February 2002 issue

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South Africa winning favour

Travel Update

- Australia has confirmed a drop in inbound visitor traffic since September 11, proving that even those destinations that are not expected, in the language travel industry, to suffer a drop in bookings are susceptible to the global concern about safety among travellers. Peter Shelley, Managing Director of the Australian Tourism Export Council, said there had been an 11.9 per cent decline in visitor numbers in September 2001 compared with the previous year's figures - which is about 50,000 visitors.

- UK carrier British European has launched three new routes from Newcastle, Birmingham and Edinburgh in the UK to Brussels in Belgium. "British European has for some time been looking to expand operations into Europe," said Jim French, the carrier's Managing Director.

- Peter De Jong, previously Director-General of the Federation of International Youth Travel Operators (Fiyto), has taken up a new position as President and Chief Executive of the Pacific Asia Travel Association (Pata). Senior Pata executives said De Jong would play a major role in building relations with Europe and the USA. Both are major suppliers of visitors to the Asia Pacific region. "I am honoured and excited to have been selected for this important post," said De Jong. "As Pacific Asia travel and tourism is entering its most dynamic period of sustained growth and development, I consider it a privilege to contribute to Pata's unique success story."

- Virgin Blue in Australia has added services from Melbourne and Adelaide to Perth on the west coast. Meanwhile, Ansett Mark II is flying and operating on the same routes while awaiting a rescue offer. At the time of going to press, the administrator for the airline said that two businessmen had proposed a AUS$3.6 billion (US$1.9 billion) rescue plan, which is expected to go ahead.

- UK-based EasyJet revealed a 50 per cent rise in pre-tax profits last year, and announced it was planning on expansion. "While some other airlines are announcing job losses and fleet capacity reductions, we look forward to hiring additional staff to deliver planned growth," commented Ray Webster, Chief Executive of the company. The carrier is reported to be keen to become the first low-cost operator in France.

- Meanwhile, low-cost operator, Virgin Express, revealed its own expansion plans last year, following Sabena's collapse in Belgium (see page 10). In November, it launched four new routes from Belgium to Zurich and Geneva in Switzerland, and Stockholm and Gothenburg in Sweden, and it also announced that it would be hiring an additional 200 employees.

- Elsewhere, carriers have been cutting staff or services in an attempt to remain competitive. Alitalia has decided to cut 3,500 jobs and Lufthansa is axing 4,000 of its employees. In the Middle East, Gulf Air announced it would trim its 32-strong fleet by six aircraft and reduce its route network to survive the downturn in international travel. Job losses were also predicted.

- Another victim to the squeeze on air traffic was Canada 3000, Canada's second largest airline, which collapsed last year. Canada 3000 bought Royal Aviation earlier in 2001 to become a major player in the market. There was no warning for passengers as the company unexpectedly folded in November last year. The airline said it had been losing US$287,000 per day.

- Direct flights between China and Taiwan, which have been banned for 50 years, look more likely since a flight from Shanghai in China to Taipei in Taiwan, via Manila in the Philippines, was launched last year. The flight, offered by Philippine Airways, operates five times a week and is a new alternative for Taiwanese and Chinese passengers, many of whom previously travelled via Hong Kong or Macau.

- Japan Airlines and Japan Air System are to merge by autumn this year, according to Ogi Chikage, Japan's Transport Minister. If the deal goes ahead, the two airlines will control over 80 per cent of international routes from Japan.

- Scandinavian airline SAS is bidding to take over Norwegian carrier Braathens. An agreement was reached after discussions between the airlines' prinicipal shareholders Braganza, Bramora and KLM – which may sell its 30 per cent stake in the airline. In a separate statement issued last year, SAS announced that it would not introduce its service to San Francisco in the USA, because of falling passenger levels.

Industry analysts forecast that South Africa will gain favour with international travellers who perceive it to be a "safe" destination, and already, some carriers have increased their capacity to the country.

Lufthansa and Olympic Airways are adding extra services to Johannesburg while Emirates, Iberia and Cathay Pacific are all rumoured to be considering increasing their number of services to South Africa.

"With the exception of Swissair, not one of the main international carriers serving South Africa has curtailed frequency or capacity after September 11," said Moeketsi Mosola, Chief Executive of South African Tourism. Juan van Rensburg, Chairperson of the Board of Airline Representatives, added, "South Africa is one of the few shining stars for any airline to operate in. It is doing well because it is a safe destination and people are still flying [there]."

The news is welcomed by language schools and the tourism industry in the country. In recent years, there has been a decline in flights to South Africa, with airlines citing the weak rand and falling profits as reasons for their withdrawal. Fifty-two airlines flew into South Africa last year, down from 74 in 1997.

Mark van Niekerk, Director of One World Language School in South Africa, said that bookings at his school had not been adversely affected since September 11. "Bookings at [our] school have [actually] increased, and [are] also from a wider range of countries, for example, Saudi Arabia and Pakistan," he said.

Frankfurt next hub for Ryanair

Since expanding services out of Ireland and the UK by setting up a hub in Belgium last year (see Language Travel Magazine, May 2001, pages 10-11), low-cost carrier Ryanair has subsequently announced that Frankfurt Hahn airport in Germany is to become its next hub.

Starting from mid-February, a total of 10 European services will be offered from the German airport to cities in the UK, Italy, Norway, France and Ireland. Daily services offered will include London, Milan, Pisa, Pescara, Oslo, Montpellier, Perpignan, Glasgow, Bournemouth and Shannon.

