IN BRIEF: November 2019 issue
TEMPO collapse reverberates
The most recent report from the administrators of the collapsed Tempo Holidays Pty Limited confirms expectations that unsecured creditors are unlikely to see anything from the company’s administration. The document details the steady decline of Tempo Holidays and Bentours over the three months prior to their collapse, as cash flow from customer payments dried up during a traditionally slow time of the year and was unable to be topped up from the global treasury operations of its parent firm, Cox & Kings because of a “standstill agreement” with its bankers.
Interestingly, administrator Laurence Fitzgerald suggests the company had been trading while insolvent for some months, with the situation a stark contrast to repeated assurances from local management that Tempo Holidays and Bentours were unaffected by the financial issues at their India-based parent company.
As this issue of travelBulletin goes to print there are moves afoot to sell parts of the business, with Fitzgerald confirming exclusive due diligence with one preferred bidder after receiving 21 expressions of interest. Several players are also moving swiftly to fill the gap left by Bentours’ demise, including 50 Degrees North which has launched a new NORD Journeys brand, and Adventure World Travel which has announced a new partnership with key supplier Hurtigruten Cruises as well as the development of a dedicated Scandinavia program.
HLO buys TravelEdge
Helloworld is expecting to boost its annual TTV by more than $300 million through the acquisition of CT Partners member TravelEdge. HLO paid $28 million for the business, described as “one of Australia’s largest privately owned corporate agencies”. The operation will continue to be run from its Sydney office by CEO Kim Wethmar, while TravelEdge cofounder Grant Wilson will relinquish his position on the AFTA Board after also stepping down as Chair of CT Partners — a role held since 2007.
Helloworld CEO Andrew Burnes said the acquisition would boost corporate TTV to more than $2.4 billion, taking into account wholly owned operations and business network members in Australia and New Zealand.
Meanwhile CT Partners said it was “business as usual” despite the departure of TravelEdge. GM Ian Edwards said the 21-strong group had a combined annual TTV of $1.5 billion, with TravelManagers’ Barry Mayo stepping in as interim Chairman.
New York in Qantas, Air New Zealand sights
Qantas’ much-hyped “Project Sunrise” plan to operate non-stop flights from Sydney to both London and New York took a step forward last month when the carrier rejigged a 787 delivery flight to operate direct from New York with about 50 people on board. Billed as a scientific experiment to gather data on the impact of such a long sector, participants wore activity trackers and underwent a prescribed timetable of activity and sleep to see how the routine would impact jetlag.
While QF is pushing Airbus and Boeing for new, longer-range versions of their planes to achieve the goal, it should be noted that the proposal is also being used to leverage a new industrial agreement with pilots, some of whom are pushing back on new employment conditions which QF CEO Alan Joyce says are necessary to make the flights financially viable.
Meanwhile a masterstroke of timing from Air New Zealand saw it announce its own non-stop services from Auckland to New York, just after the Qantas fanfare around its test flight. And by contrast, NZ’s plan is a reality, rather than theory, with a lower-density 787-9 in its fleet already having the required range. Air NZ will debut its New York non-stops in October next year, boosting its North American network to six destinations.
At the same time NZ has taken the sensible decision to shutter its long-running Los Angeles-London flight which will also see it close a significant crew base in the UK. The savings from the move will be redirected to routes with a “higher potential for profitable growth,” according to acting CEO Jeff McDowall, whose replacement early next year by US-based Walmart CEO, Greg Foran was also unveiled last month.
Chipchase departs DNSW
Sandra Chipchase, who has led Destination NSW since 2011, last month announced she would step down in December. While there have previously been suggestions of a fractious relationship with the state government, her departure was lamented by NSW Tourism Minister, Stuart Ayres, who highlighted a litany of successes under Chipchase’s tenure, including major reforms of regional tourism in NSW.
“Sandra negotiated key airline, travel trade and media partnerships…under her exceptional leadership, innovation and negotiation skills, NSW became number one again. There is no denying she has the most outstanding track record of achievement of any tourism, business events or major events executive in the nation,” Ayres said.
It’s unclear what the next step will be for Chipchase, who will also relinquish her role as Executive Producer of Sydney’s Vivid Festival. A recruitment process for her replacement is now under way.
Delta takes LATAM stake
Delta Air Lines continued its strategy of expansion through equity partnerships last month, with the announcement it would take a 20% stake in South American airline group LATAM. The US$1.9 billion deal will also have a significant impact on the global airline landscape, with LATAM to leave the oneworld alliance under which it currently closely cooperates with American Airlines. LATAM hasn’t said whether it will join Delta’s SkyTeam, but the departure leaves a major “white spot” in the oneworld map — an issue sure to be on the mind of the alliance’s CEO, former Qantas, Emirates and Helloworld senior executive, Rob Gurney.
In the wake of the announcement, Qantas was quick to note that there was no change to its codeshare with LATAM. “Qantas and LATAM have agreed that the bilateral agreement we have works well for customers, and we will look for opportunities to enhance it in future,” the carrier said.
Journey Beyond grows
Experiential tourism group Journey Beyond has added yet another business to its burgeoning portfolio, with the acquisition of premium small group operator Outback Spirit. The Albury-based company will continue to be led by founders Andre and Courtney Ellis, with the deal said to give Journey Beyond a “comprehensive national presence” with operations in every state and territory of Australia.
Journey Beyond has major bases in Broome and Darwin, operating 250 departures across 20 fully escorted 4WD touring routes and safaris each year in Arnhem Land, the Kimberley, the Pilbara, Central Australia, outback Queensland and Tasmania.
Other Journey Beyond brands include the Indian Pacific, The Ghan, The Overland and the soon-to-debut Great Southern rail journeys, along with Cruise Whitsundays, Rottnest Express, Sal Salis Ningaloo Reef, Darwin Harbour Cruises, Horizontal Falls Seaplane Adventures, Eureka 89 and Eureka Skydeck.
Journey Beyond is owned by Quadrant Private Equity, which has been steadily expanding the business since acquiring Great Southern Rail in 2016 and placing it under the Experience Australia Group banner. Last year Journey Beyond recorded $177 million in TTV.