Examination of Witnesses (Questions 595
- 599)
WEDNESDAY 21 JUNE 2000
MR RICHARD
ROBERTS AND
MR EDDIE
REDFERN
Chairman
595. Good afternoon, gentlemen. May I welcome
you to the Committee and ask you firstly if you would identify
yourselves for the record.
(Mr Roberts) Good afternoon. My name is Richard Roberts.
I am the Commercial Director of Air 2000.
(Mr Redfern) Good afternoon. I am Eddie Redfern, the
Licensing Manager of Air 2000.
596. Thank you very much for coming. May I ask
you whether you would like to make a few opening remarks or if
you are quite happy to go to questions.
(Mr Roberts) If I may say a few opening
words. Air 2000 welcomes the opportunity to give evidence to this
Committee on the UK/US air services. It may be helpful, by way
of an introduction, if I give you an outline of Air 2000 and our
particular interest in these discussions. Air 2000 is the in-house
airline of the First Choice Group of companies, and we operate
27 aircraft comprising four Boeing 767s, 14 Boeing 757s, five
Airbus A321, and four Airbus A320 aircraft. We employ something
like 2,500 people, which is around one and a half per cent of
the total of employees in the United Kingdom aviation. Our turnover
during our last financial year, which was 1999, was something
slightly under £500 million. We made a profit of around £55
million before tax. Our sphere of operations is predominantly
Europe, North America, the Caribbean, South America, plus the
Middle and Far East. We operate both schedule and charter services
with significant cargo carryings on both types of service. Our
operations are predominantly from Gatwick and Manchester but we
also have aircraft based, which regularly operate flights, from
Cardiff, Bristol, Stansted, Birmingham, East Midlands, Newcastle,
Belfast and Glasgow airports in the United Kingdom. We also operate
a number of specialist around-the-world charter flights for a
United States tour operator; and in this coming winter we intend
to operate 13 such flights. During summer 1999 the First Choice
Group tour operators accounted for 14 per cent of the UK/US market,
and 38 per cent of the long-haul inclusive tour market, the Caribbean,
and 22 per cent of the inclusive tour market to Mexico. It is,
therefore, significant not only for Air 2000, but for the industry
as a whole and the United Kingdom carriers. Within the last six
weeks our group have announced a strategic alliance with a United
States cruise line, the Royal Caribbean Cruise Lines, and we have
also announced the purchase of European tour operations through
the groups of Ten Tours, which operate from five European countries
outside the United Kingdom. In addition, we have purchased the
travel division, in the last seven days, of Barcelo, which has
interests in Spain and South America. In addition to this activity,
Air 2000 regularly provides wet- and dry-leased aircraft to other
carriers around the world, some of whom require that we carry
out operations from and to and into the USA. My colleague here,
Eddie Redfern, has been part of the United Kingdom delegation
on UK/US air services since 1996, representing the interests not
only of Air 2000 but also the passenger charter sector of this
industry. Our interests in the negotiation is to secure a commercially
fair and balanced and reciprocal regime. We would be very pleased
to answer your questions.
597. Could I tell you some ground rules. When
the two of you agree, perhaps you would not chip in, but, if for
any reason there is a mild difference between two departments,
you would then indicate where the problems arise. If you would
also remember that the microphones in front of you are meant to
record your voices but not necessarily throw them. There is a
difficult problem with sound in this room. May I ask you to begin
with: what progress do you think has been made in the air service
negotiations in the past fortnight?
(Mr Redfern) I think the United States side came over—
I was rather disappointed that my view of the progress was less
than we had anticipated.
598. In what sense, Mr Redfern?
(Mr Redfern) I was hopeful that the United States
would be a bit more forthcoming than they had been at the last
round of talks.
599. What did you base that on?
(Mr Redfern) That was based on discussions with the
officials at the Department of Transport and briefings we had
on the Government negotiations in the intervening period.
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