"Thanks to Ryanair and Frankfurt Hahn Airport, the era of Lufthansa's high fares in the German market is over. German consumers and visitors will now have a choice of scheduled flights and guaranteed lowest fares," announced Michael O'Leary, Ryanair's Chief Executive.

Managing Director of Frankfurt Hahn Airport, Jorg Schumacher, commented, "This is a milestone in the development of the airport, [especially] when you consider that the decision has been made at a time when other airlines are being forced to reduce their number of flights."

Agent Alberto Sarno, of Sprachcaffe/Languages Plus, based in Frankfurt, said Ryanair's move into Frankfurt Hahn was likely to lead to more language travel students for the Sprachcaffe chain. "Our schools in London and Brighton [will be] more convenient for Germans, while our schools in Frankfurt and Düsseldorf [will be] more convenient for Italians," he said. "Airfares make up almost 40 per cent of the [total] cost of a language course overseas, so if there are these possibilities on offer, price-sensitive students especially might decide to go [abroad] because of these deals."

Hopes of a revival ahead

According to the World Tourism Organisation (WTO), the travel and tourism industry is expected to make a comeback in the second half of 2002, as the global economy improves.

But while hopes were raised about the future, a WTO Crisis Committee acknowledged that the tourism industry is facing one of its toughest challenges ever. The WTO said, "The tourism sector has never before experienced a crisis of this magnitude." The hardest hit destinations were said to be those dependent on long-haul travel, places reliant on tourists from the USA, and countries in the Muslim world.

According to the European Commission, the events of September 11 have taken their toll on the UK tourism industry, with visitor numbers down by over a third since the atrocities.

Meanwhile, the Commission's Transport Commissioner, Loyola de Palacio, said the Commission would press ahead with plans for a single air traffic control system in the European Union and a single transatlantic flying area with the USA.

Malaysia drops Cairns

Malaysia Airlines is cutting its twice-weekly service from Kuala Lumpur to Cairns in Australia via Darwin. The route cut, which comes into effect this month, is another blow for Cairns, which saw both Garuda Indonesia and Singapore Airlines pull out from the city last year (see Language Travel Magazine, July 2001, page 10).

Other routes due to be axed by Malaysia include Auckland, Manchester, Munich, Rome, Zurich, Cairo, Beirut, Istanbul, Buenos Aires and Karachi. A spokesperson for the airline said it would be concentrating on "key routes" and pursuing alliance talks with KLM that would enhance its reach into Europe.

USA flight links weaken

Aviation links between the USA and the rest of the world are weakening, as US and other carriers have announced cuts in capacity to or from the country.

Last year, American Airlines, which has been badly affected by the September 11 tragedies, said it was dropping direct flights from Seattle to Tokyo and Dallas/Fort Worth to Osaka in January. "Weak economic conditions and the devastating effects of the September 11 attacks have hurt demand between the US and Japan and this makes it impractical to continue [operating these] routes," said Henry Joyner, American's Senior Vice President of Planning.

In Japan, All Nippon Airways axed a Tokyo to Chicago direct flight last year, after a "significant drop in demand for services between the USA and Japan", while Thai Airways announced it was closing seven offices in the USA and Canada, after a warning from the carrier's chairman that it could go bust within three years, because of huge debts. Its daily service to Los Angeles from Bangkok, via Japan, has also been cut to six services per week.

Japan downturn takes hold

There is clear evidence of a downturn in the Japanese air travel market. As well as axing a US-bound service last year (see left), Japanese carrier, All Nippon Airways (ANA), closed all its offices in Australia. The move marks a final decision by the carrier not to recommence flights to Australia. ANA had a code-share agreement with Ansett International, but this was terminated last year when Ansett collapsed (see Language Travel Magazine, December 2001, page 10).

Following a feasibility study, ANA was reported to have concluded that it would have difficulty in maintaining services to Australia given the current slowdown in the international air industry. However, it retains its air rights to operate to the country.

Domestic air travel has also been affected in Japan, according to reports. Japan Airlines, ANA and Japan Air System apparently experienced a contraction in passengers of up to 350,000 in October 2001, compared with October 2000, which is a four per cent decline in passenger numbers on last year.

Aerolineas Argentinas back in business

A consortium of firms headed by the Spanish travel group, Marsans, has acquired the Argentinean airline, Aerolineas Argentinas, assuring its future in the aviation marketplace.

Betty Wolff of BEW Network in Buenos Aires said, "Aerolineas Argentinas is getting back on its feet and that is great news for agents in Argentina."

After cancelling services for five months last year (see Language Travel Magazine, September 2001, page 10), Aerolineas Argentinas took off for Madrid, Spain, in November, and it now offers services to Rio de Janeiro and Sao Paulo in Brazil, Auckland in New Zealand and Sydney in Australia.

Emirates plans on expansion

Dubai-based carrier, Emirates, is adding five new non-stop routes to its network this year, to Osaka in Japan, Khartoum in Sudan, Mauritius, Casablanca in Morocco and Perth in Australia. "Despite today's challenging business conditions, the long-term future for air travel is steady growth," said Ghaith Al Ghaith at Emirates. "We expect our own passenger numbers to rise at least in line with this growth - or exceed it - thanks to our ultra-modern fleet, excellent service' and attractive fares."

In 2003, Emirates' first transatlantic flights are promised. The carrier placed an order with Boeing and Airbus for 58 planes last year.