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Thu 28 Aug: 10 things you need to know today

We’ve done all the hard work so you don’t have to! Read on for the top 10 travel industry news stories of the day that we think you need to know.

We’ve done all the hard work so you don’t have to! Read on for the top 10 travel industry news stories of the day that we think you need to know.

1. Qantas in the red with confronting $2.8 billion loss

Qantas has posted a statutory loss of $2.843 billion for the year ending 30 June, a result even worse than market prediction pushing the airline into the red. The airline’s CEO, Alan Joyce said the poor result, a decline of $566 million in revenue, was “unacceptable” and “confronting” but represents “the year that is past, and we have now come through the worst” with the airline expecting to see “accelerating benefits” in the coming year.

The costs associated with its $2 billion transformation plans announced in February, weaker demand due to lowered consumer confidence and reduced business activity from the mining and government sectors coupled with a record high fuel cost of $4.5 billion, up $235 million year-on-year, were reasons the airline attributed to the full-year loss before tax of $646 million.

Qantas also made a non-cash write-down of $2.6 billion to the carrying value of aircraft of the airline’s international operations, which will now be under a new holding structure. Read more

2. Pilots urge Qantas to re-think strategy

pilots-KarryOnThe Australian and International Pilots Association are urging Qantas management to “learn the lessons of the past” following the national carrier’s dismal financial results to the tune of a $2.8 billion loss announced today.

The Association have advised the airline to “strategically invest in the right aircraft for Qantas International so it can return to its former prestige and profitability”.

“Although pilots recognised change was necessary for Qantas International to position itself for the future, focussing on cuts alone would not produce positive results,” AIPA President, Nathan Safe said in a statement.

“Cuts are only one half of the equation and, frankly, it’s the easy half for management. The more challenging problem is how to strategically invest for future growth,” Mr Safe said. Read more

3. MAS deserted by staff and travellers

Almost 190 Malaysia Airlines cabin crew staff has resigned due to ‘family pressure’ of fears for their safety following the two tragic accidents this year. The carrier, which prior to the MH17 and MH370 incidents this year, had a relatively good safety record which is now under scrutiny from travellers and is reportedly losing $1.6 million a day flying virtually empty planes out of Australia. The airline said 186 crew had left “in the first seven months of this year, with many blaming family pressure prompted by the tragedies,” according to news.com.au reports.

“Following the MH17 incident, there was a spike in crew resignations but the number has now decreased to acceptable and routinely expected levels,” it said in a statement.

“Many cited ‘family pressure’ as the reason for their resignation due to the MH17 and MH370 tragedies.”

The news site cited Abdul Malek Ariff, secretary-general of the employees union, telling Edge Financial some “are now are afraid to fly”.

Abdul Malek was also quoted as saying crew shortages were forcing staff to work up to 12 hours a day.

The airline is considering a review on aircraft orders and possibly replacing its CEO, Ahmad Jauhari Yahya, as well as possibly laying off some 4000 employees, SMH claims.

Earlier this month the airline planned to buy out minority shareholders as part of a strategy to revive the airline. It is set to announce its financial results today.


4. Consumers warned

Australian consumers are reportedly falling victim to travel rorts and are being urged to be diligent before making holiday bookings according to a news.com.au report.

The news site said Fair Trading offices nationwide are receiving a “large number of complaints” regarding travel bookings and companies that refuse to give refunds or delivering “unsatisfactory performance of services”.

Allegations of misleading conduct and unfair fees and charges are also amongst the complaints, the news site said. NSW Fair Trading Commissioner Rod Stowe told the paper “the large number of complaints made in 2013-14 prompted a stern message to consumers to take extra care making a booking”.

“It relates to a whole host of providers of travel services and individual travel agents and services provided by hotel groups,’’ he said to the paper.

“We’ve also had complaints about businesses that have operated online and where services haven’t been provided to the individual consumers.

“People need to be discerning with travel purchases as they are with other consumers purchases.”

Earlier this month Australian consumer protection agencies launched the new “Pack Some Peace of Mind” campaign to highlight the need for consumers to protect themselves before making bookings, especially when they bypass using a travel agent. Consumer watchdog Choice’s spokesman Tom Godfrey told the paper to consumers should be booking through credible agents and websites.

“When booking any travel service over the internet always look to see if there are contact details and it’s a secure site,’’ he said.

“When dealing with agents do your home work by using an accredited agent.”

