Transaero, Russia's biggest private airline files for bankruptcy

Russian Prime Minister Dmitry Medvedev has given the green light to begin bankruptcy proceedings for Transaero airlines, according to sources cited by online newspaper Gazeta.ru. Negotiations on a takeover of Russia's second-biggest carrier by Aeroflot have been deadlocked. According to sources, Aeroflot took a hard line refusing the Transaero consolidation.

“The process has taken the toughest turn,” the media cites a federal official present at the meeting as saying. "The bankruptcy will proceed according to Russian law,” he added.

The technical details of the bankruptcy procedure are currently being worked out, another source told the newspaper.

"There are two considerations: first, who will inherit Transaero's [$4 billion - Ed.] debts and how much of them, second, how it will affect the airline's smaller creditors, the passengers and airline employees," the source said.

Russia's federal aviation service has told Transaero to stop all ticket sales, TASS reports.

According to the Russian Interfax news agency, all the negotiators have acknowledged bankruptcy as the only possible way out. A source close to the deal told Interfax there are three reasons for that.

First, the airline's shareholders have not been able to consolidate 75 percent plus one share that were expected to be transferred to Aeroflot.  Secondly, Transaero creditors refused a debt restructuring model, proposed by Sberbank that is overseeing the deal.

And the final reason was the Russian Ministry of Finance’s reluctance to give state guarantees of 85 billion rubles ($1.3 billion) for the restructuring of Transaero, which  was promised in the early stages of negotiations.

The banks are opposed to the bankruptcy, but Aeroflot says they should have better assessed the risk when they gave loans to Transaero. According to Aeroflot, the airline had an extremely risky strategy in staying afloat.

Transaero is in such financial straits that it can’t refuel its planes, which is now done by Aeroflot. It said it would stop refueling Transaero planes on September 30, but First Deputy Prime Minister Igor Shuvalov asked Aeroflot to move the deadline to midnight October 2, Russian business media RBC reported.

Shuvalov has promised the government would help the 10,000 Transaero employees who may lose their jobs as well as passengers that had pre-purchased tickets.

At the beginning of September, Aeroflot said it intended to acquire a 75 percent stake in Transaero, which has about a $4 billion debt. Aeroflot's main shareholder is the Russian state, which owns 51 percent stake in the carrier.

Breastfeeding mums stage a protest at Claridge's hotel in Mayfair

UK mothers have staged a mass “nurse-in” at London’s five-star Claridge’s hotel in Mayfair, after a woman was told to cover up while breastfeeding her child at the property.

The disgruntled protesters want the hotel to issue an apology and change its policy on breastfeeding after a woman was told to cover her baby’s head with a napkin while dining at the hotel’s restaurant, to avoid offending other patrons, Sky news reported.

According to the paper, Claridge’s later said it “embraces” breastfeeding but wants mother’s to be “discreet toward other guests”.

The UK organisation Free to Feed launched the breastfeeding protest outside the Mayfair hotel last week, which then sparked a national debate with one UK political figure, Nigel Farage, saying mothers could “sit in the corner” in restaurants to avoid upsetting people.

Matador community the biggest travel site is shutting down all it's blogs

Who doesn't know the Matador Community on the net?

How many times we spend hours and hours reading about travel tips, where to go and what to do when travelling abroad? 

I am a traveller not a tourist was their motto but not any more. The Matador Community is shutting down. 

Bellow is the email that we received from Ross Borden CEO of  Matador.   

"Dear Matadorian,

First, I'd like to personally thank you for the stoke and energy you have put into our community over the years. We have grown from our (very) humble beginnings in 2006 to become one of the world's largest travel publishers and one of the Web's biggest travel sites, now reaching more than 6 million people per month. 

Along the way we have evolved away from a "social network for travelers" and towards a professional publication working with hundreds of talented journalists from around the globe. 

We also launched our travel journalism education platform at MatadorU...we were excited to launch 4 new courses last week - and we're offering everyone a $150 discount if they enroll now before Dec 1st. Learn more here.

We're now working on a number of new projects and products that we think you'll love - powerful apps and content that will help you explore the world better and document your travels better too. And in order to launch these new products we need to shut down old ones that are fast becoming outdated, obsolete, and sadly, under siege from SPAM. 

