ON THE SOAPBOX: Mike Carrivick - Chief Executive of BAR UK

Mike Carrivick is Chief Executive of the Board of Airline Representatives in the UK (BAR UK).  Mike is a total airline man having started his career at BEA in 1965, spent 20 years with Qantas followed by a short interlude with Brymon Airways, then Maersk DFDS Travel and finally IATA before his appointment as Chief Executive of BAR UK in 2004.  In this role he represents the interests of all scheduled airlines flying in and out of the UK and their dealings with the Government and Opposition in aero-political matters.

The 2011 Budget – And yet another consultation

It is perhaps indicative of the state of things when the best we can hope for as an industry is ‘no change’ in the Budget.

Representing 86 airlines, the Board of Airline Representatives in the UK (BAR UK) has been at the forefront in lobbying Government to make the right aviation policy decisions.  Despite endless feedback from industry leaders and experts over many years, and even a costly but ultimately ill-fated Government ‘white paper’ on aviation, we now head into yet another consultation which delays the introduction of the visionary policy the country needs.

Aviation tax, or Air Passenger Duty (APD) as the Government prefers to call it, is one of many in a long line of policy issues which continue to impact upon our industry.  If APD policy was to be judged in school report style, it would definitely be a case of ‘must try harder!’

Let’s start with the positive part this year.

The industry should take some delight and comfort from the fact that, collectively, it worked together, through the ‘a fair tax on flying’ campaign www.facebook.com/afairtaxonflying and got a great result: APD rates are frozen until 2012.  In today’s fragile marketplace, that’s a win!

From a BAR UK perspective, the other positive outcomes were the Government’s acknowledgement that Per Plane Tax proposals are recognised as unworkable and that international transfer passengers would not be charged APD.

The new consultation on APD announced by the Treasury includes proposals to levy tax on passengers in private jets, examine options to re-align the current banding system, and reconsider the rate for Premium Economy Class.  The consultation closes on 17 June.

However, looking to the future, the Chancellor is determined to bash the industry even more.

For example, the ‘freeze’ is not all that it appears to be.  The Budget document states ‘The Government will also freeze Air Passenger Duty rates for 2011-12, with the RPI increase assumed in the forecast deferred to April 2012.’

What’s being said, in other words, is what you get away with this year (despite no increase ever having been announced) we’ll get back from you next year.

Furthermore, to add to the pain, the Treasury is seeking to almost double its revenues from APD, from £1.9bn received in 2009/10 to a massive £3.6bn in 2015/16.

These exorbitant increases further threaten the industry, will add substantially to the costs of holidays for the public, and continue to affect the economies of several overseas nations that rely on British tourism.  They also continue to conflict with the Government’s own objectives of economic growth and increased numbers of international visitors.

Consequently, the entire industry must continue its pressure on the Government to finally get it right, not regard aviation as a cash cow, and to create the correct environment for aviation that will allow UK industry to remain internationally competitive and prosper.

The campaign’s objectives are clear, and contain five tests that have to be assessed.  They can be summarised as follows:

Aviation taxation must

• not increase the overall amount travellers pay to leave the UK
• recognise that APD revenues must be offset by the income generated from aviation’s inclusion in the European Union Emissions Trading Scheme (ETS), from January 2012
• apply the lower rate of APD for travellers in Premium Economy
• eradicate the unfairness to some countries of the current banding system
• ensure that APD does not adversely impact on destinations, trade and tourism

The baseline is that the UK still levies the highest aviation taxes anywhere in the EU, and the revenues raised already outstrip the industry’s costs of emissions.

No tax has the right to decimate an industry, which the current aviation tax threatens to do.

Even before the Budget 2012 is published, Treasury intends to impose two compounded inflationary increases to all APD rates.  Athletes and visitors to London 2012 will find it even more expensive to visit this country.  We don't want to deter them from coming, and we want them to return in the future.

Let’s be clear that aviation is not going to stand idly back and watch its work be slowly eroded by economic policies.  It will continue to lobby Government as long as necessary. 

Mike Carrivick

www.eraa.org

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Aviation scoping document published

Britain’s Coalition Government has published its scoping document “Developing a sustainable framework for UK aviation”.  It is a 42-page manuscript that leads off with Transport Secretary Philip Hammond stating “It would be wrong to suggest that the Government holds all the answers.  That is why this document asks a wide range of interested parties for their views on the key questions we face.  Clearly we won't agree on everything, but by working closely with key stakeholders at this early stage, we can provide a policy framework for aviation which strikes a balance between different interests."  This follows quick decisions to cancel Heathrow’s third runway and not to support expansion at Gatwick and Stansted.  Mr Hammond acknowledges aviation’s significant contribution to the country’s economic health.

Comment time has been further extended until 30 September 2011, critics noting that no definitive Government policy on air transport is likely to be published until spring 2012.

