Frequent travellers to the US are daring to hope for cheaper air fares from next year after the EU and the US finally agreed an ‘open skies’ deal on transatlantic flights. From March 2008, government restrictions on which airlines can fly from cities in the EU to cities in the US will be lifted which, in theory, should increase competition and drive down prices for business travellers. More British and overseas airlines will now be able to offer flights to the US from major hubs such as Heathrow or Stansted and, of course, UK airlines are also free to fly from cities such as Madrid or Paris directly to the States.
But the open skies deal is a double-edged sword for British business. Travellers may indeed see increased competition among airlines, which may mean lower fares. But Britain is already a major hub for transatlantic flights: beyond the usual suspects from Heathrow, customers can fly Delta and Continental from Gatwick, not to mention business-only carriers such as Maxjet, Eos or Silverjet. By contrast, routes in other parts of Europe are less well developed so the benefits of the deal may be felt more widely across continental Europe than in Britain itself.
A major criticism of the deal is that it appears to favour the US: while American carriers will be free to operate between EU cities, EU airlines will not have the same privilege in the US and restrictions on foreign ownership of US airlines have also not been lifted. British Airways called the agreement a “bad deal for British aviation” but as one of the main effects of any deal was to weaken the airline’s control on London Heathrow, it could not have expected to be happy.
There are signs, however, that BA has realised the extent to which it has upset frequent travellers over its new, less flexible baggage charges at check-in. Under rules introduced in February, travellers can check in only one item, under 23kg, for free and although you can carry more if you fly business class, the one-bag limit applies in all classes on domestic routes. In another short-term effort to soften the blow, BA now says the charges will not come into “full effect” until September, and that customers who cannot physically lift a single bag will not be charged.
In March, BA also sold the regional operations of one of its subsidiaries, BA Connect, to Flybe. The move saw a series of flight cancellations on regional routes. Some routes – including flights from Birmingham to Barcelona and Madrid – have not been replaced. Meanwhile BA has launched a new subsidiary, BA CityFlyer, operating from London City Airport.
In other news, airlines’ plans to allow mobile phones in-flight are proving to be unpopular among business travellers. According to the latest Barclaycard business travel survey, 59% of business travellers say they do not want to see mobile phones in-flight, even if the technology is shown to be risk-free. The results suggest that “business people want to preserve this as a time to work or relax without fear of being interrupted, overheard or having to listen to the person next to them”, said Denise Leleux, director of commercial cards at Barclaycard Business.
The same survey showed that, despite the benefits of videoconferencing and environmental opposition to the rise in air travel, respondents still say travel is an essential part of their business: 79% said their company had benefited from business travel, with only 3% saying they could have achieved the same success for their company without such trips.
At the limits
On the roads, congestion and the environment continue to dominate the agenda; so much so that the chancellor’s decision to increase fuel duty by 2p a litre from October 2007 didn’t receive the level of opposition it would have done even half a decade ago. That was partly because the headlines focused on the decision to launch seven ‘bands’ of road tax: according to the new rules, the more carbon your motor emits, the more road tax you will pay.
There was predictable anger from the Road Haulage Association, which was dismayed that the three-year freeze on fuel duty had come to an end. “Despite representing only 2% of vehicles on Britain’s roads, our industry keeps UK plc in business,” argued chief executive Roger King. “But we are still put into the same bracket as all other road users.” The idea of a national road-pricing scheme, proposed by the government, has so far proved unpopular among road users. Edmund King, executive director of the RAC Foundation, said in February that more needed to be done to win over the motorist. He suggested a voluntary scheme by which if drivers signed up for pay-as-you-drive on the most congested roads, they would get reduced fuel duty, help in avoiding congestion, improved parking availability and cheaper motor insurance. Meanwhile, a survey by Bibby Financial Services found, perhaps surprisingly, that only 18% of owner/managers think the proposed road-pricing scheme would hurt their business.
Even ignoring the environment for a moment, the economic problem of life on Britain’s roads is exemplified by two other statistics. On the one hand, a survey by the RAC Foundation and the website www.companycardriver.co.uk found that 20% of company car drivers sit in congestion for more than 11 days a year, which is a lot of fiddling with your in-car radio. On the other hand, in the same month, a report from the Centre for Economics and Business revealed that transport costs in the UK are double those of every other European country, which suggests there is little room for manoeuvre with further cost hikes.
Meanwhile, drivers who use their cars for work are being urged to get a hands-free kit if they plan to use their mobile phones in the car. Since January, anyone caught using handheld phones while driving can have three points added to their licence and will incur a £60 fine.
Rail disruption
Confidence in Britain’s rail infrastructure, which had started to rise in recent years, suffered a blow in February with the crash of a high-speed train on the West Coast mainline. Faulty points were confirmed to be the ‘immediate cause’ of the crash, which killed one woman and seriously injured 11 people. Network Rail apologised after the accident, and operator Virgin Trains said it had noticed a deterioration in performance on track repairs after improvements in the past few years.
But there are also signs of increased investment to come, which should boost business travellers. Network Rail said it would spend £2.4bn over the next two years on extending the network, including work on links to the Olympic site.
One major infrastructure project that always seems to be on the ‘nearly’ list is Crossrail: a cross-city rail network that proposes to link Maidenhead in Berkshire with the east end of London, with an underground section travelling through the centre of the city and a Heathrow link to boot. The Mayor of London Ken Livingstone has kept the pressure on the government to give the go-ahead to the project by threatening to withdraw his support for the Labour party if there is no progress by the next election.
Business travellers who have the freedom to choose their own working hours will also be disappointed by plans by one rail operator to charge more to customers who travel in late morning. From May, South West Trains is increasing fares by up to 20% for customers arriving in London between 10am and noon, and even the new ‘super-off-peak’ fares for after 12pm go beyond fare increases introduced in January.
Anthony Smith, Passenger Focus chief executive, said of the move: “These large increases are unjustified. They have the effect of extending the peak throughout the whole of the morning and because of that must have as much to do with making money as they do with seeking to ease the crowds on true peak-hour trains.”
