BUSINESS NEWS


Deloitte forecasts long-term impact on business travel


The travel industry will bounce back from the Covid-19 crisis but must be prepared for significant long-term impacts, Deloitte has warned. Alistair Pritchard, lead partner


for travel and aviation at business services giant Deloitte UK, said the industry is at a “critical juncture” and needs government support, with short-term management of cash vital. Pritchard suggested the sector


could emerge when the virus is under control with reduced business travel, consumers concerned about overseas travel and the cruise sector facing a challenge due to the media focus during the initial outbreak. Speaking in a webcast last week,


he forecast: “Some business travel will be lost completely, some will


Alistair Pritchard


be delayed. The question is how much will come back. This period of isolation and working from home is likely to have impacts. “No doubt everyone will become


more savvy making use of virtual- meeting technology and this may drive use of such technologies. Combined with corporate travel polices that increasingly focus on the climate agenda, business travel may not recover to the pre-Covid-19 level. “In leisure travel, there will be


pent-up demand, particularly in light of enforced social distancing.”


Guevara urges governments to aid sector with loans and tax breaks


Up to a million travel and tourism jobs a day are being lost due to the coronavirus, according to the World Travel & Tourism Council. The global industry association


warned the job losses affect every level of the industry, with up to 50 million jobs at immediate risk and 320 million affected by the dramatic loss of business. The WTTC reported it is in


talks with 75-plus governments and urging intervention through loans and tax breaks. President and chief executive


Gloria Guevara said: “While the priority for governments is to keep people safe, this global health catastrophe [is] plunging millions of families into hardship and debt. The domino effect of Covid-19 is


Gloria Guevara


wiping out an entire sector. “This situation will only


deteriorate unless more action is taken immediately by governments. The majority of businesses have no idea how to access potentially life-saving loans and tax breaks.” The WTTC is urging


governments to protect salaries and jobs, extend unlimited interest-free loans, and waive or remove all dues, taxes or fiscal charges for 12 months.


Cook drained ATT fund of £481m £156m


Ian Taylor


The collapse of Thomas Cook in September cost the Air Travel Trust (ATT) fund £481 million, leaving “very little resources” to cover another failure. The figure is in addition to a


minimum £156 million bill for taxpayers after the government intervened to order a repatriation of all 150,000 Cook customers overseas, not just those covered by Atol. The costs of the failure were


revealed in a report by the National Audit Office (NAO), published on March 19 and based on CAA figures which estimated the ATT exposure for repatriation and refunds at £481 million. The NAO scrutinises government spending on behalf of Parliament.


travelweekly.co.uk


Cost to taxpayer of Cook failure on top of the call on ATT


It revealed the Department for Transport would pay an estimated £83 million towards the cost of repatriation, although the final cost may not be known for some time. This figure includes the cost


of keeping parts of Thomas Cook running to assist with repatriation. The government also paid out


£58 million in redundancy and related payments to former Cook employees and £15 million in liquidation costs. The NAO noted that should another Atol-holder fail and the


costs can’t be met by the ATT, “the government has agreed to stand behind the ATT fund”. It reported: “The final cost to


government of the repatriation may not be known for some time as the CAA will continue to receive invoices for leasing planes, ground handling charges and other services.” The NAO also noted: “At the


time of its collapse, Thomas Cook was managing many personal injury claims. Thomas Cook had not insured itself for these and it is unlikely the sale of assets will raise enough to cover the cost of these claims.” Diana Holland, assistant general


secretary of the Unite union, said: “If the airline had been supported even for a short time, there would have been no need for a highly costly repatriation.”


The final cost of


repatriating Cook clients will not be known for some time


26 MARCH 2020 39


PICTURES: Phil Gammon; Shutterstock


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