insurance claims are made for personal injuries.

Comprehensive car insurance taken out annually went up, on average, to £892 from £636 over the year ending in March. By June, that figure was £923.90 and is likely to hit four figures in the near future.

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Cruise holidays becoming increasingly popular

Wednesday, October 5th, 2011

The number of bookings for cruise holidays is set to soar next year, according to recent research. The Passenger Shipping Association said that around 835,000 holidaymakers will set sail from UK ports next year.

The figure represents a 28 per cent increase over the last two years. According to industry experts, the popularity of the cruise has grown as people realise that they represent good value for money.

Even though the average price for a cruise is around £1,000 per person, the 2cost tends to include entertainment, food and trips to a number of cultural destinations. Prices are also continuing to come down as customers tend to book trips close to the date of departure.

The PSA said that if foreign departures are taken into account, it expects 1.73 million Brits to board a liner in 2012. Large cruise companies such as Cunard and P&O have already introduced bigger ships to UK ports in order to soak up the growing demand. In April last year the Azure, a ship capable of accommodating more than 3,000 passengers, was launched in Southampton by P&O.

PSA director, William Gibbons, said 2011 had been an excellent year because cruise companies were offering a quality product at a reasonable price. Online agency, Iglu Cruise, which takes around 50,000 bookings each year, confirmed that the increased popularity was because customers knew that once they had paid almost everything on their trip was already covered.

Managing director, Simone Clark, said there was no longer an identifiable market for cruise holidays and that anybody could be on the line when she picks up the phone.

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