News

Archive for November, 2011

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.

Thomas Cook shares up as new financial package agreed

Tuesday, November 29th, 2011

A new deal with the banks to secure additional financing confirmed by travel operator Thomas Cook has seen the value of its shares lift slightly. Originally, when the firm said it was looking to increase a loan from £100 million to £200 million, shares fell by 75 per cent. The price has now risen by 23 per cent, but is still 88 per cent lower than the value in January.

A fresh deal with banks including HSBC, RBS, Barclays and UniCredit was agreed on Saturday, and will replace the short-term credit agreement which was announced in October. Group CEO, Sam Weihagen, said he wanted to thank the institution for coming to a positive decision in such a short time.

He added that the financial package would be used to make sure that Thomas Cook’s balance sheet was strengthened, and the company made more financially resilient generally.

This year has seen a number of factors impact on Thomas Cook’s earnings. The usually popular holiday destinations of Egypt and Tunisia saw tourist figures dwindle as both countries experienced widespread social and political unrest. The recent rains and flooding across South East Asia have also resulted in travellers choosing not to fly to Thailand.

As with the rest of the travel industry, the high price of oil continues to hamper margins. The firm already has loans of around £900 million, and the latest deal will push this well over the £1 billion mark. The company has been keen to point out that it is still within the terms of its agreements with other lenders.

Banks agree to increase Thomas Cook loan

Monday, November 28th, 2011

Thomas Cook has been given approval by its banks to extend its latest loan. Lenders had already agreed to give a £100 million credit facility. Last week, the travel firm’s shares tumbled 75 per cent after it said it was looking for further financing. However, banks including Royal Bank of Scotland, HBSC, Barclays and Unicredit have said they will add another £100 million. Thomas Cook said that the money will be used to keep the company going through possible continued difficult trading conditions.

The travel operator has had a challenging year. It has suffered from a downturn in demand for destinations such as Egypt and Tunisia because of this year’s political and social unrest. The high price of oil has also affected profits, as have a series of natural disasters, the latest being the floods in Thailand.

Thomas Cook has been forced to issue three profit warnings, and has also parted company with chief executive. Sam Weihagen, the present group boss, said he was pleased that the banks had acted so quickly in approving the latest financial support.

He added that Thomas Cook would now be in a position to strengthen its balance sheet, and make sure the company was in a solid financial position. In September, the tour company owed a little less than £900 million.

The latest deal will push its debts over the £1 billion mark. However, Mr Weihagen was keen to point out that, at the current time, the firm was not in breach of any of its other loan agreements.

Foreign food off the menu for British tourists

Friday, November 25th, 2011

A recent study into the eating habits of holidaymakers reveals that Brits are not particularly keen on sampling foreign fare. The survey, conducted by Dubai Tourism, shows that well over half of British travellers are not prepared to at local food. Just under two thirds said they preferred to head for a fast food outlet like McDonald’s, KFC or Burger King.

Half of the respondents admitted that they would be more adventurous if they were given advice on how safe the foreign food was. The dishes that were of most concern were from Japan and the Middle East.

A quarter of those taking part said that they did not leave the UK without packing certain items of food such as biscuits, chocolate and tea bags. Marmite and tomato ketchup were also likely to end up in the suitcase.

Boss of Dubai Tourism’s UK and Ireland branch, Ian Scott, said it was a pity that more Brits did not get involved in the local culinary scene. He added that eating the local fare was part of experiencing the culture of another country. He went on to say that he understood why people were sometimes wary about food they were not familiar with, but urged travellers to be a little more adventurous.

East Anglian travellers proved to be the most adventurous in terms of sampling the local cuisine, with people from Wales being the ones who were most likely to turn their noses up.

RAC documents rise in car costs

Thursday, November 24th, 2011

According to a recently published report by motoring group the RAC, the price of owning a car in the UK works out at just shy of £7,000 annually. The biggest cost is filling the tank, and the price of a litre of petrol has risen by £160 since 2010. Daily running costs are up to £2,743 across the 12 months, which is an increase of 11.1 per cent, according to the survey.

At the pumps, the average price of a litre of petrol is now 134.78 pence, where a year ago it was 118.4 pence. The price of diesel has also risen sharply and is currently 140.49, where last year it was 122 pence per litre.

Spokesman for the RAC, Adrian Tink, said drivers were suffering at a time when money was tight in general. He added that the cost of running a vehicle had increased at nearly three times the rate that inflation was going up.

A minor consolation is that cars are becoming more fuel efficient. An added headache is the cost of purchasing insurance. Because of a rise in the number of personal injury claims, and an increase in the cases of insurance fraud, companies are now charging 14.4 per cent more than they were at this time last year.

In 2009, the price of insuring a car was an average of 35 per cent cheaper. The RAC said that something needed to be done by the government to make the price of fuel at the pumps cheaper.

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.

