City & finance Keep up to date with the travel industry’s financial news and results at
ttglive.com
Co-operative sees tough times ahead
Chris Gray. THE CO-OPERATIVE Travel Trading Group (CTTG) is warning there will be little let up from tough trading conditions next year, despite reporting a half-year profit in all its divisions, including travel. Profits for the group as a whole rose 17% to
£260m for the 26 weeks to July 3, although CTTG chief executive Peter Marks said there had been tough economic conditions across all the group’s businesses in 2010. “We do not expect things to improve until late 2011 at the earliest,” he added. Profits rose in the food, finance, pharmacy and
funeral divisions, but travel suffered a huge drop. The Co-operative Travel reported a profit for
the 26 weeks to July 3 of £400,000 — an 84% decline from the £2.5m profit reported last year. A spokesman said last year’s profits were based on a 28-week trading period, and that changing the period to 26 weeks this year meant the busy booking period of the first two weeks in July was not included, making the drop seem more severe. Comparing a 26-week period in 2009 with the
equivalent this year gave a 70% drop in profits. Marks said travel had arguably faced its “most challenging year ever”. The Co-operative Travel managing director Mike Greenacre said the results were “creditable” in a year when many companies were reporting losses.
Profits through CTTG slumped 84% over the period “Margins remain under severe pressure in what
is a fiercely competitive market,” said Greenacre. “It is a testament to the dedication and commit- ment of everyone at The Co-operative Travel that we have remained profitable in this incredibly difficult year. “This year began with the heavy snow that stalled the traditional early-booking period, and continued with an earthquake in Chile, riots in Bangkok, civil unrest in Greece, British Airways strikes and finally the unprecedented volcanic eruption in Iceland, which brought the industry to a standstill for a week.” Greenacre added that the 13 travel company
failures this year had knocked consumer confi- dence, which was already low because of the prospect of more job losses.
Google deal put under scrutiny
US AUTHORITIES are to undertake an extended inquiry into Google’s purchase of travel technol- ogy provider ITA Software. Google bought ITA — which provides flight information for airlines, online travel agencies and flight-comparison sites and has clients includ- ing Virgin Atlantic, TripAdvisor and Ebookers’ owner Orbitz — for $700m in July. However, some online agencies, such as Expedia,
have raised fears that Google could eventually start favouring its own in-house products over third- party travel companies during internet searches.
14 03.09.2010 The US department of justice is now asking for
more information about the deal to assess whether there are any anti-competition issues. Andrew Silverman, a Google senior product manager, said: “While we think this acquisition will benefit travellers as well as those seeking their business, we know that closer scrutiny has been one consequence of Google’s success. “While this means we won’t be closing the deal right away, we’re confident that the department of justice will conclude that online travel will remain competitive after this acquisition closes.”
Kiwi carrier to raise capacity
AIR NEW Zealand is planning to increase capacity across its network after reporting rising demand and yields. The carrier said the aviation industry was showing signs of recovery and that it was intend- ing to add aircraft to its fleet, and increase the use of existing aircraft. Its pre-tax profits for the year to the end of June were £56m, compared with £4m last year. Much of the carrier’s profits came from lower fuel bills and cost-cutting, which helped reduce operating costs by £273m over the year. Air New Zealand chairman John Palmer said continued uncertainty over the strength of the global economic recovery was still suppressing demand for air travel. The carrier’s increase in capacity will focus on the local market. But it is also due to take delivery of five Boeing 777-300ER aircraft, with a new inflight product that will be available on flights from Auckland to London via Los Angeles, from April. Air New Zealand dominates its local market,
where it competes on main routes with Australian national carrier Qantas. Virgin Blue announced last month that it would quit New Zealand in October.
■Interview: BATA boss on government taxes, p18
Avis Europe cuts its way to profit
AVIS EUROPE has turned a first-half loss into profit thanks to a successful cost-cutting programme and surviving the ash cloud crisis unscathed. The car rental firm revealed a profit of
¤300,000 for the six months ending June 30, compared with a loss of ¤13.9m for the same period last year. Rental income rose 1.1% to ¤539m, and the
company did not suffer from the ash cloud as cancelled bookings were offset by increased one-way rentals and walk-up business. Avis said the results showed a momentum of “growing profitability and returns”.
020 7921 8011
rgill@ttglive.com
Rob Gill
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60