Posts Tagged ‘recession’

Car hire troubles set continue next year

Wednesday, December 23rd, 2009

Car hire comparison site Carrentals.co.uk is advising all customers that the troubles affecting the car rental industry throughout this year are set to continue well into 2010. Carrentals.co.uk managing director Gareth Robinson said that due to the recession many car hire firms have been unable to secure the required funds to increase the size of their fleets in line with customer demand. He said that this has caused a shortage of vehicles as well as price hikes on those vehicles still available.

It had been expected that the recession would produce a reduction in the amount of customers hiring vehicles and that the limited number available would be enough to cater to demand. However the number of people wanting to hire vehicles remained steady and this resulted in some companies selling out completely during peak periods. This trend could get worse in 2010.

easyCar’s Owen Coles said that the industry is bracing itself for chronic shortages of vehicles available to customers. He said that as the recession eases more customers were expected to book car rentals. However there is still an amount of uncertainty as to whether financial institutions are ready to hand over the necessary funds for car hire firms to expand fleets to meet the predicted demand.

Robinson said that his advice to anyone wishing to rent a car next year would be to book it as far in advance of the date of travel as possible. He also advised customers to use a price comparison site to secure the best deals.

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American Airlines expects drop in traffic

Monday, September 21st, 2009

The world’s largest airline, American Airlines, announced late last week that it expects September traffic to drop by 16.4 percent from August, as capacity drops by 9.7 percent.

Carriers generally reduce their schedule after the Labour Day long weekend, and other airlines have been making cuts too.  This year’s autumn schedules have been significantly lighter, as airlines try to match consumer demand.

American says that it expects third quarter unit revenue — revenue divided by capacity — to drop 14.5 percent to 15.5 percent compared with the same period last year.  The whole operation, including regional airlines, is expected to fall 14.3 percent to 15.3 percent.

Meanwhile, American is anticipating costs to rise from August to September, however, not as much as previously expected.  Excluding fuel and special items, the costs are expected to rise from 8.43 cents per available seat mile in August to 9.08 in September.

The airline has said that the increase is due to the reduced capacity, pension costs and the costs from efforts to improve reliability.  The costs would have risen even higher if not for cuts in smaller passenger-related expenses, foreign exchange and other cost-reduction strategies.

Airline financial analyst Hunter Keay wrote in a note that American’s drop in passenger revenue was less sever than competitors, due to the fact that the airline did not expand into new international markets last year where the recession has tightly gripped the air travel industry.

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British Airways cabin crew told to wait

Friday, September 18th, 2009

Unions have urged British Airways cabin crew to wait against the airlines bid to cut their pay and alter their contracts.   In a message to the airlines 14,000 cabin crew, the British Airlines Stewards and Stewardesses Association (BASSA), the union said that it was not time to reach a deal.

The crew were hold to hold firm and stay strong.  The BASSA feel that the wind is behind them and before long everything BA have been plotting and scheming would be exposed as nothing more than a farcical and opportunistic scam.

British Airways have been in talks since May over proposed changes to conditions and pay of cabin crew.   The airline wants a two-year pay freeze, reduced holidays and cutbacks to travel allowances for flying to long-haul destinations.  BA would also like to cut 2,000 full-time equivalent jobs and it told casual staff this week that their contracts would be terminated by the end of next month.

The struggling airlines is seeking the extreme cuts as it has been hit badly by the recession, and lost a total of £401 last year.

Analysts have raised the topic of industrial action against British Airways if it tries to force through its changes, which could have a devastating effect on the airline.

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Hotels drop room rates worldwide

Wednesday, September 16th, 2009

A new report has shown that across the world have been forced to slash in order to attract customers as the global recession takes its toll on the travel industry.

The survey compiled by Hotels.com showed that rates in Sydney are on average 30 percent cheaper than a year ago, rates in Auckland have tumbled 40 per cent, while in Singapore they have fallen by 35 per cent and New York by 30 per cent.

The biggest slump in accommodation rates was seen in Moscow, with the average price of a room dipping by 52 percent, whereas rates rose by 12 percent on the resort island of Capri.

David Roche, president of Hotels.Com said he was expecting 2009 to be a year of dramatic price reductions across the world and, so far it has been.

On the other hand, the massive cuts have had an impact on stimulating the tourism industry, as long-haul travel is on the rise.

Hotels.com Asia Pacific managing director Johan Svanstrom said that long-haul inbound travellers would see lower hotel rates to help offset the perceived expense of getting there.

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Car hirers urged to book now for 2010

Wednesday, September 9th, 2009

A North Cypriot car hire company is urging tourists to book their car hire now in order to guarantee an available vehicle for the 2010 holiday season.

Pacific Rent-a-Car has predicted a major shortage of vehicles which will make last minute bookings impossible as the company struggles with demand.

The news comes after statistics reveal a 15 percent increase in holidaymakers in Northern Cyprus, compared to a 30 percent drop in travellers to Southern Cyprus.  One of the reasons for this is because of the Turkish Lira which offers a better exchange rate over the Euro, which is the currency of Southern Cyprus.

The recession has hit the car hire industry, as a whole, but particularly in Cyprus, as many firms have gone out of business.  Also, car hire companies have been struggling to obtain bank loans, so many car hire companies have been unable to obtain credit to update or replace their fleet.

Pacific Rent-a-Car is presently offering customers an incentive of a 15 percent discount for early reservations as well as the peace of mind that the car hire is guaranteed, rather than arriving at the airport with no available vehicles.