The Scoping Document itself is a well laid out paper setting out the essence of civil aviation in the United Kingdom.  It asks a great many questions and expects interested parties to respond.  The consultation will replace the previous Government 2003 White Paper, The Future of Air Transport. www.dft.gov.uk

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British Airways minority air crew vote for strike

Unite Union has announced that some 5,811 cabin crew members have voted in favour of strikes in the coming weeks at British Airways’ Heathrow hub.  The union must announce the strikes within the next 28 days and then give seven days’ notice of implementation.  BA has in total just under 13,000 in-flight staff, the number in favour of industrial action around 45% of the total. 

"We urge BA's boardroom to see this as a clear message that they must think again about how to regain the trust and confidence of a significant part of their cabin crew operation," Len McCluskey, Unite's General Secretary said in a statement.

"We continue to be in discussions with the company to find a solution to this long-running dispute."

The quarrel began in November 2009.  If the strike takes place both Gatwick and London City are expected to operate as normal. www.unitetheunion.com www.ba.com

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Japan gets the "All Clear"

IATA has published confirmation from six United Nations (UN) agencies monitoring Japan’s damaged Fukushima Daiichi nuclear plant that there is no health or transportation safety hazard.  The UN statement also confirmed that screening for radiation of passengers arriving from Japan is currently considered unnecessary at airports or seaports around the world.

The joint statement was prepared by the World Health Organization, the International Atomic Energy Agency, the World Meteorological Organization, the International Maritime Organization, the International Civil Aviation Organization and the World Tourism Organization.

According to the UN statement, continuous monitoring around Japan’s airports confirms that radiation levels are well within safe limits from a health perspective.  For updates, travellers visiting Japan by air are advised to consult a dedicated website established by the Japanese Civil Aviation Bureau. www.mlit.go.jp/koku/flyjapan_en

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More flights in April says OAG

OAG (Official Airline Guide) has published its schedules database for April indicating that airlines worldwide will operate 3% more flights in April 2011 as compared to April 2010.  The total number of flights operating in April 2011 is 2,523,350 with an overall seat offering of 317,376,168, an increase of 5% as compared to April 2010.  The trend is for more efficiency with less services and more seats.

The amount of flights on offer is as good an indication as any of the state of economy.  Traffic within North America reflects an increase of 2% in both frequencies and offered seats.  In Europe the numbers are very flat, only increasing by 0.3% and 2% respectively but again indicating the airlines are using larger aircraft.

Air services in Asia continue to grow much faster than elsewhere resulting in an increase of 7% in both flight operations and seat offerings.  Only in South America are the signs discouraging with very slightly less sectors and actual seat offerings factionary up. www.oag.com

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Southwest grounds Dash 300 series 737

Following a major scare, America’s Southwest Airlines has grounded around 80 Boeing 737-300s from its total fleet of around 550 737 series aircraft.

On Friday (1 April) a Southwest jet en route from Phoenix to Sacramento, flying at 35,000ft and carrying 118 people, lost a roof panel and with it cabin pressure.  Wearing oxygen masks the pilots made a fast but controlled descent landing safely near Yuma, Arizona.  Passengers recalled tense minutes when they saw the sky above and fumbled frantically for breathing equipment whilst the aircraft descended.  There were no injuries with the exception of one of the cabin staff who suffered minor wounds.

Investigators have ruled out terrorism, but so far have not been able to establish the cause of the rupture. www.southwest.com

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Thames summer river programme

City Cruises will be offering what is essentially a sightseeing service between the four major destination piers on the River Thames (Westminster, London Eye, Tower and Greenwich) daily this summer.

This is not to be confused with Thames Clippers who run what is effectively a water bus service from Embankment to North Greenwich with extensions up river to Milbank and down river to Royal Arsenal Woolwich.  These boats operate every 20mins and are much used by regular commuters.

From 18 April 2011 the frequency of the service will increase with cruises operating every 30mins, offering passengers more choice.  The service will also start earlier and finish later in the day.  The London Showboat, an unforgettable evening of top quality entertainment and superb food will operate from Thursday through to Sunday.  Boarding is at Westminster Pier at 19:15, returning at 23:00. www.thamesclippers.com

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ON TOUR: ITB shows optimism, positivity and an electronic future for travel

Jane Stanbury of Emerald Media reports for AERBT

More than 170,000 visitors, 11,000 exhibitors, and over 7,000 journalists attended in record numbers this year’s international travel show, the 45th ITB in Berlin.  At what is arguably one of the largest international travel exhibitions there was a positive buzz in the 26 show halls as delegates and exhibitors from over 188 countries demonstrated an optimism not seen for a number of years. 

