British Airways is among the airlines urged by British authorities to take steps to avoid more flight cancellations. Bloomberg
British Airways is among the airlines urged by British authorities to take steps to avoid more flight cancellations. Bloomberg
British Airways is among the airlines urged by British authorities to take steps to avoid more flight cancellations. Bloomberg
British Airways is among the airlines urged by British authorities to take steps to avoid more flight cancellations. Bloomberg

Airlines told to review summer schedules after half-term chaos


Nicky Harley
  • English
  • Arabic

Airlines have been urged by the UK to review their summer timetables to ensure they are “deliverable” after weeks of queues and cancellations.

The Department for Transport and the Civil Aviation Authority said on Tuesday that announcing cancellations earlier would be better than axing flights on the day of departure.

They issued a joint letter to the aviation industry calling on companies to take every step possible to “avoid the unacceptable scenes we have recently witnessed”.

Tens of thousands of passengers have been affected by flight cancellations and long queues at airports in recent months, particularly during Easter and last month’s half-term school holiday.

The disruption has been blamed on aviation companies struggling to recruit enough staff to cope with the sharp increase in demand for travel, after thousands of jobs were cut in 2020 owing to the coronavirus pandemic.

Rannia Leontaridi, director general for civil aviation at the Department for Transport, and CAA director Richard Moriarty set out five “specific expectations” for the sector in the letter.

“We think it’s important that each airline reviews afresh its plans for the remainder of the summer season until the end of September to develop a schedule that is deliverable," they said.

“Your schedules must be based on the resources you and your contractors expect to have available, and should be resilient for the unplanned and inevitable operational challenges that you will face.

“While cancellations at any time are a regrettable inconvenience to passengers, it is our view that cancellations at the earliest possibility to deliver a more robust schedule are better for consumers than late notice on-the-day cancellations.”

They urged airlines to have “the processes and resources in place to keep consumers informed” about their rights in the case of flight disruption, such as having “sufficiently staffed call centres and user-friendly digital channels”.

They also suggested that airport chief executives create working groups to bring together airlines, ground handlers, air traffic control and Border Force to “ensure a more co-ordinated strategic approach”.

The letter comes as Oliver Richardson, the national officer for civil aviation at trade union Unite, told British MPs that a ranking of airlines based on the number of cancellations “almost exactly corresponds” with how many jobs were cut during the pandemic.

Giving evidence to the Commons’ business, energy and industrial strategy committee, he said Ryanair, which made no compulsory redundancies, was in a “different position from the likes of British Airways”, which cancelled more than 100 daily flights in recent weeks owing to staff shortages.

It cut more than 10,000 jobs in 2020.

“They did get rid of too many people in a number of instances,” Mr Richardson said.

But British Airways corporate affairs director Lisa Tremble refused to acknowledge that job cuts contributed to cancellations.

Labour MP Darren Jones, who leads the committee, repeatedly pressed her on the issue.

“Do you think there was a connection between sacking 10,000 members of your staff using aggressive fire-and-rehire tactics, and now cancelling the most flights per day?” he asked.

Ms Tremble said “it’s very complicated” and that the company “had to protect as many jobs as possible”.

Mr Jones responded: “We’ve asked you a very direct question, I think three times, and you’ve chosen not to answer it.”

Airlines have been told to review their timetables to ease summer chaos. Photographer: Chris J. Ratcliffe / Bloomberg
Airlines have been told to review their timetables to ease summer chaos. Photographer: Chris J. Ratcliffe / Bloomberg

EasyJet chief operating officer Sophie Deckers said the Luton-based airline – which has also announced a large number of cancellations – had plans in place to cope with the surge in demand for travel, but delays in new cabin crew receiving security passes “caught us by surprise”.

She said the vetting process typically took about 14 weeks, compared with 10 weeks before the pandemic.

The delay is due to difficulties many people are having in obtaining references for the jobs they have held in the past five years, with the pandemic often creating complicated employment histories.

“In many cases, people have had 10 jobs in the past couple of years,” Ms Deckers said.

“Maybe some of them were only for a couple of weeks, but we’re required to get a reference from each of those, so that’s what’s taking the length of time.

“We have today 142 crew ready and trained to go online that don’t have their ID passes.”

Sue Davies, head of consumer rights at consumer group Which?, said the aviation industry and the government needed "to shoulder the responsibility for the chaos that we’ve seen”.

She said the sector was “particularly affected” by the pandemic, but emphasised that consumers have “lost money and suffered huge emotional stress”.

She accused airlines of selling tickets when “they don’t know for sure that those flights are actually going to be able to go”.

“There’s just blatant flouting of consumer rights and a failure to put passenger interests first," she said.

The UK's Aviation Minister, Robert Courts, said it was an “exceptionally difficult time” for companies in the industry but that it was “the responsibility of the sector” to ensure it employs sufficient staff.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

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Birthday: February 22, 1956

Born: Madahha near Chittagong, Bangladesh

Arrived in UAE: 1978

Exercise: At least one hour a day on the Corniche, from 5.30-6am and 7pm to 8pm.

Favourite place in Abu Dhabi? “Everywhere. Wherever you go, you can relax.”

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c) Less than $102
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a) True
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The “Big Three” financial literacy questions were created by Professors Annamaria Lusardi of the George Washington School of Business and Olivia Mitchell, of the Wharton School of the University of Pennsylvania. 

Answers: Q1 More than $102 (compound interest). Q2 Less than today (inflation). Q3 False (diversification).

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Updated: June 15, 2022, 3:27 AM