Eliana Willis

The UK Civil Aviation Authority (CAA) has published a consultation on its initial proposals for the next price control at Heathrow Airport.
This will ultimately set the maximum charges the airport operator can charge its airline customers for using the airport for the next five years.
The CAA said it recognises that there is still significant uncertainty in the shape of the aviation industry’s recovery from the Covid-19 pandemic.
These proposals will deliver affordable charges for consumers and allow the airport to continue to invest in service quality, while also supporting consumer demand as the industry recovers.
The package of measures set out in the consultation include a five-year control period, which will allow the airport to smooth charges for consumers and provide investors with medium-term certainty.
The control period will come into force in summer 2022.
The potential range of airport charges per passenger will be from £24.50 to £34.40, an increase from £22 per passenger in 2020.
The CAA will work closely with Heathrow, airlines and other stakeholders to narrow this range over the next few months.ADVERTISEMENTCommenting on the initial proposals, Richard Moriarty, chief executive at the UK Civil Aviation Authority, said: “While international air travel is still recovering, setting a price control for Heathrow Airport against the backdrop of so much uncertainty means we have had to adapt our approach.
“Our principal objective is to further the interests of consumers while recognising the challenges the industry has faced throughout the Covid-19 pandemic.
“These initial proposals seek to protect consumers against unfair charges, and will allow Heathrow to continue to appropriately invest in keeping the airport resilient, efficient and one that provides a good experience for passengers.
The CAA said there would be no additional adjustment to Heathrow’s regulatory asset base to account for losses caused by the pandemic on top of the £300 million the CAA allowed earlier this year in response to a request for an adjustment of £2.3 billion last year.
“We look forward to working with all stakeholders as we refine this package of measures in the coming months, before setting out our final proposals next year.”
Heathrow Airport had requested the CAA increase the cap on its charges per passenger to between £32 and £43.
The proposals drew a furious response to Shai Weiss, chief executive of Virgin Atlantic.
He said: “Today’s initial proposals from the Civil Aviation Authority fail to protect the British consumer, paving the way for Heathrow Airport to introduce unacceptable charges, just as international travel resumes at scale.
“The world’s most expensive airport risks becoming over 50 per cent more expensive, as Heathrow and its owners seek to recoup their pandemic losses and secure hundreds of millions in dividends to shareholders.
“It is concerning that the regulator has failed in its first opportunity to step in, and together with industry partners, we will oppose these proposals in the strongest terms to protect passengers.”
He added: “Abusing its unique position as the UK’s only hub airport, Heathrow’s proposed increase of charges will hurt the UK’s economic recovery and unfairly hit the pockets of families and businesses around the nation.
“No other airport in the world is proposing increases on this scale and by becoming unaffordable, competing EU hubs and airlines will benefit.”

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The Competition & Markets Authority has launched court action against Teletext Holidays over inadequate progress on refunds to package holiday customers.
In May, the government body announced that Truly Holdings, the company that operates Teletext Holidays, and its sister company, the travel operator Alpharooms.com, had signed undertakings committing to refund package holiday customers for holidays cancelled during the pandemic.
After reviewing Truly Holdings’s final report on progress with repayments, the CMA wrote to Truly Holdings on September 16th stating it would take the company to court unless it took urgent action to improve how it handles refunds to package holiday customers.
The CMA does not consider that Truly Holdings has done enough to provide refunds to package holiday customers with outstanding claims, including recent cancellations, or to make sure that it pays all future refunds that are due within the 14 days required by law.
The CMA has therefore filed proceedings requesting a court order that outstanding refunds be immediately repaid and that, going forward, customers who are entitled to a refund are repaid within 14 days.
The CMA will also be asking the court to order that Truly Holdings puts in place appropriate processes to ensure it complies with the law in the future.
As the CMA considers that Truly Holdings is in breach of the law and that harm to consumers is ongoing, it is seeking that the claim be expedited, so that the case can be heard more quickly.ADVERTISEMENTHowever, it is for the court to determine a date for the hearing.
Andrea Coscelli, chief executive of the CMA, said: “Companies must abide by consumer protection law and treat their customers fairly.
“After engaging with Teletext Holidays extensively, we are now requesting a court order to make sure that the company immediately pays back the money it still owes to customers and refunds people within 14 days, going forward.”
Rory Boland, Which? Travel editor, said more needs to be done to tackle errant companies.
He added: “It’s unacceptable that Teletext Holidays has not yet paid all outstanding refunds for cancelled holidays and is still failing to comply with the 14-day period required by law, so the Competition & Markets Authority is right to start court action.
“Teletext is just one of many holiday providers that have attempted to shirk their legal responsibilities to refund customers for cancelled trips, highlighting the need for industry-wide reform.
“The government must ensure there are better protections for holidaymakers’ money, while the Civil Aviation Authority and Competition & Markets Authority must be given stronger powers to take action against companies that break consumer law – including the ability to impose fines if necessary.”

