IN BRIEF – news from September 2020

COVID-19 hits AFTA finances

COVID-19 hits AFTA finances

The release of AFTA’s annual report late last month made for sobering reading, with a $450,000 annual loss recorded for the year to 31 March 2020 — a period which included just two weeks of the COVID-19 pandemic. Apart from that the Federation’s activities during the 2019/20 financial year were pretty much on par with the previous 12 months, with about $2.2 million in income from membership and ATAS accreditation fees, as well as a $78,000 profit on the National Travel Industry Awards. However there was also a $430,000 “unrealised loss on financial assets” which partly reflected the dive in financial markets in the early days of the pandemic.

AFTA’s Board must be holding their breath that the organisation will be able to get some support in the upcoming Federal Budget, because for the current 2020/21 financial year all of the Federation’s traditional sources of revenue have disappeared — no fees are being charged for membership or accreditation, and the National Travel Industry Awards didn’t happen either.

The AFTA annual general meeting was also an unusual affair this year, conducted via Zoom and for the first time in more than a decade there were nominations for two of the six Board seats which were up for re-election. However given that under the Federation’s constitution, “Concessional” rank-and-file travel agent members of AFTA have effectively given their votes to their Board representatives, it was no surprise that the result was a landslide locking out the two new nominees who each received about 50 votes — compared to more than 800 for the incumbents.

The AGM was also the first appearance for Shelley Beasley from Webjet, who was controversially appointed to a vacancy on the Board just weeks after the OTA joined the Federation. But despite outrage at the time, there was no discussion or general business raised at the AGM, which in typical fashion took just 11 minutes.

Rex set to jet away

Regional Express is one major step closer to setting up jet operations on the “golden triangle” of routes between Australia’s east coast capital cities, after securing up to $150 million in funding from Asia-Pacific investment manager PAG Asia Capital. The private equity firm manages more than US$40 billion in assets, and will make its investment in the form of convertible notes which, if fully drawn down and converted into Rex shares would give the investor a 48% stake in the airline.

The first $50 million will be accessed in December, with PAG entitled to take two directorships on the Rex board. The airline’s Executive Chairman Lim Kim Hai said he was confident that Rex would “deliver to Australians an alternative major city domestic service that is safe, reliable and affordable”.

“With PAG’s support, I have every reason to believe that Rex can successfully launch its domestic major city jet operations,” he said.

Flight Centre targets travel entrepreneurs

Flight Centre is clearly looking to a future beyond bricks and mortar, with the launch of a “Home of the Travel Entrepreneur” (HOTTE) initiative through its Travel Partners B2B business. Spearheaded by GM Kate Cameron and Head of Sales Nicole Costantin, the program promises to provide both mobile and independent member agencies a “holistic business solution that will help them weather the COVID storm and emerge after hibernation”.

HOTTE has seen Travel Partners waive all fees until July 2021, with strong incentives for members, additional commission for domestic bookings and the comprehensive Flight Centre Travel Group product range, which is also set to become available to other retailers across the industry through an expansion of its The Travel Junction B2B platform.

NZ agent support

AFTER seeming to ignore the plight of the travel industry for months, the New Zealand Government has come through with a NZ$47 million support package which will effectively see agents paid commission for securing refunds and credits for clients. The ingenious solution ticks all the political boxes, with NZ Commerce and Consumer Affairs Minister Kris Faafoi saying the move will repatriate hundreds of millions of dollars that can now be spent in the local economy.

While the announcement was well received, the elation was somewhat tempered with the news on the same day that the Travel Agents Association of New Zealand (TAANZ) would “disestablish” the role of its Chief Executive Officer, with Andrew Olsen having now departed the organisation because his position was “no longer affordable”.

In Australia the industry continues to wait with bated breath for the outcome of AFTA’s $125 million budget submission, but there was some good news in Western Australia where the state government announced a $3 million industry-specific support package.

Cruise moves to highlight impact

The formation of a new Cruise Suppliers Advisory Group by Cruise Lines International Association (CLIA) last month is a canny move, with CLIA MD Joel Katz highlighting the long supply chain impacted by the enforced industry shutdown.

The initiative has enlisted representatives of Australia’s farmers, food wholesalers, beverage providers and transport companies in support of plans for a phased resumption of cruise operations in Australia, which are currently banned until at least 17 December.

“Many of these suppliers have been devastated by the suspension of cruise operations in a similar way to members of the travel and tourism industry,” Katz said, urging a careful restart involving local cruises only carrying Aussie residents.


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