Thursday, 22 December 2011

IAG deal reflects runway squeeze

Why has the International Airlines Group agreed to pay Lufthansa £172.5 million for British Midland*? Take off and landing slots at Heathrow, that's why. And while that's not immediately bad news for passengers it may prove to have been a symptom of higher fares to come. The deal brings IAG, which includes British Airways, slots for 56 extra round trips and day. Slots are precious because the Government has set its face against the building of another runway at the airport. I'm not being judgmental but you can't have it both ways. Either you expand airport capacity to keep pace with demand or you pay more, eventually, to fly.

*The agreement leaves Lufthansa the option of selling BMI Regional and low cost bmi baby separately

Tuesday, 20 December 2011

Currency deal misses main target

The agreement by banks to scrap the fees they charge travellers who use debit cards to buy foreign currency in the UK – announced by the Office of Fair Trading today – misses the bull's eye. It will do nothing the reduce the huge gap between the rates offered to individual travellers and the commercial rate. Today, for example, you might have received €1.14 to the £, though the commercial rate was over €1.19 – a difference of 4.3%. Agreement to scrap charges, typically between 1.5 and 2% for credit cards purchases in the UK was reached with Lloyds/HBOS, Barclays, RBS/Natwest, Santander and the Co-operative Bank. Together with other card companies they have promised to provide clearer information on charges to customers buying currency abroad. The agreement was secured by the Office of Fair Trading after a super complaint by Consumer Focus. A spokeswoman for the OFT said the gap between rates had not been part of its investigation. It had tried to ensure travellers could make clearer comparisons between foreign currency providers, not least when they advertised 0% commissions. The OFT found that last year travellers spent around £32 billion abroad - of which £27 billion was holiday spending, That total included currency bought before departure and spending on cards while abroad. It resulted in estimated revenue of £1.1 billion for UK travel money providers.

Monday, 12 December 2011

Cathay to launch premium economy

Good news for long legged travellers who don't want to pay the full whack for business class. Cathay Pacific is the latest airline to launch a premium economy cabin on its long haul flights. Seats will have six inches more leg room than those in economy. They will also be wider and will recline further and will be equipped with 10.6in entertainment screens and laptop power points. Passengers will be able to connect personal devices and view content on the screens. The new class will be available for booking from March and the first flights equipped with the seats will take off in April. The airline plans to have fitted them on 87 aircraft by the end of 2013. They will appear first on services between its Hong Kong base and Sydney, Toronto, Vancouver and New York routes. Next will come those to London,other European cities, Los Angeles, San Francisco, and the rest of Cathay's long haul network.