Tudor Court Hotel News Section

The heads of British Airways (BA) and Spanish carrier Iberia inked an accord for a union and to lay the base for a joint venture, the International Airlines Group (IAG). Both BA and Iberia will continue to operate independently, even after the union.

Willie Walsh, BA chief executive will be the chief executive of IAG, while his equal at Iberia, Antonio Vazquez will be the chairman. Listed both on the London and Madrid stock exchanges, shareholders of BA will have 56% stake in the IAG while those of Iberia will have 44%.

The merger is expected to raise a combined cost savings of around £350 million in five years, a significant number considering that both parties involved in the merger are presently running at a loss. In accordance with the deal, Madrid’s Barajas airport will host BA flights to key regions, while Heathrow will serve the same purpose for Iberia’s flights.

The deal is expected to be completed in December, once BA wins acceptance for its plans to deal with a crisis relating to a £3.7 billion pension deficit.

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The International Air Transport Association (IATA) has reported a 5.9% rise in premium class travellers and 6.9% rise in economy class travellers in February 2010, against the same period last year.

Announcing that longer haul markets had recorded a faster revival than short haul markets, IATA stated that the comparative numbers for traveller volumes pointed to a “strong upturn”.

While the premium travel levels had not hit the early 2008 figures, it was now 10% above the slump experienced in 2009. The IATA added that this increase in premium travel had belied fears that the sagging fortunes of the industry were irreparable. According to the association, the premium travel industry is at present heading towards the upward crest that marked the early days of 2008.

Statistically speaking, premium travel volumes shrunk by 3.7% within Europe. However, the numbers saw an upsurge on the North Atlantic, Europe to the Middle East and Europe to the Far East routes, where the industry witnessed growth levels of 4.2%, 11.6% and 3.6% respectively.

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British Airways has confirmed that cabin crew strikers will be stripped off their staff travel benefits. All workers who had participated in the three-day strike will not be entitled for free and discounted flights.

Explaining their decision, BA said that its cabin crew was first informed that they would be losing their benefits in the event of partaking in the strike, in January, before Unite’s strike polls had commenced. The point was then restated after the poll outcomes and before the first strikes.

BA added that the travel benefits were non-contractual in nature, and hence liable to be withdrawn by the airlines at its own judgment.

BA’s decision has met with strong criticism from the cabin crew union Unite, which stated that many of the airline’s staff banked on the travel aid to reach work after BA had closed down its regional bases. The union said that the move highlighted the condescending attitude that BA harboured for its employees, and added that it will challenge the decision in the most fitting manner.

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The 2007 accord between the US and EU will be set to stone, with the concerned parties finalising a deal allowing airlines to fly between any EU and US city. However, the issue of airline ownership stands unresolved.

Giovanni Bisignani, Director General and CEO of IATA (International Air Transport Association), however, expressed disappointment over the issue of ownership being left unsettled. He urged both the governments to assign the subject on high priority, as it was highly consequential to the long-term financial stability of the airline industry.

Members of the International Air Carrier Association (IACA) too communicated their dissatisfaction over the incapability of the deal to strike a balanced note for all airlines.

Sylviane Lust, IACA’s Director General, said the deal was biased, as it was heavily tilted in favour of US airlines. She added that the agreement did not offer anything significant for European carriers. It did not bring the airlines closer to flying freedom. She called for proactive efforts from both sides, in line with the assurances made at the start of EU-US aviation talks in 2003.

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“In tatters” was how disapprovers of the third Heathrow runway described the expansion plans after they won a High Court battle with the government.

The list of protestors comprised local councils, residents and green groups, who claimed that public consent on the expansion was not sought for in a fair manner and that the expansion could threaten UK’s climate change targets.

In his ruling, Lord Justice Carnwatch stated that the runway approval released by the government would have to be reassessed by whoever comes into power after the elections in May.

Defending the government’s decision, Transport Secretary Lord Adonis argued that the government had approved the expansion plans only after a detailed evaluation that showed that the plans conformed to the stringent environmental regulations.

The protesting team has issued a joint statement advising the government to re-examine the whole project. It urged the government to approach the entire runway expansion plan by hinging on a fresh perspective.

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With the intention of actualising their planned joint venture on Transatlantic routes, Oneworld alliance members British Airways (BA), American Airlines (AA) and Iberia will make available four daily pairs of slots at Heathrow to non-Oneworld alliance members.

