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May 2004 issue

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Price cuts in low-cost sector

No-frills carrier, Ryanair, is cutting back on further services in an attempt to pass more cost savings on to the customer. The airline has asked Boeing to omit the window blinds and seat pockets from its latest instalment of aeroplanes. 'All of this will help us achieve our ultimate goal, where we envisage 50 per cent of our seats will be for free within five years,' said a spokesperson at the airline.

Ryanair estimated that window blinds alone would cost the company an extra US$250,000 on each plane. A spokesperson added, 'Ditching seat pockets will reduce cleaning costs and shorten the time in which planes are turned around.'

In other news in the low-cost sector, German-owned airline, Hapag Lloyd Express, has introduced a 'pay-what-you-like' concept on a number of limited flights from the UK to destinations in Germany. 'Our approach to customer service distinguishes us from many of the other low-cost carriers,' said an airline spokesperson. 'We are wholly confident that our passengers will reward us with a price that reflects adequately the levels of service we offer.'

Meanwhile, the UK based carrier EasyJet has announced that it intends to make the most of the enlargement of the European Union (EU) this year. 'With 10 new member states joining the EU from May 1, the market for low-cost airline services will expand dramatically,' said Ray Webster at the airline. 'We plan to be part of that expansion.'

The carrier has added seven new routes to its network, including three to Hungary, the Czech Republic and Slovenia. From this month, EasyJet also starts using Dortmund in Germany as its next European base.


UK international marketing efforts go online

The UK's Tourism Minister, Richard Caborn, has announced that the government is investing UK£1 million (US$1.84 million) into EnglandNet, an e-business infrastructure that allows customers to find out about and buy a whole range of tourism products online.

EnglandNet.co.uk 'has a fundamental role to play in the future of tourism in this country,' said Caborn. '[It will] improve worldwide access to the English product and help us to remain competitive in the 21st century.' The web forum will also encourage 'online communities' to swap suggestions about holiday plans in the UK.

Other efforts are being made to promote the UK to potential tourists overseas. In February this year, VisitBritain hosted a conference aimed at providers catering to the youth, adventure and independent travel market. Tom Wright, VisitBritain's Chief Executive, said, 'Young people often have very specific needs and represent the future of tourism, so we must work together to get the message out that Britain has much that will interest them.'


Virgin Blue has competition

Australia's low-cost carrier, Virgin Blue, now faces competition from Jetstar, the new discount carrier being launched by Qantas on May 25. Jetstar will initially serve routes between Sydney, Melbourne and Brisbane, as well as some leisure destinations.

Qantas announced earlier this year that it would flood the market with tickets at AUS$29 (US$22) when it launches the airline, and aims to break even in the first year of operation.

Meanwhile, a millionaire boss of a Formula One racing team, Paul Stoddart of Minnardi, is said to be planning his own low-cost airline venture in Australia from early 2005.

Ozjet would fly to secondary airports, said Stoddart. 'We are going to be looking at places like Bankstown and Moorabin,' he said. 'We're clearly not trying to go up against Qantas with Jetstar, but we feel that there is a niche market that can actually sustain very comfortably this service.'


Travel Update

Vienna Airport operator, Flughafen Wien, has raised its forecast for 2004 passenger traffic growth to eight per cent from 4.5 per cent. At the same time, Austrian Airlines posted a 5.5 per cent jump in operating profit for 2003, beating all expectations.

Air China posted a net profit of US$11.3 million in 2003, despite the effect of Sars. The airline suffered a loss of US$233 million in the first half of the year but strong domestic growth in the second half led to the favourable year-end results.

Ryanair has axed its route from London to Brussels Charleroi airport following the European Commission ruling that it received unfair subsidies from the airport (see Language Travel Magazine, April 2004, page 8). Chief Executive of the airline, Michael O'Leary, warned that other routes may also be withdrawn while the airline appeals against the ruling.

Tourist arrivals in France dropped in 2003, with one reason being the reticence of Americans to travel to the country, according to the French Tourism Ministry. Tourist numbers declined by 2.6 per cent to 75 million last year, while the number of US visitors fell by 18.3 per cent to 2.4 million. 'In 2003, for the second year running, British revenues exceeded those from America,' said a report detailing the trends.

Czech Airline, CSA Czech Airlines, has announced it will launch flights between Marseille and Barcelona in June, taking advantage of its EU membership. The planned flight will go from Prague to Marseille and then on to Barcelona. Only EU carriers can operate routes that take off and land in other European countries.

A new rail link has opened in Australia, linking Adelaide in South Australia with Darwin in the Northern Territories. The Ghan rail line previously stopped at Alice Springs, in the centre of the country, but has been extended to complete the 1,851 mile journey to Darwin.

China Southern Airlines has added a fourth weekly service between Sydney and Guangzhou to its network, and Annie Ye at the airline has admitted that its goal is to operate a daily service between these destinations. 'China is one of the world's fastest growing economies and tourist destinations,' she said, 'and Australia is becoming increasingly popular as a destination to visit.'

Aerolineas Argentinas has admitted there is strong demand on its Buenos Aires to Sydney route that is not always being met, and has said it intends to maintain three weekly services instead of offering two services per week between March and November.

SAS Scandinavian Airlines is splitting into three national companies in an attempt to get into better financial shape. SAS Denmark, SAS Norway and SAS Sweden will operate their own respective domestic operations.

Eastern European low-cost carrier, Wizz Air, has added a third base to its network in the northern Polish city of Gdansk. 'With this step, we have got closer to our goal to become the leading discount airline in [central Europe] this year,' said Jozsef Varadi at the airline.

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