Continued from page 48
which noted: “We consider it entirely inappropriate that between 2000 and 2004, receipts from APD should have fallen 8% while passenger numbers have risen 35%.” APD remained frozen until
December 2006 when Labour chancellor Gordon Brown announced a doubling of rates (from February 2007) to address a shortfall in government finances. Brown noted aviation fuel remained untaxed and argued: “It still means air travel is taxed less than cars by a very substantial amount.” The industry responded
furiously and Abta subsequently launched an industry-wide Fair Tax on Flying campaign. But at the time, aviation analyst Chris Tarry suggested the increase “will have no impact on short- haul travel and people will not notice the increase for long-haul”. Subsequent changes
in response to industry campaigning saw APD band rates changed from 2015 – removing an anomaly which placed the Caribbean in a higher band than the US West Coast – and APD on passengers under 16 scrapped. A further revision from
April last year halved the rate on domestic services – to remove the ‘double charge’ on return flights – and created two ‘long-haul’ rates, for flights up to 5,500 miles (band B) and beyond (band C). Justifying the tax, then
exchequer secretary Kemi Badenoch noted short-haul rates “remain frozen in nominal terms for the 10th year in a row” and told MPs: “Aviation fuel incurs no duty and tickets are VAT-free. APD ensures the aviation sector makes a fair contribution to the public finances.”
American’s latest move inflames row with Asta
Ian Taylor
The bitter dispute between the US travel agents’ association Asta and British Airways’ US partner American Airlines has ratcheted up to a new level after the carrier announced last month it would stop awarding loyalty points and air miles to customers booking though ‘non- preferred’ agencies from May 1. The battle over American’s
imposition of New Distribution Capability (NDC) technology began last April when the carrier withdrew more than 40% of its fares from GDSs and left full content available only via NDC channels. Asta accused American of “a
clear abuse of market power to force change that no one, including American Airlines, is ready for” and filed a complaint with the US Department of Transportation in July. In a message to members in late February, Asta president and chief
to qualify for air miles and loyalty points, and the threshold “will increase to 50% by October 31”. He warned: “Many travellers,
American Airlines
executive Zane Kerby denounced American’s latest move to deny loyalty points to customers of travel companies not using NDC channels as “doubling down” on the carrier’s “clear disregard for travel agencies”. NDC is a technology standard
developed by Iata to distribute airline fares and ancillary content to intermediaries via online APIs (application programme interfaces). Kerby noted agencies “must not only implement NDC, but also sell 30% of American tickets via an NDC channel by April 21”
business and leisure, will no longer earn miles and AA loyalty points because the agencies through which they book cannot meet the unreasonable NDC adoption threshold AA has established and still support the traveller.” Kerby said: “Problems associated
with basic servicing functions – such as comparative shopping, split tickets, limitations on cancellations, booking multiple people on the same itinerary, and rebooking – remain nearly a year after [American’s] self-imposed NDC launch date, creating extraordinary challenges for agencies and their travellers.” He said it’s “yet another manoeuvre
to force NDC on to an industry that is not ready” and added: “We have yet to see a reasonably functioning [NDC] product in the market.”
JetBlue pulls Spirit deal after ruling by federal judge
JetBlue Airways terminated its proposed $3.8 billion takeover of US low-cost carrier Spirit Airlines last week after a federal judge blocked the deal in January. The US Department of Justice,
District of Columbia and states of New York and Massachusetts filed an antitrust lawsuit to halt the takeover on competition
46 14 MARCH 2024
grounds in March last year. They argued the deal, signed in July 2022, would combine “two fierce head-to-head competitors” and was “presumptively illegal”. Robin Hayes, JetBlue chief
executive at the time, argued the takeover would create a rival to the big-four US carriers – American Airlines, United, Delta Air Lines and Southwest. But new JetBlue chief
executive Joanna Geraghty, who replaced Hayes in February, said: “Both airlines’ interests are better served by moving forward independently, given the
hurdles to closing [the deal].” Spirit chief executive Ted
Christie noted “regulatory obstacles will not permit us to close this transaction in a timely fashion”. JetBlue will pay Spirit
$69 million to terminate the deal.
travelweekly.co.uk
PICTURE: Shutterstock/Coby Wayne
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