Question 6
Peter Long
Chief Executive TUI Travel PLC
- Introduction
- 1. What are the highlights of this year for you?
- 2. How are the different markets responding to the current economic climate?
- 3. What steps have you taken to further improve the Group's business performance?
- 4. How will your strategy and business model develop over the next couple of years?
- 5. How do you see the leisure travel market developing in the future?
- 6. What are the challenges TUI Travel is facing?
What are the challenges TUI Travel is facing?
Every year we face different challenges and we deal with them, be they geo-political, natural disasters or economic. But for me there are two key challenges that we are addressing, one is carbon reduction and the second is regulation.
We operate in a high carbon industry. Although we are a tour operator, first and foremost, we also have a fleet of 150 aircraft to take our customers on holiday and, unfortunately, today there is no alternative to jet fuel. Mass production of second generation bio-fuels, which seem more viable, are still a considerable number of years off. We, therefore, have to do all we can to reduce our carbon dioxide emissions ourselves and are making a significant investment in new technology like the Boeing 787. We have committed to reducing our carbon emissions from our fleet by 6% by 2014.
We are supportive of the inclusion of aviation in the European Emissions Trading Scheme (ETS) but believe there should be a global emissions trading framework for aviation which channels monies raised from auctioning emissions allocations into environmental solutions rather than national coffers. We also don't want to see the aviation industry being hit twice, both by national governments in tax raising schemes and also by ETS.
As a tour operator we are heavily regulated and we do not have an issue with that. What we do have an issue with, however, is that competitors in the same market competing for the same customers and the same business, should be regulated in the same way and this isn't the case. We welcome the fact that the European Commission is looking at revising the Package Travel Directive which has been in place for nearly 20 years and does not take into consideration the way the leisure travel market has changed, particularly in the last six or seven years with the low cost carriers and online travel agents. Financial protection also needs to be addressed especially in the light of the number of airline failures that we have seen and may well continue to see.