travelBulletin

In case you missed it: August

Some of the top stories that you might have missed during July.

Aussie agents paid out from ALG collapse

The January 2017 collapse of All Leisure Group, parent firm of Swan Hellenic and Voyages of Discovery, disrupted the travel plans of more than 13,000 clients — and also left a significant number of Australian travel agents out of pocket.

Some local intermediaries were reportedly stuck with hundreds of thousands of dollars in credit card chargebacks. While British consumers and travel agents were protected under arrangements with the UK Civil Aviation Authority and a bond held by the Association of British Travel Agents (ABTA), there was no such safety net for foreign travel agents or consumers, who looked to be left out in the cold.

However long-running efforts by AFTA ceo Jayson Westbury on behalf of Australian travel agents were rewarded last month with confirmation that ABTA will pay out more than $1 million in compensation. Westbury travelled to London several times to negotiate the arrangements, which eventually saw AFTA successfully lodge 308 claims on behalf of its members. The moneys are believed to be currently in the process of being paid out — a fantastic result for the local travel sector.

John Thomas leaves Virgin unsatisfied

Virgin Australia’s seeming succession plans took a backward step late last month, with the abrupt departure of John Thomas after less than a year with the carrier. The formerly US-based aviation consultant was appointed in late June 2016 to oversee Virgin Australia’s domestic and international operations — and in the wake of his arrival the carrier lost significant experience and expertise with the departure of chief commercial officer Judith Crompton, chief operating officer Gary Hammes and head of sales Shirley Field. Initiatives undertaken during Thomas’ brief tenure included the new “Economy X” domestic product as well as the rejigging of the airline’s Los Angeles services to offer trans-Pacific flights from all three major Australian east coast cities — as well as axing the short-lived plan to launch VA services from Perth to Abu Dhabi. Fairfax reported that management decided Thomas was “not the right fit” for the Virgin position.

Virgin Australia ceo John Borghetti continues to focus heavily on the airline’s burgeoning partnerships with its major Chinese airline partners, Nanshan and HNA Group, which saw last month’s launch (complete with Richard Branson) of non-stop services from Melbourne to Hong Kong as the “spearhead” of VA’s Asian ambitions. Rob Sharp, ceo of Tigerair Australia, is currently acting in the operational role formerly held by Thomas while the company conducts a search for a replacement.

Helloworld profit upgrade

Helloworld Travel has lifted its profit forecast, reporting full year EBITDA are likely to be “at the top end” of its earlier upgraded projections of $52-55 million.

“We’ve seen positive growth in our air ticket sales across the retail and corporate networks in Australia and New Zealand, our wholesale and inbound businesses are benefitting from internal synergies and our corporate TMC business is continuing to grow,” said chief executive officer Andrew Burnes.

In the same statement to the stock exchange, Helloworld Travel also announced it had signed eight stores to become fully branded Helloworld Travel outlets, including five in south-east Queensland converting from Associate membership, another two in Victoria and one in WA. They are the first stores to join the fully branded network since the launch of the updated “Helloworld Travel — The Travel Professionals” brand in May. The travel company will report on its full year results on 23 August.

New Flight Centre acquisitions

Flight Centre Travel Group has moved forward on its plan to create a global destination management company (DMC) with the acquisition of Mexico-based Olympus Tours. The purchase was one of two offshore acquisitions announced last month, along with Bespoke Hospitality Management Asia (BHMA), a Thai regional operator of “design and lifestyle leisure hotels”. Olympus has operations in Mexico, the Dominican Republic and Costa Rica, and joins Flight Centre’s other recent DMC investments including in Vietnam-based Buffalo Tours.

“Expanding our in-destination network is a key global strategy and we are starting to develop strong foundations in this sector through our tour operators, DMCs and hotel management businesses,” Flight Centre managing director Graham Turner said.

Flight Centre is forecasting an underlying profit of $325-$330 million before tax, for the year to 30 June. The group gave a profit update last month after achieving record sales and strong growth in the second half. The company said it expected Total Transaction Value (TTV) to be more than $20 billion for the full year, an increase on the $19.3 billion recorded in 2015/16. Results were also boosted by record profits in the US and UK.

