TICKET prices of flights to and from Europe are likely to go up next January, when the aviation sector will be included under the European Union’s emissions trading system (EU ETS), despite continued opposition from airlines overseas.

The EU has set a cap on carbon dioxide emissions, with airlines having to pay for emissions that exceed those limits.

Speaking to media on the sidelines of the IATA AGM in Singapore earlier this week, Lufthansa CEO, Dr Christoph Franz, estimated that the ETS would result in an additional annual cost of 150-350 million euros (US$220 million to US$512 million), depending on the actual price of certificates.

Dr Franz explained that while the airline had started to purchase certificates, it has yet to introduce any ETS surcharge in ticket prices, as there were still doubts whether the scheme would be implemented as scheduled.

He added that the ETS was being met with vehement protest from some countries that “have even announced retaliatory measures against EU carriers, which will then increase the competitive disadvantage for European carriers”.

Some 4,000 aircraft operators around the world will be affected by the scheme, with many arguing that the EU has no right to unilaterally impose this on carriers from other countries.

US airlines will take their case to the European Court of Justice next month, while the China Air Transport Association has said it would recommend “harsher counter-measures” against flights by European carriers operated in and out of China.

At a CEO forum during the IATA AGM, Emirates Airline president Tim Clark said the EU’s scheme would likely spawn a series of ETS-like measures in other regions like Asia and the Middle East, further burdening the industry.

“We are now perhaps the highest taxed entity of any business on the planet today,” he said.

– Read more in TTG Asia, June 10 issue

THAI hotel chain Dusit International has bought a partially-completed five-star resort in the Maldives.

The property, located on Mudhdhoo Island in Baa Atoll, is 80 per cent complete, and consists of 100 villas, one spa building, and three restaurants and bars.

In a filing to the Stock Exchange of Thailand, Dusit revealed that it would pay US$60 million for leasehold rights for 33 years until 2044.

Dusit expects to invest another US$17 million to complete the resort and cover pre-opening expenses.

The company added that it was looking for a co-investor, but that Dusit would keep hold of at least 50 per cent equity.

THE TOURISM and meetings industry in Medan, North Sumatra is planning to form the Medan Convention Bureau to boost the domestic and regional MICE market to the destination.

Sumatra Tourism Promotion Board executive director, Artur Batubara, said: “Medan has all the facilities to be a MICE destination. Many developers have invested in (three- to five-star) hotels in Medan, and most of them have meeting facilities. We have about 10 PCOs here, and even have two convention and exhibition halls, each about 3,000m2, opening this year.

“We feel that Medan needs to have a convention bureau to maximise all these facilities.”

He added: “The stakeholders know there is the potential, but there is a lack of confidence among the stakeholders to come forward to bid for an event.”

One of the major business cities in Indonesia, Medan is listed as one of Indonesia’s 10 MICE destinations by the Ministry of Culture and Tourism. Medan has extensive domestic flight connections. Regionally, it has direct flights to Singapore, Kuala Lumpur, Penang, Bangkok and Hong Kong.

Batubara said the city’s MICE business was currently dominated by government meetings, and only recently, health-related conferences have started to appear, thanks to the presence of JW Marriott Medan. The city has previously hosted several sub-regional ASEAN meetings and travel marts.

At the moment, the board for the new CVB is being established, while a discussion with the Medan Municipal Government is underway on how the bureau will be run, its funding and programme.

A MULTI-agency effort is underway in Japan to re-instill confidence in the country as a holiday destination. The initiative will initially target travel industry professionals, and subsequently, consumers.

Tourist information centres and the Japan National Tourism Organization’s website are disseminating up-to-date information in multiple languages around-the-clock, including in English and Mandarin.

The Japanese government has also approved a supplementary budget of 4.1 trillion yen (US$51 billion) for 2012 to assist in recovery efforts.

