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jury is out on whether easyJet survives as a fifth independent carrier or whether Wizz Air replaces it as number five. “We will be the low-cost
European carrier, with IAG, Lufthansa and Air France-KLM. “EasyJet and Wizz can’t
compete with Ryanair on costs. I don’t see Wizz as a lower-cost competitor. Its costs per aircraft have been rising faster than Ryanair’s. Wizz has much higher aircraft costs and higher airport costs than us. “It has an advantage on
labour costs in Eastern Europe but is beginning to understand operating in Western Europe is considerably more difficult. You will not get away with a tax-avoiding scam of employing people in Western Europe through an employment agency in Hungary and then paying them through Switzerland. Wizz will learn, as Ryanair did.” Ryanair confirmed a
multimillion-dollar order for 75 Boeing 737 Max aircraft last week to add to the 135 it already has on order. O’Leary hailed the bigger
version of the aircraft as a “game changer”, saying: “The Max will allow us to fly 4% more passengers [per flight] with 16% less emissions. The Max was certified
to return to service by US authorities last month after being grounded in March 2019 following two fatal crashes in five months, which killed 346 people. O’Leary dismissed concerns
about the safety of the aircraft, saying: “If you want to offload off the Max, you can go on the next available flight. But most people, like me, don’t know what aircraft they’re flying on.”
‘It’s dangerous to place too much hope in vaccine’
Ian Taylor
The industry should not “place too much hope” in the rapid roll out of a Covid-19 vaccine despite the boost the recent vaccination announcements gave to bookings. That is according to Travel Trade
Consultancy director Martin Alcock who said: “My concern at this point is that the scientists hand the [vaccine] baton on to the government.” Alcock told a Barclays travel
industry ‘state of the nation’ webcast: “It’s dangerous to place too much hope in a vaccine. It’s going to be rolled out at an unprecedented pace. But if you look at the difficult logistics, it’s unlikely to be plain sailing. “It’s also going to be complicated
by the anti-vaccine movement.” Alcock questioned whether there
would be “sufficient coverage of the population” to make a difference to travel and whether there will be “some sort of way to prove you had the vaccine”, and argued restrictions are likely to remain. He said: “In the short-term, testing
is more important and more likely to move the dial [on demand]. There are all these organisations announcing their own testing regimes and this idea of mutual recognition, but until there is coordination we’re stuck. “An added danger is that now the
Martin Alcock
government sees a vaccine coming, they may pull back on investing in testing, so we have to keep pushing on that.”
Tui secures €1.8bn to help company ‘bridge the gap‘
Tui has secured additional financial aid of €1.8 billion from the German state development bank and the group’s largest shareholder, adding to the €1.2 billion it secured in August and €1.8 billion in May. The group has received a total
of €4.8 billion in loans and credit facilities. Tui reported it had cash and credit facilities of €2.5 billion available at the end of November.
46 10 DECEMBER 2020 He forecast 2021 would “not
be a normal year”, pointing out: “We’ve witnessed nervous customers deferring travel time and again. One potential scenario is an ultra-late market. Another is people start to book but we have an on/off [resumption]. “Booking patterns will certainly
change. That will have implications for cash flow and be made all the more problematic by weak balance sheets.” Alcock warned: “Business travel is
going to struggle to recover. It’s easy to make a case for corporate travel to be down by a quarter or a third in the long term. That will change the economics [for airlines] and we could see an increase in leisure fares.” He told the webcast: “Cruise will
take longer to bounce back, but there is an upside for cruise. There will be a worldwide reduction in capacity in 2021, overall about a 10% reduction. It will mean cruise lines need agents even more.”
Russian billionaire Alexey
Mordashov will increase his holding in Tui from 25% to 36% as part of the financing deal. In a statement, Tui said it was
“taking further precautions in view of the rising number of infections, strict travel restrictions in many countries and resulting shorter booking times of customers”. The financial package would
“ensure the company can bridge the gap if the pandemic persists in 2021”, it said. It added: “Following the reports
of vaccine successes, Tui expects the pandemic situation to improve in the first half of 2021.”
Fritz Joussen Tui Group chief executive Fritz
Joussen said: “The financial package provides the security to look ahead and to prepare strategically and structurally after the pandemic.” Tui was due to publish full-year
results on Thursday.
travelweekly.co.uk
PICTURE: Steve Dunlop
PICTURE: Philip Gammon
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