Posts Tagged ‘profits’

Travel agents riled by United move

Wednesday, September 2nd, 2009

US travel agents are up in arms over United Airlines shifting the cost of credit-card fees to travel agents, beginning next month.

The move by UAL Corporations has alarmed the American Society of Travel Agents, which is concerned other airlines may follow suit, potentially increasing the cost for agents and consumers by more than $2 billion per year.

Although no other airlines have followed United’s moves, travel agents fear the change could spread across the industry, potentially raising the cost of tickets.

The move targets just 28 travel agents that don’t do much business with the carrier, with the charges to be implemented from September 28.  Once the changes take effect, United will no longer pick up the merchants fees for tickets purchased at travel agents, usually at two or 3 percent of the ticket price.

However a United spokeswoman said the change follows a cost-benefit analysis that will affect less than 1 percent of travel agents that do business with the airline.

She went on to say tat the agreements were implemented by the need to improve travel agent performance and to adjust costs associated with travel agency profits against the profits they generate.

Agents could avoid the fees if they stop booking United fares of or the customers pay cash.

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Airbus delivers 4th Qantas A380

Tuesday, August 25th, 2009

Qantas will ramp up superjumbo flights to London and Los Angeles after delivery of its fourth Airbus A380, the world’s largest passenger aircraft.

The Sydney to London flight will increase from three to five services per week, and Sydney to Los Angeles will increase from three to four weekly.

Sydney to London A380 services will increase from three to five per week, and Sydney to Los Angeles services from three to four per week.

The news comes as the airline cited a drop in passengers on its London and Los Angeles routes, leading a fall in profits.

Qantas reported last week a $117 million net profit for the financial year, down from $969 million the year before, and also plans to cut costs by $1.5 billion over three years.

Cost cutting strategies proposed by the airline include reconfiguring the aircraft, technologies and fuel saving methods.

Qantas chief Alan Joyce said the Los Angeles and London routes were “the biggest issue” and were suffering significant losses as a result of a high level of competition, a high level of discounting and a drop in business traffic.

He said the two routes were very much dependent upon “premium” traffic, which was down 20 to 30 percent as a result of the global financial crisis.

“So as the economy turns, as the business market comes back, those routes will improve,” Mr Joyce said.

The airline is due to receive a further two A380s by the end of 2009, with a further three due to be delivered next year.

Thanks to the Age for the above quotes and figures.  For more information on this article visit their website.

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Thomas Cook increase holiday prices by 8%

Monday, August 17th, 2009

Travel giant Thomas Cook have increased holiday prices by about 8%, which works out to be £140 extra on a typical family getaway.

The company has taken advantage of recent wet weather in the UK, leaving those looking for last minute bargains with fewer deals.

The increases in prices work out to be about 8%, which is roughly £35 to 450 per person, helping to boost profits following the impact of swine flu and also by cutting the number of holidays its sells, by almost a million per year since 2007.

Following the collapse of travel giant XL and competitor TUI also cutting the number of packages, Thomas Cook’s move has meant that there are about 2.5 million holiday packages for sale compared with two years ago.

Many travel operators have reported a surge in last minute bookings, with Egypt and Turkey being popular destinations for families.

Thomas Cook have 9% fewer holidays than the same time last year, allowing it to raise prices to offset some of the impact that has been caused to travel by the swine flu outbreak, with losses already at about the £12 million.

The travel company had sold around 90,000 holidays to Mexico before the swine flu outbreak, with many choosing to cancel their break or to choosing to book at the last minute to destinations closer to home.

Many hotels still have their doors closed in Mexico, with Thomas Cook anticipating annual losses of £20 due to swine flu.

In spite of the losses, Thomas Cook remain confident that profits will be around £430 million, and believe that the number of ‘staycationers’, those choosing to holiday at home due to the recession, is exaggerated.

Quotes thanks to the Mirror.  For more information on this article please visit their website at www.themirror.co.uk

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Avis report half yearly loss, stabilisation in the car hire market

Friday, August 14th, 2009

Avis Budget Group has slipped into the red this year with a further $6 million loss for the quarter, compared with a profit of $15 million in the same period last year, but says that they have seen a stabilisation in the market.

For the first six months of this year Avis have recorded results reaching $55 million. “While we continued to face sharply reduced demand for vehicle rentals in the second quarter, rental volumes did stabilize,” said Ronald Nelson, Avis Budget Group Chairman and CEO.

“We also made significant progress in several other areas. Our cost saving initiatives continued to deliver substantial benefits.”

Total revenue for the second quarter dropped to $1.3 billion, 17% down from the same period last year, with half-year revenue down to $2.5 billion, 17% down on last year.

Number of rental days for the company dropped by 21% to 22.7 million, from 28.6 million for the April to June period.  Overseas markets held up better compared with the US, recording only a drop of 10% and 22% respectively.

“Demand for car rental seems to have stabilized in the second quarter,” said Avis about the results.

“Third quarter demand, especially in the leisure segment, appears to be modestly stronger than recent trends, allowing some upward pressure on pricing to continue as our fleet levels remain in line with demand.”

Avis still hesitated to predict results for the full year saying that conditions were challenging.

Thanks to e-travel blackboard for the above quotes.  For more information visit their website.

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Thomas Cook blames losses on swine flu

Friday, August 14th, 2009

Tour operator Thomas cook has reported positive summer trading despite last-minute bookings and taking a £20 million hit from the outbreak of the swine flu pandemic.

