August 2003 issue

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Problem of Sars recedes

The threat of Sars and the media hype surrounding the disease are now abating, and countries specifically affected by Sars are investing in their tourism infrastructures in order to encourage travellers to return.

The Singapore government launched a SG$230 million (US$133 million) rescue package for its tourism, transport and airline industries. In Thailand, cut-price holidays are being offered to stimulate the market under a 1.1 billion baht (US$26 million) initiative.

Hong Kong's government is spending HK$1 billion (US$132 million) on kickstarting its tourism industry again. 'What we need now is an' effective publicity strategy that draws the attention of global consumers and media, and rebuilds their confidence,' said Selina Chow at the Hong Kong Tourism Board.

The Association of Asia Pacific Airlines has called on airports, air traffic service providers and other industry suppliers to help airlines in the Asia region by cutting fees and charges. Meanwhile, airlines in Asia report that bookings are beginning to improve again.

Language schools in affected countries, such as Canada, also suffered from what they consider to be over-reporting of a health scare that carried minimal risks. Nevertheless, Sars panic put travellers off international air travel. Schools across Canada experienced a downturn in demand. 'The international community hears 'Sars in Toronto' but understands 'Sars in Canada',' pointed out Luc Renaud at Visa Language Institute in Ottawa.

The International Civil Aviation Organisation (ICAO), has released guidelines for preventing the spread of Sars and other contagious diseases at airports in the future. 'These measures can become a valuable model for dealing effectively with other contagious diseases that may emerge in the future,' commented Assad Kotaite, President of the ICAO Council.

US Airways teaming up

US Airways, which restructured and emerged from Chapter 11 bankruptcy protection earlier this year, has been teaming up with other airlines and forming strategic alliances in a bid to remain competitive.

It is the latest carrier to join the global Star Alliance, becoming the 17th member. 'The addition of US Airways will increase the number of airports served by [Star Alliance] from 700 to 771,' said David Siegel, Chief Executive at the airline. 'Expanding the reach of our network through the alliance will create enormous benefits both for our customers and our business.'

The airline has also signed an alliance with Germany's Lufthansa that will mean code-sharing across networks, joint promotions and access to dual customer services. 'This new alliance comes at a very exciting time for US Airways, as we begin implementing the business goals we set forth during our restructuring,' said Siegel.

Airlines keen to fly to Iraq

A number of carriers have expressed an interest in operating services to and from Baghdad in Iraq, citing the business potential in operating flights to the country. A spokesperson for the German carrier, Lufthansa, said in a statement to the press, 'Baghdad with its oil refineries is [Iraq's] leading industrial centre and, especially for business travellers, will become an increasingly important destination. With a flight from Germany, Lufthansa could offer its customers an attractive service for this market.'

A decision was being awaited from Iraq's administration regarding the new Lufthansa service at the time of going to press, pending clarification of the country's transport law.

Other international carriers that have also expressed an interest in offering passenger flights to Iraq include US carrier, Northwest Airlines, which has filed a request with the US Department of Transportation, and UK-based Virgin Atlantic.

Travel Update

Low-cost Australian operator, Virgin Blue, has posted a three-times increase in pre-tax profits for the year ending in March. Chief Executive of the carrier, Brett Godfrey, said the profit of AUS$158 million (US$104 million) indicated that the firm's low-fare model worked, even in times of global uncertainty for the aviation sector. New routes were launched in June, including Sydney to Darwin and Sydney to Alice Springs.

Air New Zealand has announced that route cuts made in response to a drop in passenger numbers during the Sars crisis will be extended through to the end of September. Flights to Singapore and Taipei are currently scaled back and capacity has been reduced across other flights by switching to smaller aircraft. Ralph Norris, the carrier's Chief Executive, said the move was a prudent business response to the current operating environment.

Emirates is launching a daily service from Dubai to Brisbane via Singapore in October, and its current Sydney service via Singapore has been increased to a daily service. In October, flights to Sydney will become direct.

Air France claims to have overtaken Lufthansa and British Airways as Europe's biggest airline in terms of market share. Earlier this year it announced an annual profit of e120 million (US$140 million) for the year ending in March, despite a difficult start to 2003. In the same period, the airline carried 42.9 million passengers, a drop of one per cent on the previous year.

Vietnam Airlines has rebranded itself, introducing a new lotus logo and livery. A business class service has also been incorporated in the airline.

Germany's low-cost airline, Germanwings, is continuing to expand. New routes added to the network from the airline's Cologne/Bonn base include flights to Budapest in Hungary and Athens in Greece. The frequency of existing services has also been increased. Joachim Klein, Managing Director of the carrier, said, 'Although the competition in the Cologne/Bonn market is fierce, we are delighted that we continue to be successful.'

Australia is planning a new tourism drive to attract more tourists to the country. According to Ken Boundy, Managing Director of the Australian Tourist Commission, the focus - due to budgetary constraints - will be on nine 'super markets' that account for the majority of Australia's visitors. These include Japan, New Zealand, the USA and the UK, where marketing campaigns have already been launched.

The European Union (EU) has been given permission to negotiate air rights agreements with the USA by 15 EU countries. Soon, a unilateral air access agreement between Europe and the USA will be under discussion. The move follows a ruling last year by the European Court of Justice that bilateral air agreements were in breach of European law. However, EU member countries have retained their right to negotiate bilateral deals with other countries.

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