Naoyoshi Yamada, vice commissioner for international affairs, Japan Tourism Agency at Japan’s Ministry of Land, Infrastructure, Transport and Tourism, said that the greatest barrier to attracting visitors back to Japan was the radiation problem resulting from the Fukushima nuclear power plant disaster.

“In Tokyo, radiation levels have remained in the normal band, and are in fact even lower than in Singapore,” he said.

International organisations, such as the International Atomic Energy Agency, World Health Organization and World Meteorological Organization, have confirmed the return to normalcy.

While domestic tourism has recovered quite strongly since the disaster, international travel into Japan is somewhat sluggish.

Yamada hopes that visits by high-profile personalities such as Lady Gaga this month, and the staging of the World Travel and Tourism Council in Tokyo next year, will help boost inbound travel.

Japan has even made a direct appeal to Chinese travellers to return, and this has been helped by the recent visit of the chinese premier and minister of tourism.

SINGAPORE Airlines (SIA) and Virgin Australia today agreed to establish a long-term partnership that will provide the platform for both carriers to coordinate schedules, offer attractive joint fares and tie up their frequent flyer programmes.

Virgin Australia’s CEO, John Borghetti, called this a “ground-breaking alliance”, saying: “This is an enormous game-changer that will not only make us more competitive in Australia, but also result in more employment opportunities, given the industry’s ability to generate 600 jobs in the economy for every 100 jobs in the aviation industry.”

SIA CEO, Goh Choon Phong, said: “This is a pro-competition alliance and the potential is immense.”

No equity in either carrier was involved, but both airlines were focused on maximising the synergy offered by this alliance.

Subject to regulatory approval by the Singapore and Australia governments – which is expected within six months – Virgin Australia’s customers will be able to access about 70 additional destinations covered by SIA and its subsidiary SilkAir, while SIA/SilkAir customers will enjoy similar access to about 30 new destinations served by Virgin Australia.

Both airlines will codeshare on each other’s international and domestic flights, but the cooperation for the moment will not extend to the trans-Pacific Australia-US route that SIA has long sought.

“We want to continue pushing for the trans-Pacific flight from Australia to the US, and hope that the alliance with Virgin Australian will strengthen SIA’s case,” said Goh.

Goh emphasised that going forward, “anything that helps this alliance is on the table”. He did not discount the possibility of SIA expanding its operations into more Australian points, or jointly operating a route with Virgin Australia.

Borghetti also confirmed that there was a possibility of Virgin Australia operating its aircraft into Singapore.

BANGKOK-based Absolute Hotel Services (AHS), which established operations in the Middle East last month, is now looking to expand in China. AHS started its overseas expansion last year, when it went into joint ventures in Indochina and Mumbai.

AHS CEO, Jonathan Wigley, said he was in talks with potential partners in China to form more joint venture agreements, similar to its current deals in Doha, Hanoi and Mumbai, which it intends to use as platforms for expansion in the Middle East, Indochina and India.

Established in 2008, the hotel management company has 52 properties and 5,000 rooms in Thailand, Indonesia, Vietnam, India, Qatar and Oman under its management portfolio.

Twenty-six properties are branded under AHS’s deluxe boutique brands U Hotels and Resorts, 24 are branded under mid-scale Eastin Hotels, Eastin Residences and Eastin Easy, and two are unbranded properties.

Of these properties, six – in Thailand, Vietnam and India – are operational. By the end of the year, 14 will be operational; by end-next year, 41 properties will be online.

In supporting inventory growth, Wigley said AHS had invested “substantially” on marketing infrastructure, supplying both B2C and B2B distribution capabilities to properties under its network.

By Sirima Eamtako

VISA application agency VFS Global’s Thai visa-processing office, which opened in Hyderabad yesterday, is expected to boost outbound travel to Thailand.

Travel Express managing director, C Venkateshwar Prasad, told TTG Asia e-Daily: “The new facility will speed up the process for obtaining visas and help travel agents and travellers from Hyderabad.”

