NEWS — SHOW REPORT
The Business Travel Show 2015 drew corporate travel buyers, suppliers and TMCs to London’s Olympia. IAN TAYLOR reports
Long-haul business-class fares to rise 2% this year
Long-haul air fares will be higher this year than in 2014 despite the sharp decline in the price of oil since last summer, according to American Express. Amex forecasts an average 2%-
3% rise in long-haul business- class fares from the UK this year, although vice-president for consulting Caroline Strachan suggested economy long- haul fares should be broadly stable. Speaking at the Business Travel Show, Strachan dismissed the idea that lower oil prices would feed through to fares, saying: “Airline fuel surcharges are being replaced by price increases, so fares stay the same. If the
Caroline Strachan
“Airline fuel surcharges are
being replaced by price increases, so fares stay the same”
demand is there, prices will stay high. “Business travel is back and so is consumer travel. All the airlines are saying: ‘Fuel surcharges may go, but prices aren’t coming down.’” She suggested the increasing number of joint ventures between European and US carriers would lead to an increase in fares, “especially on transatlantic routes”. Strachan
said long-haul
fares from the US would rise by up to 3% in business and
economy, and she forecast
increases across the Americas, with prices on US short-haul routes likely to rise by 2%-5% this year in economy and 3%-6% in business class. However, Amex forecast a
fall in short-haul business-class fares across Europe as a result of lower demand and “tightening corporate budgets”. Strachan said the average economy short-haul fare from the UK could fall by up to 2% year on year. She said Amex expects a
levelling off in fare rises in Asia- Pacific, except in India where prices should continue to rise. ❯ NDC fares fear, back page
14 •
travelweekly.co.uk — 5 March 2015 TMCs told: ‘Check contracts or pay Toms’
A leading corporate travel tax specialist warned travel management companies (TMCs) and corporate clients they should check the wording of contracts, following the Supreme Court ruling in the Medhotels case last year. The ruling clarified the agency status and VAT liability of accommodation provider Medhotels under the Tour Operators’ Margin Scheme (Toms).
Chris Gibson, taxation
director at Hogg Robinson Group, warned travel buyers and TMCs their contract
terms should specify: “For the purposes of this agreement, the TMC is acting as an agent.” He warned: “If you contract with the TMC as a supplier, the transaction will be subject to [Toms] VAT – and VAT recovery is not allowed under Toms.” Gibson said: “The standard
wording in service contracts risks VAT recovery. It says: ‘Nothing in the relationship creates a partnership or agency arrangement between the parties.’ This is at odds with what happens in practice, and the tax authority can argue Toms should apply.”
Frederic the Rabbit, the star of easyJet’s first
business travel-focused TV ad campaign, cut
the ribbon to open the Business Travel Show
GTMC unveils manifesto for election
The Guild of Travel Management Companies (GTMC) has demanded the next government “swiftly adopt” the recommendations of the Airports Commission and expand high-speed links to Heathrow, but stopped short of identifying the airport as its preferred option for expansion. The association’s manifesto
for the general election called on the government to prioritise infrastructure investment and demanded “an immediate
decision” on airport capacity in the southeast “with spades in the ground by 2020”. The GTMC wants a “commitment” to financing the HS2 and HS3 rail lines and “enhanced domestic air connections to regional airports”. It released research among 1,000 corporate travellers suggesting 51% would fly more frequently following a reduction in APD and 85% support a high-speed rail link to Heathrow.
SHOW REPORT
Amex hails return of business travel
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