So I am writing to you to give you a heads up: on December 5th 2014, we will be closing the old Matador community profiles and shutting down all of the blogs. If you have content on these sections of the site that you want to save, you have until 12/5 to migrate or back it up somewhere else.

Ross Borden
CEO, Matador"

Hajj 2014: Mecca hotels see a drop in bookings

Hotels in Mecca are cutting room rates for stays after Ramadan as a reduction in pilgrim quotas and concerns about the Mers virus hit visitor numbers.

Saudi Arabia is expected to issue a similar number of visas for Haj pilgrims as last year as it continues renovation work on the Grand Mosque.

Last year, 1.3 million international pilgrims and 600,718 domestic pilgrims performed Haj, down from 1.7 million and 1.4 million respectively in 2012.

The Haj dates this year fall between October 3 and 9, but the season extends between September 20 to October 15.

In the kingdom, 282 people have died from Middle East respiratory syndrome, or Mers, since it was first detected in September 2012, according to a health ministry survey announced last month. As of last week, the number of confirmed cases was 688.

Tour operators expect about 1.5 million international and domestic pilgrims this year.

Haj quota cuts and fear of Mers have had a strong negative effect on the tourism industry, primarily affecting the religious cities of Mecca and Medina, and to a lesser extent the Red Sea city of Jeddah, said Rashid Aboobacker, a senior consultant with TRI Hospitality Consulting.

“Some of the luxury hotels are reporting a further decline in demand from independent travellers, such as wealthy individuals, this year presumably due to the Mers virus scare, which hit the country earlier during the year,” he said. “This year, hoteliers in Mecca are expecting further pressure. Although tourism operators had projected huge potential losses due to the government visa cuts, we believe the effect may have been lower due to the increase in Umrah visas during the off-peak periods,” Mr Aboobacker said.

During the first five months of the year, average room rates in Mecca were down by 10 per cent to 15 per cent compared with the same period last year, according to TRI data.

Haj quota cuts have resulted in significant losses, according to Khalid Saad Al Kalashany, the revenue manager of Mawasim Tours. The Mecca-based company organises Haj and Umrah tours.

“We sell the rooms for very low prices and we still have a lot of rooms empty that are not bought,” he said. “This year is poor, so we have had around 90,000 [Haj and Umrah] pilgrims.” That is down from 150,000 pilgrims last year for the operator.

Mers fears have also kept away pilgrims, especially those in the luxury category, he said

At the 700-room Mecca Hilton, rooms are available for 600 riyals (Dh587) at the beginning of September. The same rooms start at 1,950 riyals in October.

“There are a number of international and local chains of hotels that market competitive rates to attract business,” said Mahmoud Mokhtar, Hilton’s vice president of operations for Saudi Arabia.

Saudi Arabia had 35,587 rooms under development last month, which would eventually increase its overall room count by 60 per cent, says the consultancy STR Global.

International arrivals are expected to recover in 2016 when infrastructure improvements are completed, Mr Mokhtar said.

Read more: http://www.thenational.ae/

Southern Cross Travel went bankrupt

One of the largest travel agencies in Russia, the Southern Cross Travel, announced last night that they went bankrupt. 

On the website of the Southern Cross Travel there was the following message this morning.


IMPORTANT INFORMATION FOR TOURISTS AND TRAVEL AGENCIES
Due to our inability to meet its obligations to the tourists and customers on contracts sale of the tourist LLC "Southern Cross Travel" is forced to announce the suspension of its activities. The suspension of activities is due to a strong decline in demand for tourism product on the background of the bankruptcy of a number of other largest tour operators.


According to info released by the president of the Association of Greek Tourist Enterprises, Andreas Andreadis, right now in Greece there are more than 3,600 Russian tourists who had traveled with Southern Cross Travel.

Mr. Andreadis said that this new incident highlights the urgency to create proper measures and policies in order to handle this crisis and facilitate the return of all the Southern Cross Travel Russian tourists back home.  

At the same time he said that the vicious cycle of bankruptcies of Russian travel agencies have not closed yet. Based on initial estimates, the Russian tourists that have moved during this period abroad by the Southern Cross Travel can reach 10,000 with the possibility to be a lot higher. 

