Tour operators struggle to set 2012 prices amid oil uncertainty

The rising price of oil is imposing huge pressures on operators who are pricing programmes beyond this summer, a headache exacerbated by the level of Air Passenger Duty (APD) on fares.

In an exclusive interview with Travel Weekly, Tui Travel chief executive Peter Long said: “Energy costs and inflation are putting pressure on everything. It is a huge pressure for future seasons.”

He said: “It does not help when some analysts say the oil price could go to $200 a barrel. There is a huge amount of speculation in the price – a nasty speculative element that we just have to live with.” He suggested: “When things calm down in Libya we’ll see prices below $100.” And on APD, he said: “We can’t have all these added costs.”

However, he said the industry had to be realistic in its demands on the government ahead of the Budget.

“The country has to balance the books,” Long said. “There would not be a lot of support for us ranting and raving about APD.

“We will lobby, but I don’t expect any reduction [in rates]. We can get angry about it, but we need to recognise the environment we are in. Tax will be focused on those who can afford it.”

The Fair Tax on Flying alliance, which launched last week and includes Tui Travel, called on the chancellor to follow the new Irish government, which announced it would abolish the €3 tax on passengers flying from the Republic. The move follows a reduction from €10 in March 2011.

Long welcomed the return of tourists to Egypt and Tunisia, but forecast bookings would be 60% of the levels of last year. He said: “Rate reductions will be the way to get customers back.”

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.