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Confidence in Travel

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The Financial Muscle of Airlines & Cruise Lines

Airlines & Cruise Lines strengthen their balance sheets

 

Given the uncertainty around when worldwide travel will be able to resume in earnest, it’s natural many will be tempted to question the ongoing viability of some of the biggest companies in the industry.

With this in mind we thought we’d provide a brief summary of their past performance, current actions and the support they’re receiving to ensure confidence in what is a vital sector of the overall health of the world economy.  

Airlines are the big winners of Government Assistance


As part of the massive US$2-trillion coronavirus relief package signed into law last week by President Trump US based Airlines were given US$50 billion in aid.

In Australia the Federal Government will waive $715 million worth of fees and charges for domestic airlines. In addition, Virgin Australia have written to the Government to request an assistance in the form of a loan package if required. It is expected the Government will look on this request favourably as they have clearly communicated their support for 2 strong Airline businesses to operate in Australia.

Meanwhile, the Qantas Group secured a $1.05 billion loan on the 25th March, which caused shares to soar by 25 per cent. This funding increases Qantas’ available cash balance to $2.95 billion with an additional $1 billion undrawn facility remaining available.

The national carrier's statutory net profit came in at $980 million for the 2018 financial year, while its underlying profit before tax — its preferred reporting measure — increased by 14 per cent to $1.6 billion. Total revenue increased 6.2 per cent to $17.06 billion.

Qantas Group chief executive Alan Joyce said, “Over the past few years we’ve significantly strengthened our balance sheet and we’re now able to draw on that strength under what are exceptional circumstances. Everything we’re doing at the moment is focused on guaranteeing the long-term future of the national carrier, including making sure our people have jobs to return to when we have work for them again.”

Cruise Lines have access to almost US$9 billion in funds


The two largest cruise line companies in the world, Carnival Corporation and Royal Caribbean Cruises have access to a combined US$5 billion in credit, over and above current cash assets.

Roger Frizzell, a spokesman for Carnival said, “We recently secured $3 billion from our revolver [credit line] and we have significant assets around the world.”

Royal Caribbean directed reporters to a March 23 news release that said the company had “entered into a $2.2 billion, 364-day secured term loan facility, further enhancing the company’s liquidity position.”

In addition, Royal Caribbean said it has “over $3.6 billion of liquidity comprised of cash deposits and its existing undrawn revolving credit facilities” and had already committed financing for all of its new ships on order.
 

Cruise Lines are Hugely Profitable


Both of these companies are long-lasting market leaders with huge profits and strong financial positions. Carnival has been around for 48 years and reported full-year profits for 2018 of US$3.2 billion. Royal Caribbean has been around for 52 years and reported full-year profits for 2018 of US$1.8 billion.

Banks will want a piece of the pie


While the cruise industry may struggle mightily for the next few months, it's hard to imagine the coronavirus pandemic will lead to people never wanting to cruise again. These are very profitable companies that will eventually go back to making money. It seems likely therefore, that if needed, lenders will be more than willing to make the bet on the industry getting back to sea and once again generating the cash flows they have been for the better part of 50 years.

 


 

As you know the travel industry worldwide is facing an unprecedented set of circumstances resulting in mass disruption and cancellation of services.

I would like to personally assure you we as a company and your travel advisor individually are committed to providing you with the highest level of service we possibly can during this time.

We appreciate your patience as we work on a case by case basis to assist our many clients, with our priority to help those travelling in the near future, and working back from there.

If you are expecting a refund we will process these as normal and as quickly as possible. However, due to the backlog of transactions travel suppliers and operators are taking longer than normal to issue refunds to our office.

When this issue is over there are sure to be a host of great travel deals on offer, and our industry and the many thousands of people employed within it will be ready and willing to help you book your next well deserved holiday.

Yours sincerely,

Les Farrar
Managing Director
Your Travel & Cruise Pty Ltd

 

Given the current situation and cancellation of many travel services around the world we want to assure you we’re here to help with any of your travel related questions. However, as you’ll appreciate we are receiving a lot of enquiries right now. In addition, airlines, cruise lines, hotels and other travel partners are continually reviewing their policies as the situation develops.

Therefore, if you are due to travel within the next two weeks please contact us now. If you are due to travel after this time we advise you to hold off until nearer your travel date. That way, when you do get in touch, we’ll have the very latest information and advice for you.

We would also ask you to email us first, as this will allow us to assess the best course of action on your behalf and prioritise your request. Many operators are providing for online requests of credit vouchers and we may be able to give you this information by email.

Before you contact us, please:

  • Check your travel insurance policy to see if changes and cancellations due to ‘unforeseen events’ are included in your cover.
  • If your airline or cruise line has not issued a policy on change or cancellation fees due to COVID-19, you may have to pay penalty fees. To check whether your operator has issued a policy, check their website or find more information in the Cruises section below. If there is no policy yet, check again nearer to your date of travel.

