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10 May 2018

BY Sophie Griffiths


Could claims companies turn their attention to airlines next?

Claims management companies could soon switch their attention to the aviation sector as the deadline on PPI claims nears and they seek other sources of revenue, a leading travel accountant has warned.

APD, air travel

As PPI deadline looms, could CMCs turn their attention to airlines?

Speaking at the Barclays Travel Forum yesterday Graham Pickett, lead Partner of travel and aviation at Deloitte told delegates that CMCs were looking to exploit Flight Compensation Ruling EU261.


He added that Europe had seen a rise in “claim farms”, and that airlines were estimated to have paid out “well in excess” of $209 million per year in EU261 claims in the UK alone.


“As the deadline for PPI looms [in August 2019] claims merchants are now moving over to airlines. Ignore these at your peril,” he added.


Elsewhere Pickett warned of the post-Brexit challenges facing travel including the skills shortage facing the UK workforce, with travel and tourism likely to be heavily affected given its reliance on EU workers.


He referenced a recent survey which showed that 47% of EU skilled workers questioned said they were considering leaving the UK in the next five years.


“We’ve never seen anything like that,” Pickett said. “That’s a challenge for the industry. And when there is a labour shortage, costs go up. That’s a challenge which Brexit has definitely brought us.”


It came as Pickett highlighted how Brexit remained the key cause of uncertainty and worry for households. He added that with sterling still below the pre-referendum level, the UK continued to be a “value for money destination”. But he noted: “The UK is perceived to be expensive compared to France and Italy and has the lowest growth of GDP in Europe”.


Leisure consumers are subsequently feeling the pinch, Pickett said, adding: “Consumers are forced to cut down on their discretionary spending as essentials get more expensive due to high inflation and lower wage growth”.


Elsewhere Pickett examined the rise in popularity of new destinations, with Turkey seeing the biggest growth in tourism numbers following its rebound last year.


He noted that the southern Mediterranean, including Cyprus and Croatia, had also performed better in 2017, and in 2018 he expects to see growth in alternative destinations “as travellers look for unique experiences and learning new skills”.


He highlighted that both city breaks and beach holidays were down in popularity compared with four years ago, while cruise and dynamically packaged holidays had increased.


“New experiences such as gastronomy and wine tasting are what customers are looking for in 2018,” Pickett added.

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