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APD rates could divert Level from UK regions

Gary Noakes

NEW LONG-HAUL budget airline brand Level will not fl y from UK regional airports with Air Passenger Duty at current rates, its boss has warned. In a letter to MPs, Willie Walsh, International Airlines Group chief executive, claimed that abolishing APD “would make it more likely” that the airline could operate from Birmingham, Cardiff , Edinburgh and Manchester. IAG is looking to expand Level, which launched fl ights from Barcelona to the US and Latin America last year and will fl y from Paris to the Caribbean and North America from July.

The UK has been mooted as one location, but Walsh claimed: “It’s not fi nancially viable when Level’s fares start around £88 one way and long-haul economy APD is £78.” In addition to £78 added to


Air France-KLM boosts capacity to meet demand

The company is increasing capacity in response to growing demand

AIR FRANCE-KLM Group plans to boost capacity in 2018 to capture “a continued positive trend in demand”. Both mainline brands will add

22 22.02.2018

3-4% to their networks this year, but the group plans to grow its Transavia budget airline by 6-7%. Air France- KLM said initial 2018 sales “show a

and that goes for other long-haul low-cost airlines too.

“By hiking APD in the last Budget, IAG chief executive Willie Walsh

economy fares, passengers pay £156 APD in premium economy and business class. The latter rate will rise another 10% to £172 next year. IAG claims APD “undermines

Britain’s position as a global trading nation post-Brexit”. Walsh added: “British consumers

are losing out because of APD. In Spain and France, Level can off er lower fares than it can in the UK –

it’s clear the chancellor doesn’t understand that Britain is losing out to countries that don’t have draconian aviation taxes. “MPs need to know that APD undermines our ability to introduce new low-cost fl ights that would benefi t their constituents. If APD was axed, IAG could open new routes and operate Level from regional airports,” he said. Level is due to add a third aircraft

to its fl eet later in the summer and will take over IAG’s French carrier OpenSkies slots at Paris Orly airport in July. Walsh has said he wants a Level fl eet of 30 by 2022. So far, IAG’s attempt to capture the long-haul market from the UK regions has been spearheaded through its Aer Lingus brand via connecting fl ights to the US from Dublin and Shannon.

continued positive trend in demand for early 2018”. It said long-haul forward bookings for its fi rst three months were ahead of last year “with a strong March 2018 due to the Easter shift”. The group’s bullish outlook followed the publication of fi nancial results for 2017-18. It made a net loss of €274 million, but this included a one-off hit from a “de-recognition” of two KLM pension plans that cost €1.43 billion. Excluding this, the group made a net profi t of €1.15 billion, an increase of €363 million. Individually, Air France made pre-tax earnings of €1.76 billion, up 247%; while KLM made €1.47 billion, up 307%. Group passenger numbers reached 99 million, up 5.6%. Transavia contributed 14.8 million of these and made an operating profi t of €81 million, up 81% compared with breaking even in 2016.

Edward Robertson editor, Routes News 020 3714 4116 NEW CHINA DESTINATION

Heathrow adds route to Wuhan

HEATHROW IS to gain another destination in China this summer when fl ights to Wuhan begin. China Southern will start three

fl ights a week to the city from May 30. Wuhan is about 300km to the west of Shanghai and Hangzhou and straddles the Yangtze River, making it a regular stop for river cruises. It is the capital of the Hubei province with a population of around 11 million and was briefl y the country’s capital in the 1920s.

China Southern will fl y to Wuhan on Monday, Wednesday and Friday, departing Heathrow at 22.10 and arriving the next day at 15.35. Flights will be on an Airbus A330-200, with departures from China at 14.25, arriving at 18.45 the same day. China Southern is a Skyteam member with its major hub in Guangzhou, the commercial city it also serves from Heathrow. Wuhan will be Heathrow’s sixth China destination. The airport also off ers Beijing, Hong Kong, Shanghai and Qingdao.

The year saw the December 1 launch of Joon, Air France’s airline brand aimed at younger travellers who prefer budget carriers, which serves both short and long-haul destinations. Last July saw Air France-KLM

take a 31% stake in Virgin Atlantic for £220 million. Another landmark event came in November, when a debt restructuring at Kenya Airways saw the group’s equity in the carrier reduced from 26.73% to 7.76%, meaning it lost its ability “to exercise a signifi cant infl uence”. Group chief executive Jean-Marc Janaillac said: “Air France-KLM closed 2017 with strong results boosted by a positive business environment… the group confi rmed its leadership position in Europe in traffi c terms while reporting an operating income increase of 42% and signifi cantly improving its fi nancial profi le.”

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