p16 BTF June26 23/6/09 15:08 Page 16
City & finance
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Industry leaders mixed discounting worries with hopes for recovery at last week’s Barclays Travel
Forum. The panel comprised (from left) Travel Counsellors’ Steve Byrne, Monarch’s Liz Savage, Flight
Centre’s Chris Galanty and Tui’s Dermot Blastland, moderated by Michael East. Rob Gill reports
APD/APC.
Tax hikes slated
as ‘reprehensible’
GOVERNMENT plans to increase Air Passenger
Duty and the £1 Atol levy were condemned as
“unfair and reprehensible” by Stuart Jackson, Cos-
mos managing director for mainstream holidays.
“We have a lot of heavy taxation coming our
way in the next six months with APD and APC.
The consumer is going to get hit hard,” he said.
“To increase APC when APD is already going
up is unfair and reprehensible.”
The increase in APD due in November was
criticised, even though it could be partly masked
by rock-bottom air fares.
Tui Travel managing director Dermot Blastland
said: “The rise in APD has been aggressive. They
tried this in Holland but could not do it as people
just fly from Germany or Belgium. Suddenly you
have to pay £80 on a flight to Florida – when you
times this by four it becomes ridiculous. They Discounts cannot
are going to kill the goose with this tax.”
BUSINESS TRAVEL.
Recovery tipped
last, warns panel
for January 2010
HEAVY discounting of air fares Travel Counsellors manag-
and holiday prices cannot ing director Steve Byrne
continue at current levels, said it was important the in-
THE CORPORATE travel market might begin to members of the Barclays dustry resisted the temptation
recover from the start of 2010 once the pressure Travel Forum panel warned. to make huge discounts
on companies to cut costs has eased. Flight Centre’s UK managing director, Chris because of the recession.
Flight Centre, which owns FCm Travel Solutions, Galanty, cited fares such as £500 for return “You have to try to equip people who are
gets 60% of its business from the corporate flights to Australia and £1,000 for business class selling the services to be confident enough not
market and has seen a rapid drop in business to New York as examples of unsustainable prices. to discount, which is the big challenge we have
travel this year. “These flight prices cannot continue as in the current market,” he said. “It’s tempting
Flight Centre’s Chris Galanty said: “We have airlines cannot sustain these losses for much to discount to secure cashflow but you will
hit the bottom for the corporate market and it longer,” he warned. undermine your business in the long term.”
will not get worse. Customers will start travelling “Discounting is important to get people Byrne added that the current low flight prices
again and from January 2010 it should pick up.” travelling but the pricing has to be at a level that would encourage people to travel despite the
Eurostar commercial director Nick Mercer suppliers can survive and thrive. recession, but offering good service and added-
added: “Business traffic is down globally. Deals “There needs to be a balance.” value remained crucial.
on long-haul flights do not indicate a problem Liz Savage, Monarch Flights and Holidays Andrew Botterill, UK managing director of
with the leisure market but show that airlines managing director, added: “Discounting has Stella Travel Services, which owns Travel 2
are trying to compensate for the loss of the to be at sustainable levels. and Global Travel Group, agreed: “If you’re just
traditionally high-yielding business market, “Many operators are giving away the seats competing on price you are going to be in trouble,
which is down 35-40% on some routes.” and relying on ancillary sales.” you have to add value for your customers.”
16 26.06.2009
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