The Association of Russian tour operators felt that many thousands of Russian tourists will see their forthcoming trips cancelled as they will not be able to fly abroad with Southern Cross Travel.  

The Russian agency attributed the bankruptcy to the sharp drop in tourism demand.  

The bankruptcy of the Southern Cross Travel comes after another major Russian Tour operator went bankrupt (Solvex Tour) 4 days ago, which left in Greece around 3000-4000 tourists.  

Already the Russian embassy in Greece has begun repatriating Russians tourists with flights departing or planned to depart from Heraklion, Rhodes, Zante, Kos, Corfu, Kavala and other Greek holiday resorts.


From 16th of July at least 13 major tour operator and travel agencies have gone banckrupt in Russia.

Southern Cross Travel website

Russian Tour operator Solvex suspended activities

One of major tourist companies in St. Petersburg Solvex-Tourne suspended activities on Monday, the Russian Union of Tourism Industry reported on Monday, referring to the company’s head Tamara Khaletskaya.

About 9,000 clients of the company are abroad now. Most of them stay in Greece and Bulgaria. About 8,600 clients have paid for tours due within several next months, even on Christmas.

Medvedev to hold conference on protecting tourists from unscrupulous tour operators

Russia’s Orenburg Airlines announced earlier it may cancel from September 8 serving Solvex-Tourne, as the tourist company had informed the carrier it might suspend its activities.

The Union of Tourism Industry says tourists staying in Bulgaria will not have any problems, as the company undertook the accommodation expenses. “Besides, the suspended activities will not affect tourists, who plan to travel to Bulgaria up to September 26 by Bulgaria Air flights. Those flights are paid for, and accommodation is covered by Solvex Bulgaria,” the Union’s representative Irina Turina said.

Three insurance companies are bearing financial responsibility of 450 million rubles (about $12 million) for the tourist operator. “Thus, a compensation for unused tours will make 150 million rubles (about $4 million),” the representative said. “As not all the tours are fully paid for, tourists will be able to receive, we estimate, 70-80% of the money paid for the trips.”

The tourist company’s head Tamara Khaletskaya said the complicated political and economic situations have lowered the demand for tourism, and the chain of bankruptcies in the tourism market had affected trust for the business, and thus sales slumped.

“Unfortunately, not all foreign counterparts agreed to optimize programs, did not cut on commitments at hotels. As we had to observe the obligations in filling hotels, we could not cut on air tickets. Thus, with the lack of sales, our debts started growing,” she said explaining why the company suspended its activities.

The Union said the Solvex-Travel Company working in Moscow continues its operations without changes, as it has only the same brand with the company in St. Petersburg.

Situation in the Russian tourism industry

Sovex-Tourne is a part of the Solvex Group of Companies, which is represented in St. Petersburg, Moscow, Kiev, Minsk and in Bulgaria’s Sofia and Varna. The Solvex brand has been in the market for over 20 years. Solvex-Tourne is a tourism operator in international and domestic tourism, sightseeing, ski and leisure tours. Solvex-Tourne has been serving annually dozens of thousands tourists to Greece, Bulgaria, Cyprus, Turkey, Egypt, Israel, Hungary, India, Sri Lanka, the UAE, Italy, Spain, Estonia, Lithuania, Latvia, the Czech Republic, Montenegro, Croatia and Tunisia. The company’s revenues in 2013 made 4.55 billion rubles (about $123 million).

Association of Tour Operators of Russia: more tour operators may quit market soon

In summer 2014, Russia’s tourism sector has witnessed a chain of bankruptcies. From mid-July, 16 companies closed due to financial problems. Most affected tourists were clients of Neva (17,000) and Labirint (40,000 people). The companies explained the situation by the sanctions introduced by the EU, currency rates’ fluctuations and banned foreign trips for law enforcers. However, experts said the tourism companies, which had been working as financial pyramids, simply wanted to escape responsibilities. Prime Minister Dmitry Medvedev ordered inspections and was expecting suggestions on reforming the sector.

