Cruise must provide shareholder value to invest and grow

Cruise must provide shareholder value to invest and grow

By Lee Hayhurst

Shareholder return is a vitally important part of the cruise industry if it is to attract more investment to allow it to grow, says Celebrity Cruises chief executive Michael Bayley.

Bayley told the Clia Columbus Day in Liverpool that profitability was a core component for cruise operators that need to invest billions of dollars to build new vessels.

“It’s incredibly important that we are providing an adequate return to shareholders and investors who put literally billions of dollars into the product. The marketplace for capital is very competitive. It’s not just available anywhere, people want to know that when they invest in whatever sector that they can get the return associated with any risk.

“We need to be able to encourage more investment. We need to introduce new brands and products and certainly need to introduce new ships. To achieve that we must achieve more revenue and reduce costs.”

Bayley, for instance, called for a more collaborative approach to port development in emerging cruise markets, the costs of which are currently passed on to the cruise lines which in turn pass them on to customers. “That’s really something that needs to be worked on,” he said.

Bayley added that the cruise industry must look to develop new sources of passengers like in the fast-growing markets of South East Asia, China and South America.

Tui places £4bn order for new-generation B737s

Tui places £4bn order for new-generation B737s

By Lee Hayhurst

Tui places £4bn order for new-generation B737sTui Travel has today unveiled a multi billion-pound investment in new-generation aircraft.

Europe’s largest travel group is to order 60 Boeing 737 MAX aircraft worth £4 billion with options on a further 90 of the narrow-body type.

Deliveries will start in January 2018 and run until March 2023.

The 737 MAX aircraft utilises a new-technology engine type claimed to result in a 13% improvement in fuel efficiency and a 40% reduction in noise over today’s main competitors.

The new 737s will provide lower per seat costs than current-generation aircraft, according to Tui.

Around 80% of the group’s passenger flew on 114 narrow-body aircraft across six airline brands including Thomson Airways in the last financial year.

“In order to maintain cost competitiveness and support Tui Travel’s aim to minimise the environmental impact of its activities, the existing narrow-body aircraft will need to be replaced in the next decade,” the company said.

“The proposed transaction will ensure that the group has sufficient aircraft to fulfil its long-term plans and that the expected accrued value justifies the cost of the purchase.”

Chief executive Peter Long said: “A major part of Tui Travel’s strategy is to provide our customers with unique holiday experiences they can only get from us.

“This multi billion-pound investment in the B737 MAX – representing the future generation of more fuel-efficient aircraft for our short and medium-haul programmes – will be a further driver in delivering this.

“It comes as the first of our Boeing 787s touches down in the UK to commence replacement of our long-haul fleet with best-in-class aircraft.

“We are leading the way in redefining mainstream holidays, and putting our customers at the heart of everything we do is integral to our continued growth.

“I can confidently say that being able to offer our customers the most advanced, comfortable aircraft, whether they are travelling with us to short or long-haul destinations, while reducing our environmental impact, will only strengthen our position.”

Thomson Airways’ first Boeing 787 Dreamliner is due to arrive at Manchester airport this morning. It has flown from the Boeing Everett Factory in Seattle and will be followed with the delivery of a further three Thomson 787 aircraft this summer.

View a timelapse video of Tui’s Dreamliner production

Thomson will fly the aircraft from Gatwick, Manchester, East Midlands and Glasgow airports on long-haul routes to Sanford, Florida and Cancun in Mexico.

Chris Browne, managing director of Thomson Airways, said: “After much anticipation we are very excited to welcome the 787 Dreamliner to our fleet, and as the first airline in the UK to take delivery we hope our customers will enjoy the unique experience of this revolutionary aircraft.

“The introduction of the Dreamliner is a major milestone in our journey of modernising the holiday experience. Customers will be amazed at the unique look, feel and service – all of which will ensure the unique Thomson holiday experience starts as soon as they step on board this fabulous new aircraft.

“The extended flying range of the Dreamliner also unlocks a host of new and exciting holiday options for our customers, increasing the range of long-haul destinations available with Thomson Airways, from four UK airports this summer.

“This winter we’ll fly the Dreamliner direct to Phuket in Thailand and from summer 2014 we will be introducing holidays to Mauritius and Puerto Vallarta, flying direct on our new 787 aircraft.”

The Thomson 787 Dreamliner will carry 291 passengers.

Thomson Airways will be taking delivery of eight Boeing 787 Dreamliners in total, up to May 2015.