SEAT-ONLY

SEAT-ONLY

Operators are enjoying buoyant short-haul sales but are worried by the recent decline in long-haul premium bookings.

No gain: operators are blaming high fuel costs and the weak pound for their decision not to pass on the cut in APDto holidaymakers

SEAT-ONLY operators have opted not to cut charter fares to take into account the changes in air passenger duty that came into effect on April 1.

The decision means holidaymakers flying within Europe will not reap the benefit of Chancellor Gordon Brown’s decision to halve APD.

After last year’s budget, ABTA president Stephen Bath welcomed the Chancellor’s announcement that he was reducing APD on short-haul flights – but fares have not come down at all.

Seat-only operators blame rising costs – about 5% over the past year as a result of increases in fuel prices – and the weak pound against the dollar, the currency used for buying fuel.

JMC Airfares general manager Rob Thompson said: “The reduction in APD is helping us to cover these increased costs and keep fares at about the same level as last year.”

Avro’s fares have gone up by an average of 2%, but commercial director John Fitz-Gerald insisted the operator was not pocketing an extra £5 for every seat sold.

“The customer is paying £5 less tax but our fares have had to go up anyway because of increased expenses,” he said. “The 2% increase is only just covering the extra fuel costs.”

Cosmos said it had cut prices on a “selection” of short-haul routes following the reduction in APD, but it admitted the £5 cut in tax had not been passed on to all passengers. The fact the short-haul market is buoyant at the moment is giving operators the confidence to keep fares up.

“Sales are very strong, particularly in the lates market,” said Fitz-Gerald. “For some weeks in March, our bookings were 10% to 20% up over last year.”

Unijet aviation director Claire Trevis said: “The flight-only market is extremely strong, so there has not been the discounting we have seen in previous years.

“Fares are holding up and we are hoping they will continue to do so throughout the summer.”

The black cloud around the silver lining, however, is the long-haul market, which has taken a hit in recent months.

Florida is performing particularly badly and operators say the increase in APD on long-haul premium fares is one reason for the fall in sales.

The charter carriers’ premium cabins fall into the same category as the scheduled airlines business-class cabins for the purpose of the tax, which has doubled from £20 to £40 for premium passengers.

Some charter carriers are believed to be considering getting rid of premium cabins on some routes as a result of the increase in APD.

Britannia is to drop its Extra service, which offered passengers more legroom on longer flights, from tomorrow.

A spokesman said: “The doubling of the tax was one of the reasons for our decision, but we plan to expand our Premium service to take up the space that was used for Extra.”

First Choice claims on some routes its own carrier Air 2000 isn’t making any money from its Classic Premium service following the rise in APD.

A spokeswoman said: “On the Cyprus route the supplement for Classic Premium is just £49 – the Government now takes £40 of that. Our prices were fixed before the APD rise, so in some cases we are covering additional costs ourselves.”

Consolidators selling seats on scheduled airlines, which feature APD as a separate item rather than building it into the total cost of the air fare, are passing the extra £20 on to their customers.

Travel 2 air product director David Gibbs said: “While they don’t believe the higher tax will put passengers off flying business class, the biggest concern is that it contributes to a general view that air travel is getting more and more expensive.”