If you’re concerned about the financial future of some of the big names in our industry, see our summary of the Financial Muscle of Airlines & Cruise Lines below.

Thank you for your patience during this time. Rest assured we are doing all possible to assist our clients as efficiently as possible.

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Travel Advice

On 24th March, the Prime Minister announced a ban on all overseas travel, with few exceptions. This is on top of their standing advice from 18th March to not travel overseas at this time. While there are still commercial options available to return to Australia, take them.

For the most up-to-date travel advice, please always refer to the Smartraveller website »

For health information, please refer to the Australian Department of Health website »
 

What steps are Travel Operators taking to protect your health?

In the interests of all concerned the health and wellbeing of guests and staff across all segments of the travel industry is treated with the highest priority. Some of the measures taken by cruiselines, airlines and tour companies include:

  • Enhanced pre-boarding health reporting and evaluation including temperature screenings
  • Additional cleaning and disinfection protocols onboard ships, aircraft and general transportation
  • Regular health reporting and temperature checks of staff

Tour Operators, Airlines and Cruise lines are denying boarding to all persons who have within 14 days before embarkation travelled from, visited or transited via airports in Iran, South Korea and China, including Hong Kong and Macau, and any municipality in Italy subject to lockdown.

Flexible change and cancellation policies

Reputable and long standing travel brands operating worldwide are implementing new policies allowing for changes and cancellations to travel arrangements without penalty. Whilst terms and conditions do apply, these are genuine relaxations designed to provide you with the confidence to take advantage of some of the great opportunites currently available.


 

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Flights

If you book now many a​​​irlines will allow you to change your travel dates in the future or reissue tickets if necessary, without penalty, regardless of your travel date.

Airlines currently offering flexible change policies include Emirates, Air New Zealand, American Airlines, United Airlines, Qatar Airways, Etihad, Qantas and more.

 

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Most cruise lines are offering flexible change and cancellation policies, including the option to postpone your cruise without incurring any cancellation fees. You'll receive a Future Cruise Voucher for the full value of the amount paid which can be put towards any future cruise fare.

For more information regarding cruise bookings cancelled by your cruise line, download the  Cancelled Cruises Flyer »
For more information regarding cruise line cancellation policies, download the  Cruise Line Cancellation Policies Flyer »

Cruise lines currently offering flexible change policies include Carnival, Viking, Royal Caribbean, Celebrity, Seabourn, Princess and more.

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Tours

Most tour operators are allowing guests to move their travel date to an alternative departure if necessary, or cancel altogether and receive a credit towards another booking at a more suitable time or destination of your choice.

Tour operators currently offering flexible change policies include Trafalgar Tours, Globus, APT, Scenic, Insight Vacations, Tauck and many more.

 

 

 

AKA Travel is an Australian owned business providing a boutique travel service to our clients including flights, tours, cruises and hotels throughout the world. AKA Travel operates under license to Your Travel & Cruise Pty Ltd, Members of Magellan, AFTA, ATAS & CLIA. The Magellan Travel group is a wholly owned subsidiary of Helloworld Travel Limited.

Your Travel and Cruise Pty Ltd has been in operation since 2003 and is a member of the AFTA Travel Accreditation Scheme (ATAS), an industry accreditation scheme that sets the benchmark of quality for the travel industry. ATAS accredited agents operate trusted, professional and ethical businesses and an ATAS accredited agent is a symbol of quality. Participants have committed to the ATAS Charter and code of conduct and been formally vetted against a selection criteria including business compliance, commercial safeguards, workforce development, dispute resolution and complaints handling processes. ATAS Accreditation # A10496.
 


 

Operating under license to Your Travel & Cruise Pty Ltd.  Members of Magellan, AFTA, ATAS & CLIA
AKA Travel operates under license and as an agent of Your Travel & Cruise Pty Ltd, ABN 69105940332, AFTA, ATAS #A10496. AKA Travel is not an individual member of Magellan, AFTA or ATAS. Magellan Travel group is a wholly owned subsidiary of Helloworld Travel. 
The AFTA Travel Accreditation Scheme (ATAS) is an industry accreditation scheme that sets the benchmark of quality for the travel industry. Your Travel & Cruise Pty Ltd is proud to be a member of AFTA (Australian Federation of Travel Agents) and ATAS. ATAS accredited agents operate trusted, professional and ethical businesses and an ATAS accredited agent is a symbol of quality. Participants have committed to the ATAS Charter and code of conduct and been formally vetted against a selection criteria including business compliance, commercial safeguards, workforce development, dispute resolution and complaints handling processes. ATAS Accreditation # A10496