Many experts are predicting a steep rise in the cost of car hire in 2010, something which has already been seen this year in Spain and Greece.  Holidaymakers planning to take advantage of car hire are strongly advised to book sooner, rather than later in order to avoid paying extortionate pricing or avoid missing out on a car altogether.

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American Airlines to cull 921 jobs

Thursday, September 3rd, 2009

American Airlines announced earlier this week that it plans to cut 921 cabin crew positions as part of a previously announced capacity reduction as the airline braves the current downturn in business and leisure travel.

The 921 jobs equate to about 6 percent of the total the total American Airlines cabin crew and include 449 positions that were eliminated voluntarily.  The job cuts will take place from October 1.

The airline had earlier predicted job cuts of around 1,200 in June this year.

The airline industry has been in downsizing mode for all of this year, hit with volatile fuel costs and weak demand due to the current recession.

Amercian Airlines said earlier in June that it would cut capacity by almost 8 percent this year.  Other carriers have followed suit, including Delta Air Lines, which said it plans to cut total capacity by 10 percent with reductions beginning in September.

The airline also warned on Monday that employees in airport service positions could also be cut due to declines and shifts in capacity during the winter travel season.

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SkyEurope latest victim of the recession

Wednesday, September 2nd, 2009

Budget carrier SkyEurope is the latest victim of the downturn in the travel industry, ending operations yesterday due to ongoing financial problems.

Amidst the collapse which has left many passengers stranded overseas, the troubled airline, which flew to destinations across Europe including Luton Airport, stopped trading after airports banned SkyEurope due to non-payments of debts.

Despite the collapse of the airline, passengers who have booked flights with SkyEurope may be entitled to a refund, depending on how they purchased the ticket.

SkyEurope serviced several eastern European destinations such as Kosice, Bratislava, Vienna, Prague, and was popular with city break travellers departing from London’s Luton airport.

The airline first showed clear signs of trouble when it was forced to cancel services from certain airports this week due to unpaid debts.

The airline was banned from several airports including Vienna and faced a handling ban at Prague unless payments were received.

SkyEurope announced today that all flights are cancelled and the website regretfully apologises for the inconvenience to customers.

The airline has been in financial trouble for a period of time now, but in July claimed it found an investor.  SkyEurope blamed the global recession and the downturn in the travel industry for its collapse, which saw the aircraft reduce its fleet from 15 to five aircraft over the last year.

According to their website: ‘SkyEurope suspends its operations’ , and informs passengers who purchased tickets over with a credit card and over £100 can receive a refund from their card provider.

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BP no longer prefer British Airways

Friday, August 21st, 2009

British Airways has been dropped by BP as the preferred airline for the company, as many companies have been stripping back costs associated with business travel due to the global economic situation.

BP said on Tuesday that, as part of cost saving measures, the company will now choose flights that offer the ‘lowest logical fare’, said a company spokesman.

He added that the company would continue to use British Airways if they were the cheapest or the only airline to service certain destinations, but said there was too much commercial pressure on the airline industry to offer corporations who fly frequently cheaper fairs.

A British Airways spokeswoman said: ‘All of our corporate agreements are confidential. We continue to work closely with all our corporate partners to meet their requirements in these challenging times. We are confident in our ability to provide competitive travel arrangements for all our partners on our extensive global network.’

BP has said employees would not be able to fly business class on domestic routes, but could for long-haul routes.

The company has already reached their cost-cutting target for this year, totalling $2 billion and is expecting to save another $1 billion in cost-cutting measures by the end of the year.

Thanks to the Wall Street Journal for the above quotes.  For more information visit their website.

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Europcar introduce ‘frequent drivers’ programme

Friday, August 21st, 2009

UK car hire giant Europcar has introduced a new loyalty scheme aimed at maintaining existing customers and increasing accessibility and affordability in the car rental market.

The new programme, Hire Rewards, is aimed at customers who hire a car several times per year, potentially offering a saving of over $200 for a week of hire.

The introduction of Hire Rewards comes as the car hire industry is struggling due to the recession and downturn in the travel industry, and many companies have to come up with new initiatives to keep customers coming back.

Marketing director of Europcar, Catriona Lougher says the aim of the programme is to ensure customers return to Europcar by offering the Hire Rewards programme.

‘27% of Europcar customers hire because they are worried about the reliability of their own car, 21% because their own car has broken down and 24% require a bigger vehicle. Furthermore, 23% hire because they don’t have a car. We want these customers to keep coming back to Europcar by offering Hire Rewards’ she added.

Customers can apply  for the loyalty programme by visiting website or in person at any Europcar outlet.

Thanks to Webwire for the above quotes.  For more information visit their website at www.webwire.com

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Cumbria reports record tourist numbers

Thursday, August 20th, 2009

Domestic travellers, known as ‘staycationers’, are helping travel operators generate profits despite the economic situation.

Cumbria Tourism reported bookings up by 20 percent compared with the same time last year, which meant an extra £346,000 was generated for the region’s economy.

The increased interest in Cumbria for domestic travellers was due to the low value of the pound against the euro as well as many travellers choosing shorter and more cost effective holidays due to the recession.

The lakes area also had some celebrity endorsement last week when Gordon Brown went there.

Chief executive of Cumbria Tourism, Ian Stephens, said it was vital for holiday companies to continue to promote their businesses to remain competitive.

The Office Of National Statistics revealed last month a 17 percent slump in trips abroad with many holidaymakers opting to holiday domestically.

Thanks to England’s North East for quotes.  For more information visit their website.

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