State of the industry: April 2016

Read about the growing importance of the AFTA Travel Accreditation Scheme (ATAS), and more, in this month's State of the Industry!

Bestjet’s ATAS court action

The growing importance of the AFTA Travel Accreditation Scheme (ATAS) was underlined late last month when online travel agency Bestjet took the seemingly extreme action of initiating a Supreme Court injunction against AFTA when the Federation decided not to renew Bestjet’s ATAS membership. The culmination of a long-running process, AFTA stated that the OTA had not been able to satisfy the criteria of the ATAS Charter, in particular section 2.5 which stipulates that applicants and their ‘Close Associates’ “must be a fit and proper person to become, and remain a Participant”.

As this issue of travelBulletin goes to press the matter is yet to be resolved, with the injunction giving Bestjet a week’s deferral of the ATAS decision. Bestjet’s determination to have its day in court is also set to force AFTA to outlay significant legal costs defending the matter. The online agency, which claims to have sold 180,000 tickets last year, is run by Rachel James, whose husband Michael was banned from being involved in the management of any businesses in 2012 after he presided over the spectacular collapse of Air Australia, to the tune of $97 million and with the loss of 300 jobs.

Virgin Australia digs deep

Virgin Australia has tapped its deeppocketed shareholders on the shoulder, with Etihad, Singapore Airlines, Air New Zealand and Virgin Group to provide a new $425 million loan. The 12 month facility is on “arm’s length commercial terms” and aims to provide the carrier with “additional flexibility in the short term”. The funds will bolster Virgin Australia’s financial position, with the company yet to see the full benefits of its ongoing Virgin Vision transformation program.

It’s not the first time Virgin has sought additional working capital, with a $350 million rights issue in 2013 fully supported by the major shareholders. VA chief executive officer John Borghetti said the new $425 million facility would give space for a review to ensure the group has a “capital structure that supports its strategic objectives”. Analysts say the cash requirements of the business are in part a reflection of its hedging policies which have seen Virgin Australia unable to fully participate in the massive decline in fuel prices.

Helloworld affiliates together

The new broom at Helloworld continues to see changes, including the launch of a new affiliate group which incorporates the former Concorde Agency Network. Dubbed My Travel Group, it’s an evolution of the existing Helloworld affiliate model with the combined group claiming some 800-odd members and in excess of $1 billion in TTV.

New Helloworld ceo Andrew Burnes said it was the outcome of a year-long consultation with members as to what they wanted in an independent buying group network. As well as offering the benefits of buying power and supplier deals, My Travel Group offers a dedicated online portal giving access to SmartFares, SmartTickets and preferred partner information and flyers.

David Padman, Head of Corporate, Associate and Affiliate Networks said the program was being embraced by members. “This is about Helloworld boosting the support we provide to our independent agency network… My Travel Group is an affiliation brand which supports our agents’ individual brands and identities. It allows our agents to be recognised as part of a network, especially by our suppliers,” he said.

NTIA voting now open

A frenzy of activity around the opening of voting for the National Travel Industry Awards means the 2016 NTIA looks set to once again be bigger and better than ever. More than 800 nominations were received across the award categories and there has been heavy lobbying for votes in the supplier and agent categories, with voting to wrap up on Friday 8th April. The finalists will be announced on 27th April prior to the judging process which will decide the ultimate winners who will receive their awards on the industry night of nights, Saturday 16th July, 2016.

However due to yet another incident of diary confusion the NTIA has this year once again been scheduled on the same weekend as the annual Flight Centre Global Ball. The unfortunate clash will mean many suppliers are torn as to which event they will send their most senior executives to, while some at Flight Centre will have to miss the Ball in order to attend the NTIA. It will be a busy week for all, with the Travel Industry Exhibition (and the Travel Daily Christmas in July) also taking place in Melbourne on the Monday and Tuesday prior to the NTIA (11-12 July), and then in Sydney the following week on Monday and Tuesday 18 and 19 July.

Flight Centre court case

Flight Centre has resolved to vigorously defend itself yet again from allegations of price fixing, with the long-running case brought by the Australian Competition and Consumer Commission set for a further hearing. The ACCC was granted special leave by the High Court to appeal the former decision of the Full Court of the Federal Court, which last July found in favour of Flight Centre and overturned a previous judgement including the refund of a fine of $11 million levied against the company.

ACCC chairman Rod Sims says there is an important legal principle at stake, particularly with the growth of suppliers which sell both directly online and through intermediaries. The case will go to a full hearing of the High Court later this year, with Flight Centre managing director Graham Turner saying he was disappointed the Commission continues to pursue the matter, following the previous “clear and unanimous” judgement.

“We are not in the business of attempting to make airfares more expensive and we will continue to fight to be able to seek access to all fares to ensure the millions of customers that we serve are not forced to pay more for their flights,” Turner promised.

International Sunlover

Helloworld wholesale looks set for a shakeup, with the revelation last month that the AOT Group’s Sunlover Holidays operation has launched a new range of international product. Previously domestically-focused, Sunlover’s 2016/17 range includes new brochures featuring New Zealand, Fiji, the Cook Islands and the Pacific, with the move described as an “exciting new direction for Sunlover Holidays [which] will provide its retail agency partners an extensive range of product to choose”.

Also new for Sunlover is the launch of distribution in the New Zealand market, with the full range of 16 brochures now available to agents across the Tasman. Helloworld ceo Andrew Burnes hasn’t indicated his intentions for the existing Qantas Holidays/Viva! Holidays operations and whether there will be integration with Sunlover, but this latest move by AOT shows he clearly has a strong belief in travel wholesaling.

Dalton to join Uniworld

New Travel Corporation chief John Veitch has wasted no time putting his stamp on the organisation, with high level changes in several of the company’s brands over the last few months. One of the biggest changes is an increased focus on the Uniworld brand, with the general manager role vacated by John Molinaro upgraded to become a managing director and the well-respected Qantas Holidays national sales manager Fiona Dalton appointed to the role.

Dalton, who has driven Helloworld wholesale through much evolution over the past five years, will become Uniworld Boutique River Cruise Collection managing director early next month, with Qantas Holidays chief Peter Egglestone describing it as a “significant opportunity to advance her career”. Other senior changes implemented by Veitch include the departure of James Gaskell following the closure of Creative Holidays, as well as the appointment of former Virgin Australia staffer Alex O’Connor as managing director of Insight Vacations, replacing Joost Timmer. The reshuffles mean Trafalgar
managing director Matthew Cameron-Smith is now the Travel Corporation Australia’s longest-serving managing director.

Voyages Field of Light

The launch of the new Field of Light interactive art installation at Ayers Rock looks set to create strong demand for visitation to Australia’s Red Centre. The piece involves a massive total of 50,000 solar-powered lights spread across the desert, providing an intriguing new experience for both domestic and international visitors alike. That’s not to mention business events, with Uluru conference organisers expected to make the most of the stunning setting.

Field of Light is the brainchild of UK-based Bruce Munro, who has created the artwork in a number of settings around the world. He came up with the idea following a visit to Uluru in 1992 and so it’s very fitting that it has finally been installed at the place which inspired it in the first place. Field of Light opens to the public this month and will run for the next year, with Tourism Australia managing director John O’Sullivan telling travelBulletin it will be “one of the most talked about Australian attractions around the world”.

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