“In the past, we had to apply for visas in Mumbai or Delhi,” he explained. “Being able to apply for Thai visas here will save us two days. It will help many last-minute travellers.”

Prasad added: “While there is also the existing facility of getting visas-on-arrival at a Thai airport, travellers prefer to have their visas on-hand to avoid joining the queues on arrival.”

Balmer Lawrie & Co. regional manager Western India, Mahesh K. Neralkar, said: “VFS’ visa facilitation service in Hyderabad will help us save time and effort in sending our clients’ visa applications to Mumbai, Delhi or Chennai.”

The visa-processing centre in Hyderabad is the fifth one in India. An estimated 45,000 Thai visas were issued to travellers from Hyderabad last year, while 50,000 are expected to be issued this year.

By Anand & Madhura Katti

CENTARA Hotels & Resorts has signed a management contract that will see the opening of its first property in Bali.

The Centara Grand Nusa Dua Resort & Villas will be completed at the end of the year. The resort’s soft opening is scheduled for December 2011, with the grand opening to be held in 2012.

Gerd Steeb, president of Centara Hotels & Resorts, said: “Bali represents our fifth overseas destination, and follows the successful opening during the past 18 months of properties in the Maldives, Indian Himalayas, the Philippines and Vietnam.”

Chris Bailey, senior vice president of sales and marketing at Centara Hotels & Resorts, said: “We are very pleased that our first step into Bali is with our premium Centara Grand, as this brand appeals to couples, families and groups across the medium five-star market.”

Located in Nusa Dua, the property will have 76 guestrooms, ranging in size from 60 to 70m2, and 14 villas offering a choice of one, two or three bedrooms.

The resort will offer an Indian restaurant, an all-day dining restaurant, a lounge bar, a club lounge, kids’ club, a spa, a fitness centre, two swimming pools, and meeting rooms.

AS A precautionary measure against the E coli outbreak currently spreading in Europe, SriLankan Airlines has removed all fresh vegetables like tomatoes, cucumbers and leafy greens from its menu on all flights out of the region.

“SriLankan Airlines flies to London, Frankfurt, Paris, Milan and Rome in Europe, and until it is once again safe to serve raw vegetables, which may carry the E coli bacteria, we have decided to remove all such items from our range of menus on food uplifted from these European cities,” the carrier said in a statement last Friday.

SPEAKING on the sidelines of the 67th IATA Annual General Meeting in Singapore, Japan Airlines’ (JAL) president, Masaru Onishi, was optimistic about the carrier’s future.

Even though JAL’s April 2011 international and domestic bookings were down 20 and 15 per cent respectively, Onishi said that “the gradient of decline has eased, and we are seeing a slight pickup in passenger numbers in May versus April, many of which are found to be last-minute bookings made much closer to the travel date”.

Onishi was confident that JAL would achieve its profit forecast of US$929 million in the current financial year ending March 2012. JAL exceeded its previous forecast by almost three times, when it ended its fiscal year ending March 2011 with a profit of US$2.3 billion.

Onishi attributed the optimism to JAL’s reforms instituted after it was forced to file for bankruptcy in January 2010. The airline trimmed international and domestic capacities by 40 and 30 per cent respectively, and retired its entire fleet of B747-400s. It also instituted a wide range of cost-cutting measures and focused on returning to profitability.

“These measures we have taken as part of our reorganisation have helped us better cope with the unexpected crisis following the devastating earthquake and tsunami,” he said.

Meanwhile, JAL expects to receive its first Boeing 787 Dreamliner in the last quarter of the year, and have two or three of these aircraft in its fleet by March 2012. The airline has already announced the launch of nonstop Tokyo-Boston flights in April 2012 using the new aircraft.

Onishi also confirmed that negotiations were ongoing between JAL and Jetstar Airways to establish a low-cost carrier in Japan, but declined to comment further on the matter.