The group said that although UK bookings were down 11 percent, average selling prices were up by 8 percent, with many last minute bookings due to Britain’s recent wet weather.

However, it follows TUI Travels grim forecast of the upcoming winter season, with UK bookings down by 13 percent to the same time last year, with key markets flat or ahead of last years bookings in line with capacity cuts.

The group is uncertain how next summer will be, they will continue to anticipate further growth in profits and margins next year, and has abandoned the operating profit target of £480 million.

Thomas Cook’s chief executive, Manny Fontenla-Novoa, said the world had become “a very different place” since he made that forecast, adding: “We’re confident we’ll hit £480 million but not next year.”

He went on to play down suggestions that the group may cut capacity again next summer, insisting that predictions were based on unemployment reaching 3 million.

Mr Fontenla-Novoa claimed the swine flu impact was “more significant than we anticipated”, forecasting a yearly profit hit from the pandemic of more than £20 million, partly due to negative publicity in Germany over the recent outbreak in Majorca.

He added that Thomas Cook continued to seek further acquisitions, and was in talks over opportunities in Russia and China.

Thanks to timesonline.co.uk for the above quotes.  For more information please visit their website.

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World’s largest hotel group predicts slow recovery

Wednesday, August 12th, 2009

The world’s biggest hotel group, Intercontinental Hotels, has reported that it has seen virtually no sign of recovery, and it could take years for trade to return to the levels it once was.

The group, which operates both the Crowne Plaza and Holiday Inn brands, said that the recession was continuing to have an effect on travel budgets.

Operating profits fell 38% to $179 million in the first half of this year.

The group said that while occupancy levels were evening out, room prices were under pressure.

“We can’t see any sign of recovery and it could be two years before we get back to levels of travel we were at before,” said chief executive Andrew Cosslett.

“This is one of the toughest years on record with little respite and it will continue to be challenging this year and into next.”

The group added that while reservations for July had benefited from improved demand from leisure travellers, it could not predict future booking trends.

The Intercontinental group has 4,300 properties worldwide consisting of over 630,000 rooms.

Thanks to BBC news for the above quotes.  For more information on this article visit www.bbcnews.com

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Scottish tourism profits despite recession

Tuesday, August 11th, 2009

Scottish tourism managed to bring in a record £63.5 million last year, VisitScotland announced yesterday.

Although tourist numbers fell by over a million, the statistics still show that profits were up compared to the same time last year.

VisitScotland said that it successfully encouraged more travellers to visit Scotland during the quieter months, worth an additional £17 million more than last year, as spending and a fall in the numbers of business travellers.

‘This is great news for everyone in Scottish tourism and highlights the importance of working in partnership with our industry, especially during such challenging economic times, to get tourism growth back on track’ said group product manager for VisitScotland Suzanne Casey.

Tourism Minister Jim Mather added that it was vital Scotland looks for new and innovative ways to attract visitors to the country.

Thanks to the BBC for the above quotes.  For more information please visit their website at www.bbcnews.com

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Car rental companies shift to foreign made, cheaper fleets

Tuesday, August 11th, 2009

Car Hire companies in the US are adding more foreign manufactured cars to their fleets than ever before.

In the past six months, 48.8% of cars to become part of rental fleets were produced by Ford, Chrysler or General Motors, compared with almost two-third at the same time last year, according to Automotive Fleet magazine.

About 8 in 10 vehicles sold to rental companies came from local manufacturers, but now the big three rental companies, Avis, Hertz and Dollar Thrifty are increasingly adding foreign names like Hyundai, Kia, Toyota and Nissan to their fleets.

This change shows how the domestic automakers are losing to their foreign competitors, and how car rental companies are tightening their belts and dealing with slimmer profits as the travel industry is by the recession.

Rental companies want to keep customers happy rather than provide the cheapest option, and they also want vehicles that can hold their value for the longest.

“It’s amazing how things turn around,” car-rental industry consultant Neil Abrams said. “It used to be you’d never see foreign cars in fleets, but the companies re-examined their businesses and decided to embrace non-U.S. brands.”

The major car rental companies in the US were once controlled by the automakers, with all having spun off as independent companies, but recently have found themselves diversifying to several brands of cars for hire.

“For some models, we’d find ourselves selling 50 percent to 60 percent of our production into rental,” George Pipas, chief sales analyst at Ford, said.

Consumers are also playing a significant role into the shift of focus.

Drivers are now choosing to buy imports over American cars, so it’s not surprising that rental companies follow these trends, said Mark Norman, president and chief operating officer of Zipcar.

For more information on this article, visit chicagotribune.com

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Thrifty Car Rental reports Q2 profits

Friday, August 7th, 2009

Car rental company Thrifty has announced a quarterly profits increase of 15% following a series of cost cutting strategies.  The companies share price went up by 19% to $19 from a low of 60 cents in March this year.

The company has reported a loss in the last four out of seven quarters and has reviewed their projected revenue for 2009 expecting between 8% and 10% compared to 6% and 12% as earlier forecasted.

“We were pleased with this quarter’s operating results, particularly in light of the contracting economy and the bankruptcy of Chrysler, one of our major suppliers. Over the past two quarters, we have taken a number of steps to enhance our operating performance and cash flow, and those actions, combined with improved used vehicle residual values and firmer rental pricing, drove our improved second quarter performance,” said the chief executive, Scott L Thompson.

Two other major players in the car rental industry Hertz and Avis have both reported losses in the last quarter.

Thanks to www.wsj.com for the above quote, for more information on this article please visit their website.

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