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Sandals Resorts executive chairman, Adam Stewart, has been formally invited to join the executive committee of the World Travel & Tourism Council (WTTC).
The induction represents the actionable change and strides forward made by Stewart throughout his time in the industry.
“I am honoured to join the executive committee of an organisation I have so respected since the start of my career,” said Stewart.
“This leadership team is passionately focused on the efforts of the travel and tourism sector, and I am eager to contribute.
“Together, we will continue to promote an industry that is more sustainable and inclusive than it was yesterday, reminding our neighbouring industries and international governments that travel is an essential necessity to life.”ADVERTISEMENTThe World Travel & Tourism Council represents the global tourism private sector.
Members include 200 chief executives, chairs and presidents of the leading tourism companies from all geographies covering all industries.
Julia Simpson, chief executive of the WTTC, said: “Adam brings with him a wealth of experience having worked so closely with his late father to build what is now, one of the most recognised brands in our industry.
“The entire WTTC family and I look forward to working with Adam in his new role.”
A voluntary organisation, WTTC leadership sets the example, offering their valuable time and resources to move global activity forward in this ever-changing world. Industry leaders invited to join the executive committee stand as catalysts for fundamental change and awareness, promoting safe and enriching travel.
More Information
Sandals is considered the World’s Leading All-Inclusive Company by voters at the World Travel Awards.

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The World Travel & Tourism Council has argued the year-on-year recovery in the UK may only claw back a third, while international travel spending continues to plummet.
Latest research from the body shows the recovery has been severely delayed by the lack of spending from international visitors.
WTTC blames strict travel restrictions, such as the destructive ‘traffic light’ system, for wreaking havoc on the sector.
Now, despite its highly successful vaccine rollout, the UK is set to record further losses in inbound visitor spending than the previous year, during which international travel ground to an almost complete standstill.
At the current rate of recovery, WTTC research shows the UK sector’s contribution to the nation’s economy could rise year on year by just under a third (32 per cent) in 2021, broadly in line with the global average of 31 per cent.ADVERTISEMENTHowever, research conducted by the global tourism body goes on to show the increase has been primarily spurred on by the recent boom in domestic travel, with domestic spending growth set to experience a year-on-year rise of 49 per cent in 2021.
While this surge in domestic travel has provided a much-needed boost, it will not be enough to achieve a full economic recovery and save millions of jobs still under threat.
The research reveals that international spending is predicted to plunge by nearly half on 2020 figures – one of the worst years on record for the tourism sector – making the UK one of the worst performing countries in the world.
While other countries, such as China and the United States, are set to see a rise in inbound international travel spending this year, the UK lags behind and continues to record significant losses.
Severe travel restrictions, ever-changing policies, and barriers to travel to the UK, such as the current requirement for visitors to take an expensive day two PCR test after arriving in the country, have had their toll.
Julia Simpson, WTTC chief executive, said: “WTTC research shows that while the global tourism sector is beginning to recover, the UK continues to suffer big losses due to continuing travel restrictions that are tougher than the rest of Europe.
“Despite government announcements the UK still has a red list, costly PCR tests and a requirement for day two tests which simply put people off travel.
“Just as the world opens up the UK has more requirements for the double vaccinated than our neighbours.”

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The United Nations World Tourism Organisation (UNWTO) and Neom have partnered for a new initiative focused on the future of tourism in Saudi Arabia.
The Tourism Experiences of the Future challenge will source innovative ideas and disruptive business models related to the tourism needs of the future, in line with growing demand for new experiences.
All proposals must be aligned with the Sustainable Development Goals, the UNWTO said, and should include the introduction or adaptation of digital and technological elements.
They will be focused on at least one of the following areas:

Optimising and maximising the potential of experiential tourism.
Harnessing the positive impact of new technology.
Alternative business models.
Innovative experiences.

