Opinion Pay your dues We all want to contribute to the UK’s recovery, but it has to start from the top down
DESPITE AUSTERITY MEASURES, the chancellor announced before Christmas that the UK’s debt reduction targets are unlikely to be met for a few years longer than initially budgeted. Yet he still scrapped the 3p fuel duty increase planned for 2013 as, although it was predicted to raise £1.5 billion over the year, the multi-directional financial squeeze on ordinary working folk has been acknowledged. While many tax loopholes have
been closed to individuals and small businesses over the past few years, the UK does now have relatively attractive corporation tax rates to entice leading companies to do business and create jobs in the UK. If only the corporate giants would pay all their dues, we may reach our prosperity targets a little faster. Starbucks, Google and Amazon alone allegedly would have paid £1.2 billion in tax over the past three years, had they not ‘operated at a loss’ in the UK.
Boots and Cadbury apparently avoided £100 million and £60 million tax bills respectively by moving their HQs abroad, and communications giant Vodafone paid no corporation tax in the UK last year. The world clamours for Apple products and people pay handsomely for the privilege of owning the latest device, yet the corporation is said to have paid less than 2 per cent tax last year on profits earned outside of the US. All of these companies do create jobs, which is critical to aid the escape from the economic hole and to develop a personal sense of worth for those in employment, but unpaid tax sums of this magnitude cannot be filled by the little people, which are, after all, are many of the employees of these companies. Financial wizards may start
looking at the euro from a different angle to question whether Germany should actually exit in order to save the rest of the economies within the European currency but, whatever happens
in euroland, it’s heartening to see our UK spending power overseas is improving as the pound strengthens against both the dollar and euro. Of course, to support a positive UK economy and create jobs, we need to spend in UK markets but we see signs of optimism that our economic fortunes may take a turn for the better in 2013. Signs of prosperity in the airline industry were announced when Delta acquired Singapore Airlines’ 49 per cent stake in Virgin Atlantic in early December. Delta already indicated innovative thinking when it purchased an oil refinery in March 2012 to combat the challenge of high fuel costs. It may be a high-risk strategy to enter another thin margin, non-core business sector, but it might just pay off and give them a competitive edge. Innovation is critical for
survival in the fast-paced world in which we live. Technology is out of date by the time your credit card transaction has been
NDC: a new dawn? IATA’s recent proposal should be welcomed – with certain caveats
I CAN’T BELIEVE I’m nearly half way into my two-year tenure as Guild of Travel Management Companies (GTMC) chairman – and what a year it’s been. As I said at the GTMC autumn conference: if I’d had any hair, I would have lost it by now... Talking of the conference, one of our distinguished speakers was the International Air Transport Association’s (IATA) Aleks Popovich. Top of the agenda was IATA’s plan for New Distribution Capability (NDC). The GTMC has been discussing NDC behind the scenes with IATA since September because our members and partner global distribution systems (GDSs) have some concerns.
We’ve welcomed the chance to be part of the discussion. Travel management companies (TMCs) should welcome the chance to sell ancillaries – these days it’s not just about the seat on the plane. We’ll be able to give a better service to our clients, with greater consistency in offerings across different channels, and greater access to products. We’ll also be able to compare airline offerings across many areas, not just price. We’ll be able to monitor travel policies on ancillary sales and present our clients with more detailed management information (MI). There are a few worries. Not all airlines will be able to adopt the new technology at the same
pace, and airlines may have long-term agreements with GDS suppliers so may be unable to embrace the new technology in the near future. NDC changes the model away from a GDS- dominated supply channel so there may be an impact to the TMCs who rely on it for back office and MI. Many back-office systems would require updating in order to populate ancillaries, and TMCs face an increased cost, which has not yet been factored into their thinking. IATA assures us it does not
wish to bypass agents or GDSs, though I can see it will definitely impact the GDSs. IATA wants engagement with agents and participation in its working
The ACTE column
processed, and you only have to walk into a high street music store (if you can find one) to acknowledge the importance of predicting trends to diversify product offerings and adapt your approach to stay in business. You can only do that by being engaged in your business community. It remains ACTE’s sole mission to create an environment where industry leaders can identify and understand market challenges and trends to be able to plan and strategise for the future.
Caroline Allen is ACTE’s regional director. For more information visit www.acte.org or contact callen@acte.org
The GTMC column
groups to ensure the process is well thought-out before the technology is built. There will be IATA workshops throughout 2013 and a need for TMCs to be pilot sites. By participating we will ensure that our business models are protected.
NDC is ambitious, and my
prediction is that it may well take longer to complete the project than IATA anticipates.
Ajaya Sodha is chairman of the Guild of Travel Management Companies