Heathrow or Gatwick to Boston, Heathrow or Gatwick to Dallas Fort Worth, and Heathrow or Gatwick to Miami, are the routes on which slots will be made available on lease. BA expects Heathrow or Gatwick to New York slots to also become available in the future.

The joint venture, approved by the European Commission (EC), is applicable to flights operating between North America and Europe, and is based on a revenue sharing model.

British Airways CEO, Willie Walsh stated that the leased slots will work to the advantage of the customers, shareholders and employees. He expects that the move will up the competitiveness of Oneworld.

President of competitor airline Virgin Atlantic, Sir Richard Branson, however, termed the move monopolistic and incapable of imparting any real consumer value.

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Holiday plans of thousands of travellers are likely to be disrupted owing to the national rail strikes over the Easter weekend.

Superbreak Sales Director, Ian Mounser believes that the strike, called on by maintenance workers, supervisors and signallers, is bound to sabotage the domestic breaks and that the timeline of the strikes can potentially impact 10,000 train commuters who travel to London.

The strikes could also affect last minute reservations, which contribute in a big way to the business of ticket bookings, as potential travellers may be prompted to cancel their trips or head off to a nearby destination. The impact on those who have already booked will be assessed and solutions will be arrived at separately, based on the traveller’s choice Mounser said.

Negotiations between union leaders and senior Network Rail management over plans to strip off 1,500 maintenance jobs and safety apprehensions over restructuring are due to happen this week. If the talks fail and the strike goes ahead as planned, it would be the first rail strike in 16 years.

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Spanair will commence operations of scheduled flights from Birmingham to Barcelona and Madrid in May this year. Services to Madrid will start on May 21 with flights scheduled on Tuesday, Thursday and Saturday, while those to Barcelona are due to begin on May 20, with take-offs on Monday, Tuesday, Thursday and Friday.

Spanair will use 168-seat Airbus A320s fitted with economy and business class cabins to complete the journeys.

With Bmibaby due to stop its Birmingham-Barcelona service on June 7, Spanair hopes that these scheduled services will plug in for the gap that will ensue. Spanair has prior experience in operating charter flights from Birmingham.

Paul Kehoe, Birmingham’s Airport Chief Executive, stated that the airport will offer the only direct Madrid flight south of Liverpool and north of the Watford Gap. He expressed satisfaction over making travel to Barcelona possible even after Bmibaby ceases operations in June.

Mike Szucs, Spanair chief executive, added that onward connections will be made available from Madrid and Barcelona to the carrier’s scheduled network across Spain, the Canaries, the Balearics and North Africa.

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The Civil Aviation Authority (CAA) has reported that in 2009, airports in Britain serviced 17 mn travellers less than the number serviced in 2008. This steep decline, the biggest in 65 years, marked the first instance of the numbers dipping two years in succession.

Harry Bush, Director of Economic Regulation, CAA, stated that the latest figures mirror the downturn that has affected the aviation industry. During 2009, the total air transport movements at UK airports contracted by 8.8%. The slide represents the biggest drop in traveller volumes since the Second World War.

Towards the end of 2009, the pace of decline had slowed down from 12.5% in the year’s first quarter to 3.8% in the fourth.

According to CAA, regional airports, with a 10.7% drop in the number of travellers, were worse hit than London, where the fall in traffic was 4.9%.

Bush reiterated that the traveller numbers was expected to bounce back, but the rate of revival seemed vague. It could take years for the industry to regain its lost glory.

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Travelocity’s latest Travel Confidence Report, which pits travellers’ present travel plans and inclinations against the trend that existed six months and a year back, bring to light a striking rise in traveller enthusiasm.

The report suggests that 49% travellers intend to ‘travel more’ in 2010 as compared to 21% six months back and 10% in 2009. The number of travellers planning to reduce their travel volumes was down to 7%. Around 44% travellers were content with their travel volumes and wished not to change it in 2010.

Reduced hotel charges also seem to have affected travel plans positively. Eighteen percent of the respondents opined that they would stretch their holidays, 30% expressed a desire to take an unplanned trip and 33% revealed their intentions of staying at a plush star-rated hotel.

Around 56% of the respondents divulged that they did not have on hand a prefixed travel budget for the year. Of these, around 34% were keen on boosting their travel budget. Around 76% hinted that they might book a vacation package, as it was more economical.

The findings were based on a survey of over 2,000 North Americans.

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