Continued from page 64
Atol holder” or multiple smaller Atol holders fail, “the Trustees’ expectation” is that the government “will provide additional financial support to the ATT . . . as necessary”. That expectation “is based
on the support provided over many years” by the government and “written assurance by the secretary of state for transport”. The trustees note the CAA
continues to refine plans “to mount a successful repatriation” in the event of another large Atol failure, with “negotiation of improved contracts with various airlines” on replacement flying, contracts “with additional airlines” and “arrangements with various suppliers of ground handling and support services” made in the past year. They also report a new CAA
claims portal for customers of failed Atol holders went live last September and is “expected to deliver significant improvements”. The trustees note the CAA’s
“compliance work”, “regular monitoring” and “detailed analysis” of licence-holders’ returns, “supplemented with reports from independent auditors”, remain essential to the financial protection scheme. Aside from the impact of
macroeconomic events on demand, the trustees warn that more frequent and more extreme weather events “will undoubtedly impact the travel industry” and suggest: “Businesses will have to make adjustments and consumer demand may be impacted, [leading to] an impact on APC revenues and the number of insolvencies.”
Heathrow stresses airlines will have to pay planning costs
Progress on developing a third runway at Heathrow will depend on the costs being passed on to airlines, the airport has made clear. Heathrow has already sought
Civil Aviation Authority (CAA) permission to recover £320 million in costs for its planning application this year and next, noting that it is pursuing the application at the government’s invitation.
Chief executive Thomas Woldbye
warned Heathrow “would not be able to make the necessary investments in gaining planning permission to meet the government’s objective” without passing on the costs. British Airways and Virgin
Atlantic have led airline opposition to picking up the costs of a third runway. But the CAA, which sets Heathrow’s charges, noted in a consultation on “recovering early planning costs” launched last month that “proposals for capacity expansion at Heathrow involve very significant capital expenditure”. The CAA concluded: “It is reasonable to expect that any
Thomas Woldbye
approach that we adopt will involve the costs of capacity expansion being recovered through airport charges over time.” The consultation ends on
September 10 and the CAA has promised a decision by the end of the month.
US carrier Spirit Airlines in bankruptcy protection
Ian Taylor
US budget carrier Spirit Airlines entered bankruptcy protection at the end of last week having only emerged from Chapter 11 protection in March. Spirit had emerged from
restructuring claiming it was “a stronger company” and insisting it would “continue to be led by Ted Christie and its existing executive team” only for Christie to resign the following month to be replaced by Dave Davis, who joined from US carrier Sun Country Airlines. Davis said: “Since emerging from
previous restructuring, targeted on reducing Spirit’s debt and raising equity, it has become clear there is much more work to be done. After thoroughly evaluating our options, our board decided a court-supervised process is the best path forward.” He insisted the airline would
62 4 SEPTEMBER 2025
otherwise not survive. Reports suggest the Florida-based carrier plans to rebrand as a premium airline. Spirit has been in difficulty since
Spirit Airlines faces an uncertain future
“double down” on overhauling its network, optimising its fleet and addressing its cost structure. Spirit will also de-list from the New York Stock Exchange, with its shares “expected to have no value”. In an open letter to passengers,
Spirit said flights would operate as normal and it would maintain its existing schedule. However, the carrier announced plans last month to lay off 270 pilots from November 1 and to downgrade another 140 pilots, warning shareholders it might
2022 when it accepted a takeover bid by rival Frontier Airlines but was then subject to a $3.8 billion bid by JetBlue. The Spirit board recommended shareholders accept Frontier’s $2.7 billion offer, noting JetBlue’s counter proposal carried “an unacceptable level” of regulatory risk. But JetBlue put its bid direct to shareholders and won. The carrier entered Chapter 11
bankruptcy protection in November 2022 while awaiting sign-off on the deal, with a stock market valuation of just $118 million and $7 billion in debt despite the $3.8 billion takeover offer. The JetBlue deal would have
created the fifth-largest carrier in the US, but anti-trust lawsuits against the takeover were followed by a federal judge blocking it in January 2024.
travelweekly.co.uk
PICTURE: Noah Daneman
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