5. Qantas’ multi-million-dollar losing baby

Jetstar KarryOnJetstar reported a $116 million loss for the full year ending 30 June, down from $138 million profit in the prior corresponding period.

The decline in earnings is said to have been driven by “yield pressure from market capacity oversupply in South East Asia and market growth ahead of demand in the Australian domestic market”.

“Unfavourable fuel cost of $86 million was not recovered in intensely competitive markets.”

Qantas said the expansion of Jetstar Japan and the establishment of Jetstar Hong Kong also resulted in associate losses of $70 million.

Meanwhile, in Singapore, Jetstar Asia reported a $40 million loss due to the “intense competitive environment”, according to the airline.

“Jetstar Asia continues to provide a strategically important price sensitive gateway to Asia, operating in a highly competitive market with LCC capacity up 27%, putting significant downward pressure on yields for all airlines in the market. This was partially offset by four per cent increase in Ancillary revenue per passenger compared to the prior corresponding period”.

6. Champagne-time for Accor Group

Sofitel Sydney Darling Harbour Pool Deck

Sofitel Sydney Darling Harbour Pool Deck

As Europe’s largest hotel operator, Accor has reported a 15% increase to deliver a strong US$289 million earnings before tax first-half profits for the year ending June 30. The French company said it benefitted from cost-cutting strategies and strong demand in the Mediterranean region, Africa and the Americas.

The company has forecasted full-year EBIT of 575 million euros to 595 million euros as a result. The hotel group this year has been focussing on owning hotels it operates, as opposed to mass-expansion. The Group’s net income was 60 million euros, up from a restated 34 million euros a year earlier. Revenue fell 1.8 percent to 2.59 billion euros.

7. helloworld outlook better than FY14

helloworld reported a $40.6 million earnings before tax result for the year ending June 30, representing a 25% drop year-on-year. The group’s statutory loss was $61.2 million while total transaction dropped 6% to $4.86 billion. The number of retail outlets has reportedly dropped 7% this year alone due to the rebranding initiative last year, and is expected to result in a $59.5 million impairment cost for its retail segment, which will lead to better results for FY15.

8. Glam-cation – a new way to getaway

A boutique tour company Glamarama Getaways, is putting a new spin on luxury trips for women 30+ by launching the “glam-cation” – trips filled with “ultra-glamorous inclusions” tailor made just for women to exotic locations like Honolulu, Hong Kong and New York City.

The operator said groups would be limited to a maximum 14 ladies, with each trip including attending an “exciting event or activity such as an action-packed night out at an international horse race event or being first in line at a mega fashion sale”.

“Each evening there’s a fun “Girls Night Out” event where the ladies get together to enjoy a glass of champagne and a cocktail or two and dine out at a hot foodie destination,” the company stated.

9. Record crowds at Vanuatu’s Tok Tok

helicopter_vanuatuTok Tok kicks off today at the Holiday Inn Resort Vanuatu, with attendance expected to be double that of the previous event which was postponed in 2013. Now in its 11th year, the event has secured over 70 wholesalers from around the world including Australia, New Zealand, USA, Europe, China, Fiji, to discuss business opportunities with more than 100 local tourism operators, including provincial tourism offices, hotels and tour operators from around Vanuatu.

Vanuatu Tourism Office (VTO) general manager, Linda Kalpoi said Tok Tok 2014 is an integral part of its tourism strategy and not only provides a platform to encourage and develop business opportunities but also puts the destination under the spotlight for key industry personnel.

“Tok Tok is a very valuable event on our calendar and this year we have decided to incorporate the theme ‘Vanuatu and its cultures’ to get our visitors thinking about Vanuatu as a diverse destination, with plenty to offer beyond the popular ‘fly and flop’ holiday experience  it is often regarded for,” she said.

Tok Tok 2014 will wrap up on tomorrow following a gala dinner.

10. Aeroflot dangles cash for jingle

AeroflotRussian-run Aeroflot will pay musicians 6 million rubles (US$160,000) to come up with a jingle the airline can use. According to ETN, a tender published on the government’s official procurement website, the company needs a short corporate jingle in which the word “Aeroflot” is sung, and which contains short phrases that reflect the attributes of the Aeroflot brand.

The composition must attract people’s attention and encourage them to choose to fly with Aeroflot. The jingle must also be catchy but cannot contain any profanity or advertising of products and services not linked to the airline.

What’s your reaction to today’s news? Share your comments and feedback below or send us your news stories for the next edition of Need to Know.