Dubai airline partnership

Emirates and low-cost carrier flydubai will leverage each other’s networks to scale up their operations and accelerate growth as part of a new strategic partnership announced last month.

The partnership will include a new codesharing arrangement, set to roll out at the end of this year, along with an integrated network collaboration and coordinated flight scheduling. Through the alignment, the Dubai-based airlines aim to develop new city-pair connections along with a number of commercial, network planning, airport operations and customer journey initiatives and a coordinated frequent flyer program between Emirates’ Skywards and flydubai’s Open.

Currently, Emirates has a wide-body fleet of 259 aircraft operating to 157 destinations and flydubai has 58 narrow-body Boeing 737s flying to 95 destinations — collectively offering flights to 216 airports globally.

By 2022, the duo plan to expand the number to 240 destinations using a fleet of 380 aircraft.

The arrangement will “unlock the immense value that the complementary models of both companies can bring to consumers, each airline, and to Dubai,” said HH Sheikh Ahmed bin Saeed Maktoum, chairman of Emirates Group and chairman of flydubai.

The Dubai government-run airlines will remain independently managed.

Mulpha selling Hayman

The out-of-action Hayman Island resort in the Whitsundays is on the market for an expected $300 million. Malay real estate bigwig Mulpha is offloading the resort after Kerner International operator One&Only pulled the pin on the Cyclone Debbie ravaged resort a few months ago.

Mulpha Australia has closed the resort until mid-next year for an extensive refurbishment and appointed commercial property sales agency McVay Real Estate to sell “one of the Asia Pacific’s most luxurious and prestigious holiday destinations”.

The listing includes the iconic 160-room hotel, 15 residential estates on the island and the option to purchase four soon-to-be-completed multi-million dollar homes.

The website of the Queensland resort, currently branded as Hayman Island Great Barrier Reef, advises that the property is accepting reservations from June 2018. “We invite you to watch this space for details of our journey and look forward to sharing updates of the island’s redevelopment with you,” the website says.

Mulpha has further tendered the management rights for the remainder of its Australian collection, which includes the InterContinental Hotel Sydney, InterContinental Sanctuary Cove Resort and Rydges Esplanade Cairns Resort.

US laptop bans lifted

The United States has lifted its controversial ban on large personal electronic devices, including laptops.

The US Department of Homeland Security confirmed the devices are now allowed on flights to US destinations from the 10 airports in the Middle East which were targeted by the initiative, after the airports and airlines complied with the new standards.

Initiated in March, the ban was put into place to increase national security after intelligence was received that terrorists may be developing explosives which could be hidden in consumer electronics.

Many carriers quickly made a move to implement solutions to ease the inconvenience on passengers, including Qatar Airways’ laptop loan service, which was rapidly followed by a similar service by Emirates.

The International Air Transport Association (IATA) slammed the “woeful” process behind the measures, highlighting a lack of consultation with airlines, and Emirates scaled back its capacity on some US routes, citing a weakened travel demand.

At the end of June, US Secretary of Homeland Security John Kelly revealed enhanced security screening measures for all commercial flights, which more than 280 airports — including the 10 targeted by the original laptop ban — complied with less than a month later.

ATG leadership restructure

APT Travel Group (ATG) managing director Chris Hall has unveiled a new senior management team, in preparation for his plans to step back from the day-to-day running of the business.

Hall will instead focus on new opportunities, partnership growth, product enhancements, acquisitions, market development and distribution, and in raising the profile of the Group globally. The team will report to Hall and includes David Cox, ceo Travelmarvel and Steve Reynolds, ceo APT.

Debra Fox has been promoted to chief commercial officer and will be responsible for many of the shared service teams, along with all key commercial agreements with trade partners, while Ashleigh Smith will re-join ATG after a three-year hiatus in the newly-created role of chief people officer.

ATG’s executive team will remain unchanged aside from the addition of Justine Lally as general manager marketing and of Mary Arbuckle, who has been promoted to head of digital.

Hall said the assembling of the team put the Group “in a much stronger position to leverage opportunities between brands while also setting our sights on future growth”.

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