The competition is the first national initiative dedicated to identifying new companies that will lead the tourism sector’s transformation in Saudi Arabia.
As well as established businesses, the competition also welcomes applications from Saudi Arabian start-ups and innovators with ideas capable of revolutionising and inspiring tourists by presenting new ways and reasons to travel.
Applications are open until October 24th, with great interest expected, and participants must be Saudi citizens with legal capacity to enter into a contract.
Successful projects will be selected based on various criteria, such as the degree of innovation, their viability and sustainability.
An affiliate member of UNWTO since 2019, Neom is located in north-west Saudi Arabia along the Red Sea.

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The UK government must scrap its existing travel policy in order to boost the economic recovery, argues the World Travel & Tourism Council (WTTC).
The body argues the recovery of the sector has been hampered by the lack of international coordination, severe travel restrictions and slower vaccination rates in some parts of the world, which are still in place in many regions of the world.
In 2019, the tourism sector generated nearly US$9.2 trillion to the global economy, however, in 2020, the pandemic brought the sector to an almost complete standstill.
This resulted in a 49 per cent drop, representing a punishing loss of nearly USD$4.5 trillion.
While the global economy is set to receive a modest 30 per cent year on year increase from tourism in 2021, this will only represent US$1.4 trillion and is mainly driven by domestic spending.  ADVERTISEMENTThe economic modelling was conducted by Oxford Economics on behalf of WTTC and calculated a baseline scenario based on the current global vaccination rollout, consumer confidence and relaxed travel restrictions in some in regions around the world.
The research reveals that at the current rate of recovery, the contribution of tourism to the global economy could see a similar moderate year on year rise of 32 per cent in 2022.
Last year, WTTC revealed the loss of a staggering 62 million tourism jobs around the world and with the current pace of recovery, jobs are set to rise by only 0.7 per cent this year.
Similarly, research shows a more hopeful potential year-on-year jobs rise across the sector next year, by a positive 18 per cent.
Julia Simpson, WTTC chief executive, said: “Our research clearly shows that while the global tourism sector is beginning to recover from the ravages of Covid-19, there are still too many restrictions in place, an uneven vaccine rollout, resulting in a slower than expected recovery of just under a third this year.
“The UK prime minister has an opportunity to help revive the sector faster by removing the UK red list policy and enabling stress free international travel for all of those fully-vaccinated.”

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The International Air Transport Association (IATA) has confirmed that Robin Hayes, chief executive of JetBlue, will continue his duties as chair of the IATA board of governors until next year.
He will stay in the role until the conclusion of the 78th IATA annual general meeting in Shanghai next June.ADVERTISEMENTHayes began his duties as chair of the IATA board in November last year.
Due to interruptions in the cycle of governance meetings as a result of the pandemic, Hayes’ mandate was extended beyond the normal one-year cycle.
IATA also confirmed that Pegasus Airlines chief executive, Mehmet Tevfik Nane, has been appointed chair-elect of the IATA board of governors.
He will begin a one-year term as chair at the conclusion of the Shanghai meeting.

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Tui Group has confirmed plans to issue new share capital valued at €1.1 billion as the battle to recover from the Covid-19 pandemic continues.
Some 523 million new shares will be used, a total of ten new shares for every 21 existing shares.
“Following transformation and restructuring of business areas and the relaunch of tourism in recent months, our focus is now on refinancing and reducing the utilisation of government loans.
“We want to, we can and we will find our way back to economic strength.
“We are working on this relentlessly. ADVERTISEMENT“The new TUI will be leaner, more digital and more efficient.
“But it will continue to set standards in tourism, in quality, innovation and sustainability,” said Tui chief executive, Fritz Joussen.
Unifirm of the Mordashov family supports the strategy and, as the largest shareholder of Tui, has undertaken to exercise all subscription rights attributable to its shareholding of 32 per cent and to subscribe to the new shares accordingly.
The remainder of the capital increase is fully underwritten with Barclays Bank Ireland, BofA Securities, Citigroup, Deutsche Bank and HSBC acting as joint global coordinators and joint bookrunners.
Commerzbank, Landesbank Baden-Württemberg and Natixis will act as joint bookrunners.
TUI intends to use the net proceeds of the capital increase to reduce interest costs and net debt by reducing current drawings under the KFW facilities.

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