Abta Travel Finance Conference 2024: Financial protection Continued from page 48


operating profit, almost half the IAG airlines’ total, with leisure travel “the strongest driver of demand across all cabins”. Yet just 59.7% of BA flights operated on time compared with almost 89% of Iberia’s. The poor on-time


performance and resulting passenger frustration is the core issue facing BA. Doyle suggested BA’s


operational performance had seen “a significant turnaround” since the end of the year, noting 80% of departures from Heathrow were on time in January. He told Travel Weekly: “The


environment in London is one of the most challenging. A lot of the improvement is due to improvements we’re making – to better management of things we can control.” Doyle noted: “We’ve invested


in IT and in resource and had an internal ‘Don’t waste a second’ campaign. We’re resolving problems more quickly, and we’re trying to resolve issues affecting passengers in the air before they land.” Chief commercial officer


Colm Lacey highlighted the investment in ba.com, noting parts of the website were 24 years old, and said the new site now in trials “is all about personalisation and serviceability” and “will be a game changer”. When a flight is cancelled,


he said: “We want the ability for customers not just to rebook with us but to book with other airlines. We also want to be able to text hotel vouchers to passengers.” Lacey said these features would be available “in the second half of this year”.


Economist claims ‘overall picture on inflation positive’


Diminishing concerns about high energy prices mean inflation should continue falling and the Bank of England start cutting interest rates by late summer. That is according to KPMG


chief economist Yael Selfin who told the Abta conference: “High inflation is behind us and UK interest rates have probably peaked. We expect inflation to go back to


2%. Energy prices were a driver of inflation and are much lower in comparison to last year.” She argued: “We’re a little more


cautious on rates – the Bank of England (BoE) may wait till August to start cutting rates. If you want to be cautious, plan for August.” Selfin suggested: “We could


see quarter-point cuts [in rates] to 3% next year, but rates will not go lower than that. The BoE will keep them at about 3% which it sees as a ‘neutral’ rate. She noted: “2023 was not as bad


as feared. There was a relatively mild contraction [in the second half of last year].


Yael Selfin “The forecast now is for energy


prices to remain relatively low. There is an uptick in shipping costs and some concern about supply chains but no way as high as during the pandemic. The overall picture on inflation is positive.”


Travel spend last year up 15% on 2019 – Barclays


Barclaycard data shows travel defied a general slowdown in spending at the end of last year and the growth in spending with travel agents outpaced that on hotels, resorts and accommodation in January and February. Jamie Evans, Barclays Payments


director for travel, hospitality and leisure, reported spending on all categories of travel was up 15% last year on 2019, behind the 21% growth in other ‘non-essential’ spending, but “travel spending held firm” in November and December when expenditure in other sectors slowed. Evans said the figures “suggest


customers are making cuts in spending but protecting travel spend”. Separate Barclays card data for


February, released on Tuesday, showed spending with travel agents up 10% year on year in February following 8% growth in January, well above the 1.9% increase in all card spending. By contrast, UK hotels


46 7 MARCH 2024


“That could be because the cost of flights was extortionate.” The split between credit and


debit card spending on travel was roughly 50:50, with Evans noting: “Spending on credit cards in other sectors is around 25%-30% [of the total]. So, the availability of credit is essential to travel.” He also noted the growth in


and resorts saw just 0.3% growth. Evans reported 55.1% of


Barclaycard customers spent on travel in 2023, “an all-time high”, up from 54.8% in 2019 and 54.3% in 2018, with the average spend per customer up 15.8% on 2019 at £1,331. Almost 65% of UK consumer


spending abroad last year was in Europe, up from 62% in 2019, with spending in the Americas down from 15.5% in 2019 to 12.8% last year. Evans suggested:


spending varied substantially by age, with younger adults aged 16-24 spending just 2.5% more last year than in 2019 compared with 15% among those aged 25-49 and 16% among 50-64-year-olds.” The regional data was also


revealing, with travel spending in London rising less than 5% between 2019 and 2023 compared with 14% in eastern England, 15% in the southeast and West Midlands, 16% in the northwest, 18% in the southwest and 19% in Yorkshire. The Barclays data draws on the use of 17 million debit and credit cards.


travelweekly.co.uk


PICTURE: Shutterstock/Rusty Goldfish


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