London airports disruption over as fog disperses

Tuesday, November 22nd, 2011

Although passengers are being asked to double check with airlines, it looks like the delays and cancellations caused by fog at Heathrow and London City airports are now over. Poor visibility meant that 104 arrivals and 120 departures at the UK’s busiest airport had to be cancelled.

At London City, 18 departures and 13 arrivals had to be cancelled on Monday. A Heathrow Airport spokesman said that the fog was now dissipating and that there were no more flight restrictions being put in place. Around 1,300 aircraft use Heathrow on a daily basis. A City Airport spokesman also confirmed that there were no more problems.

On Sunday, a number of airlines affected by the weather conditions were able to book passengers onto other flights. Some domestic services were replaced by coaches, and some travellers accepted being put up in a hotel until the situation improved.

Some passengers have complained that queues at immigration were taking a long time to clear, and others have said that inefficiency at passport control could give foreign visitors a bad impression. A spokesman for the UK Border Agency said that extra members of staff had been brought into work to help deal with the extra number of passengers.

Eurocontrol, the European agency in charge of flight management, said severe weather was causing problems for airlines and passengers in Zurich, Paris, Oslo, Vienna, Brussels and Amsterdam. In the UK, weather warnings were issued for the South East and East of England, the West and East Midlands, and Yorkshire and Humberside.

Thomas Cook to close 200 shops

Monday, November 21st, 2011

Travel giant Thomas Cook will close 200 outlets on the high street as it continues to struggle with weakened demand for holidays. The company is due to announce the results of a wide ranging review of its operations on Thursday. The firm has already said that its merger with operator Co-operative travel will result in 75 shops closing.

The closure of an additional 125 premises will leave more than 1,000 workers with an uncertain future. Thomas Cook has already said that it will do its best to redistribute staff wherever this is possible.

It has been a challenging year for the operator. As well as general weak consumer demand, the firm has had to cope with cancellations following the troubles which erupted in the Middle East and North Africa earlier in the year. The high price of fuel has also taken its toll. Thomas Cook has been forced to issue several profit warnings in 2011, and also parted company with chief executive Manny Fontenla-Novoa in August.

Although Sam Weihagen is now in charge, the company is still to find someone to take on the top job on a permanent basis. Chairman Michael Beckett will also be replaced as of 1 December by Frank Meysman, who was offered the job in September.

Thomas Cook has been operating since the 1840s and is second only to TUI in Europe. However, economic uncertainty has seen shares drop from around 200p at the beginning of the year to just over 40p at the end of last week.

Airlines ask for abolition of Air Passenger Duty

Friday, November 18th, 2011

Virgin Atlantic, British Airways, easyJet and Ryanair have come together to lobby the government over the abolition of Air Passenger Duty. The airlines claim that the tax is damaging for the wallets of UK passengers, and makes the UK a less desirable destination to visitors from abroad.

First introduced as a tax to offset airlines’ carbon emissions in 1994, it is estimated that the Treasury will receive around £2 billion this year. A spokesman for the department defended APD by saying that unlike many other European nations, passengers in the UK are not charged VAT on their tickets.

Friends of the Earth have urged ministers to stand up to the airlines, claiming that APD is necessary to offset the carbon which is emitted from aircraft engines. With the introduction of the Emissions Trading Scheme in the new year, the airlines are saying that APD will no longer have a role.

Ryanair boss, Michael O’Leary, said getting rid of APD would do nothing to increase the airlines’ profits. He added that if it was abolished, the travelling public would have more cash in their pockets. He went on to point out that over the last half-decade APD had been responsible for 30 million fewer foreign visitors to the UK.

International Airlines Group chief executive Willie Walsh has asked Chancellor George Osborne to initiate an independent review of the tax. He said that APD had proven to be extremely damaging. A spokesman for the Treasury said that it had already looked at a range of reforms.

SeaFrance declared bankrupt but continues to operate

Thursday, November 17th, 2011

Ferries between Calais and Dover will begin operating again with SeaFrance after the firm was declared bankrupt in a French court. The operator suspended its timetable after the European Commission decided that a bailout suggested by the French government would not be legal. The authorities had been willing to put up 200 million euros for the beleaguered firm.

The matter has since been handed to the Tribunal de Commerce, which has ruled that although the company is bankrupt, it will be permitted to continue operating until 28 January, 2012. The court has also dismissed a £5 million takeover bid by rival ferry company DFDS.

The firm made its bid in conjunction with Louis Dreyfus Armateurs, a shipping operator. The CFDT union has also placed a bid on the table, but that too has been rejected. The court said that it would accept revised proposals, which have to be submitted by 12 December this year.

A spokeswoman for SeaFrance said that the company accepted the court’s ruling, and was pleased to be able to continue operating. On its website, the ferry operator apologised to customers who had been disrupted by the stoppage. If a solution to the situation is not found, then SeaFrance will close all operations on 29 January.

The company currently employs around 1,650 workers in the UK and France, and has four ferries running between Calais and Dover. Each year, the ferries carry around 3.5 million passengers between the UK and the continent.