In 2013, Russia ranked third among European countries, where citizens made most trips abroad: 32 million trips, the World Travel Monitor reported. Most Russian tourists visited Turkey (4.3 million), Germany (2.1 million) and China (2 million). Of all the trips Russians made, 27 million were private trips, and 12.5 million trips were targeted at spending time by the sea. Sightseeing tours attracted 3.8 million tourists, and traveling the world - 1.3 million. About 51% tourists spend around 1,200 euro per person, which is comparable with tourism expenses of most Europeans

Airfasttickets suspended by international air transport authority

Airfasttickets has been the target of Greek and international media accusing the fast-growing online travel agency for unfair competition and bringing to the spotlight complains that include non-refunded tickets after they were cancelled by the company.

Amid the high tourist season, Airfasttickets has been on the spot of attention, after several Greek electronic travel agencies such as pamediakopes.gr, viva.gr, airtickets.gr and travelplanet24.gr, filed a suit against the company for unfair competition practices and selling tickets at lower than wholesale prices.

The Greek-owned company was recently awarded by the Athens Chamber of Commerce and Industry as the most rapidly developed SME in Greece. However, the founder and alleged chairman of the company, Nikos Koklonis, did not attend the ceremony.

Furthermore, the International Air Transport Association (IATA) has blocked the company from all ticket services in Greece, Germany and the United Kingdom saying AirfastTickets owes money to the Airline companies.

“Thousands of holidaymakers who booked with a discount online travel agent are being urged to check directly with airlines that their tickets are valid,” warned BBC.

Airfasttickets has definitely  created a brand after running a very aggressive advertising campaign in key places around the world. In case you visit the New York City subway or the London Cube, it is impossible not to see one of the company’s advertisements. The dynamic startup company has made its appearance in the market two years ago, by offering fares at the lowest prices in the market.

The company’s about statement speaks to a traveler’s heart noting that the founder himself was an unsatisfied customer of travel agencies and decided to start Airfasttickets.

“One day in 2009, Nikos Koklonis, was planning a trip. After spending many tiring hours researching and booking his trip, Nikos had become frustrated with the whole process. Filled with passion, he vowed to create a better way. So on the flight home with only a napkin, a pen, and a dream, he plotted a travel revolution that would empower consumers and businesses across the world. Soon after, he founded AirFastTickets, and the adventure had begun…”

And the adventure continues…

Greek newspaper “To Vima,” in a critical article that poses serious questions on the way Airfasttickets operates says the company has offices in the United Kingdom and the United States.

“In the US however, there are three different companies under the same name (airfasttickets Inc.) in three different states: Florida, New York and Texas. It seems though that there is no evident correlation among them and no correlation with the UK airfasttickets Inc. company. This means that—in legal terms – the term ‘group of companies’  is false.”

The company’s initial share capital is 60,000 euros and from 2012 there has been no recorded capital increase, which raises the question as to how the company would be listed in Nasdaq, as it has been announced.

Airfasttickets sells tickets in very low prices, lower than any other rival company and often lower that the airlines’ websites. After IATA blocked its access, Airfasttickets continued to make ticket bookings through other travel agencies. The outstanding debt of the company to IATA is estimated at more than 45 million euros. If this debt is not paid back, then IATA will request the “freezing” of all its bank accounts.

IATA has issued a warning to all travel agencies in the UK to avoid transactions with airfasttickets, after several passengers complained that they did not receive a refund when they had to cancel their tickets.

Moreover, Greek courts have ruled in favor of the Greek travel agencies’ suit and have issued a temporary order that suspends airfasttickets activities in Greece.

A search in online forums shows customers posing major complains about the company, often talking of ticket cancelations after they were booked and not being given the advertised prices by the site.

A Greek Reporter employee trying to book an airfare to New York was not able to buy the advertised ticket price after 16 failed attempts to book the ticket. The site would always give out a warning and offer a much higher price to the user after clicking the ‘buy’ button. An Airfasttickets customer service representative said that this was caused because the system is updated every 15 minutes by the airlines and within that time window this price difference may occur. Ten hours later the website was acting in the exact same way.

On the other hand there are also happy clients of Airfasttickets, including a frequent traveler from London to Athens who said that ” I am very happy with them. I have been using the site for the past year and never had a problem.”

Greek Reporter has contacted the company’s USA office and we were told that Airfasttickets will offer us a statement on the matter within 24 hours since the company’s CEO was in Greece and out of reach.

Source: Greek Reporter