Organisers of the conference bore out the buoyant atmosphere reporting deals worth over €6bn had been conducted over the six-day gathering.  The United Nations World Tourism Organisation (UNWTO) re-enforced the positive outlook predicting an increase in international tourist arrivals of between 4% and 5%, although the recent political unrest and the natural disasters are expected to affect short term predictions.

Whilst ITB is predominantly a German show, visited by thousands of business and public delegates alike, this year saw 40% of the attendees coming from overseas, the highest ever number.  The vast halls were filled with a mix of businesses from destination representation companies through to the national airlines and everything else in-between along the value chain.

New highlights at this year’s show included the introduction of three days of electronic media seminars which attracted thousands of delegates who listened and debated the subject of how Web 2.0 would affect the industry.  Debate from companies such as Vodafone, Voyavo from the USA, TouristMobile, Clanmo and mvolution, centred around the efficacy of mobile solutions and if apps are really going to change the way people research and book travel.  Social media was also a key topic, and undoubtedly the social networks were deemed to be essential marketing platforms and increasingly influential in the purchasing decision.

Along with the ever popular destinations of France, Italy and Spain which were all seeing increased demand from the German market again, the central and Eastern European halls were teeming with visitors.  Patrick Bohl, Head of Airline Strategy and Development for Budapest Airport, the region’s central hub for aviation travel commented: “We’ve had a very good exhibition, lots of new contacts have been made.  This is a great conference as business gets done, and the networking opportunities enable you to pick up news and information you’d miss out on sitting in your office.”  Budapest Airport was promoting their newly opened SKYCOURT terminal that will double the capacity for passengers travelling through the airport.

Airlines in general were upbeat.  Emirates demonstrated their new Airbus A380 product which enabled visitors to experience the on-board lounge and view the spa shower which was greeted with a positive response.  Air Berlin. explained their network expansion which is developing through  partnerships with airlines such as Finnair, American Airlines and S7.  Joachim Hunold, CEO Airberlin, said the announcements “were all met with a good response and are evidence of our efforts to continue to expand this business sector.” Air Berlin also announced their aim of making flights more environmentally friendly in 2011 by reducing fuel consumption to a record low of 3.5 litres/100 passenger kilometres.

Qatar Airways, which recently launched a Budapest to Doha service, were also upbeat about their expansion plans for the future.  Chief Executive Officer of Qatar Airways, Akbar Al Baker, confirmed the Middle Eastern airline’s commitment to route expansion and fleet growth saying: “We are targeting 120 destinations within the next three years, and will have 120 aircraft by 2013.”  The aggressive route expansion will see the airline’s 100th destination added in April when flights commence from Doha to Shiraz (Iran). Hot on the heels follow Venice and Montreal, the airline’s first Canadian destination. 

Further east the troubled countries of North Africa maximised their attendance by convincing delegates that they were open again for business. Egypt launched a new ad campaign arguing that change in political process makes the destination an even more attractive place.  It was also confirmed they would be the partner country for ITB 2012, taking the place of Poland who at this year’s show demonstrated their diverse offering of cultural and natural treasures as well as showing off their venues for the upcoming Euro 2012 championship.  The former President of the Republic of Poland, Lech Walesa, was a popular visitor to their stand.

However one of the quietest booths in the halls was that of Libya where there was a much reduced team on hand to deliver the message that Libya is a fascinating place.  “The pictures we have here do not do our country justice,” said one of the team.  “We know that when tourists arrive their expectations are exceeded, we really do have the wow factor which is important for future tourism.”  The team were stoic about their current situation arguing that they know the problems will end and perhaps then there will be even more opportunity to put Libya on the tourism trail.  “We are doing OK at the moment because whilst the oil workers have moved out the hotels are busy catering for media,” they commented optimistically.  The presence of Iraq, exhibiting for the first time since 1966, was noteworthy and other welcome return exhibitors included São Tomé & Príncipe, Sierra Leone and the Democratic Republic of the Congo, last seen at ITB in 1993.  Whether this indicates an increased tolerance from the travel world, or the genuine desire for the new regimes to promote tourism, remains to be seen.  The Japanese earthquake and tsunami clouded the mood and unsurprisingly the Japan stand was closed from the midday on the Saturday of the show for their national day of mourning. 

International politics were strongly represented with national delegations from 94 countries attending.  Political presence was probably best demonstrated by the holding of the first ever “UNWTO Silk Road Ministers’ Summit” which focused on development of the ancient trade route.  Kazakhstan’s national carrier Air Astana, along with other central Asian countries is actively seeking ways of providing access to start points along the route.

For the German market 2011 onwards looks like seeing an upturn in outbound tourism.  What is not so certain is how political strife, natural disasters and changing socio-economic situations will affect the rest of the world’s travelling patterns.  ITB 2012, which takes place between 7-12 March, will no doubt have much to review, and to look forward to. http://www1.messe-berlin.de/vip8_1/website/Internet/Internet/www.itb-berlin/englisch/index.html

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