The recent UK budget is excellent news for the student accommodation market. The government has announced the allocation of an extra £250 million, to create an additional 20,000 university places for students. With the need for quality accommodation already exceeding the supply, this news will increase demand for the existing space. As supply/demand ratios are a major factor in driving prices, this is good news for investors in the student accommodation sector.

Brandeaux was a pioneer in providing private student accommodation in the late 1990s, and is now one of the largest investors in the sector. The UK-based Fund has a portfolio across with more than 15,000 beds, in residences located in 18 major university towns and cities. Incredibly, the Sterling Fund which was launched on the 15 June 2000 has never posted a losing month, and has achieved an average growth of 9.7% p.a. since inception.

Student Accommodation Funds

The fund objectives are to deliver consistent annualised positive returns of 8% to 10% over a rolling three to five year period while maintaining a profile of low volatility performance.

Brandeaux’s student accommodation portfolio of residences is already over 82% booked for the coming 2010/2011 university year beginning late September, so it is well on track to maintain 100% occupancy. With net rental increases for 2010/2011 up nearly 8% over 2009/2010 prices, Brandeaux Student Accommodation Fund (£) looks set for another year of top-of-target performance.

The US$ denominated Brandeaux Student Accommodation Fund which invests solely in Brandeaux Student Accommodation Fund (£), has a currency hedge to mitigate the effect of exchange rate fluctuations between US$ and Sterling.

Another way of entering the Student Accommodation market is to spread your investment over a wider region, so as to reduce any volatility or risk. The Coral Student Accommodation Fund offers investors the opportunity to participate in the growing sector of student accommodation by investing not in the buildings themselves, but in the companies that own and manage the properties. This approach is known as a ‘Fund of Funds’.

As such, the Coral Student Accommodation Fund invests in established UK schemes and providers, while also benefiting from the enormous opportunities, emerging in Western Europe. By spreading exposure to several established specialist providers, the fund aims to maximise returns, and minimise dependency on one single fund or provider.

The fund was launched in March 2009 and has attracted a lot of investment during its opening year. Returns have ranged from 8% in the Euro fund, 9% in the dollar fund and 10% in the sterling fund. This is right on the target of 8-10% p.a.

With security for our money on everyone’s mind, it’s important to know where a fund is based and how it’s regulated. The Coral Student Accommodation Fund is based in Luxemburg. Luxemburg offers investors the security and knowledge that the fund is highly regulated, and is monitored. The custodian for the Fund (where the money is held) is Deutsche Bank Luxembourg: again regulated.

In conclusion, for those investors looking to access a non-traditional package, investment in the Student Accommodation sector looks very inviting. The sector is non-correlated to the traditional stocks and bonds market that has seen so much volatility in the past few years, which means that while the rest of the market might be a cause for concern, this sector would seem to have a bright and steady future ahead.

George Lindsay, Wealth Manager at Expat Solutions

Posted under Lifestyle, Uncategorized

When it comes to airport quality, the sky’s the limit.Let’s look at how Thailand fares in the overall aviation scheme of things.

Airports Council International (ACI), the world referee of all things to do with aviation support services, regularly publishes a list of the best airports both worldwide, and regionally. Phuket Airport didn’t even make it onto any list, whilst Suvarnabhumi in Bangkok languishes in mediocrity, well down the field. This casts serious doubts upon Thailand’s grandiose plans for becoming a regional aviation hub. Ominously, poor neighbour Hyderabad GMR Rajiv Ghandhi International Airport topped their category, which should be a wake-up call for our Airports Authority.

In a previous article we catalogued the considerable improvements in services and infrastructure which both the national facilities have achieved of late, and there is no doubt that these are substantial. However, the ACI listings are dominated by other Asian airports, our regional competitors.

First though let’s give credit, where credit is due. In 2007, it’s first full year of operation, Suvarnabhumi was ranked at a miserable, but deserved, 48. The following year it made it to 38, and last year, 24. Steady progress. Let’s hope that the powers-that-be can sustain the momentum. Their own stated objective is to make it into the world top ten.

In the past year, Suvarnabhumi has replaced the un-upholstered, ugly, cold, uncomfortable grey metal seats that should never have found their way into a 21st-century international facility. However, there are still no free internet services at departure gates, and there are only a total of 9000 baggage trolleys, available for use by passengers. The shortage of trolleys has been a major complaint from day one – apparently large numbers were purloined – perhaps by local supermarkets.

The best airports in the world according to the ACI survey are, in descending order of excellence:
Incheon, in Seoul, South Korea
Singapore Changi Airport
Hong Kong International Airport
Beijing Capital International Airport
Hyderabad Rajiv Ghandi International Airport (RGIA).
Hyderabad’s fifth place (they also headed the ‘5 to 15 million passengers per year’ group) came as a particular surprise, because the sad fact is, that Indian airports have been a disgrace for many years. Until recently, even Delhi Airport barely registered on the scale of adequacy, never mind distinction. The last time I transited this airport, its ‘new’ terminal was a poorly built prefabricated structure, which was a pitiable gateway to what has become one of the world’s burgeoning economies. So the Hyderabad success story does show what can be achieved, with adequate finance, sound planning and management. Suvarnabhumi and Phuket please note.

In the ‘over 40 million passengers per year’ category, (this is the category applicable to Suvarnabhumi) this is how things stacked up. Hong Kong was first followed by Beijing, Denver, Dallas, Fort Worth and Houston. In the ’25 to 40 million passengers per year’ category, Incheon was first; then came Singapore, Tokyo Narita, Kuala Lumpur and Shanghai Pudong. The Chinese airports, by the way, are monsters. I attended the opening of Beijing Capital International Airport three years ago. Its size and the overwhelming flow of humanity, unbelievable.

The latest ACI survey also shows that with determination an airport can be improved pretty quickly. Here’s a listing of airports which have managed to rise up through the rankings very rapidly: in Africa, Cairo; in Europe, Pont Delgada; in the Middle East, Abu Dhabi; in Latin America, Cancun and in North America, Cleveland.
So there’s hope for Phuket and Suvarnabhumi to continue to improve, but there’s no room for complacency. What is needed is consistent management, a dedication to customer service, robust policing of ancillary services and a strong dedication to achieve excellence.

There are many questions asked by curious aeroplane enthusiasts. In the months to come we’ll be trying to answer some of these. However, a word of warning, the answers can be chilling. If you’re presently sitting in a departure lounge you might be advised to turn to the next page, right now.

Question: “Can a standard Boeing 747 fly upside down?”
The short answer is, “Yes, but probably not for very long.” And it’s all theoretical, as nobody’s ever tried it. 747s are massively engineered, and Boeing’s safety record over many years, attests to this. Quite apart from the practical considerations of what would happen to the animate and inanimate contents of the fuselage, it’s more a matter of aerodynamics, than structural integrity. Whether it’s a barrel roll or looping the loop, everything (and I use the word advisedly) would depend on the pilot’s ability to maintain sufficient forward momentum during the manoeuvre. Failure to do this will result in the ‘fasten seatbelts’ signs coming on, followed by CWT – a harmless sounding abbreviation for ‘contact with terrain’.

Enjoy your flight.

Alastair Carthew, a Phuket based writer and communications advisor

Posted under Lifestyle, Travel & Tourism

As more and more travellers choose to beat a path to Thailand, the first pressures manifest themselves at the points of entry – our international airports. Learn what’s being done to keep pace with it all.

The Thai cabinet’s approval in principle of a five year plan (2009-2013) for the development of Phuket International Airport, is a welcome commitment towards growing this vital link in Phuket’s tourism infrastructure.

Without an efficient airport to handle the increasing number of airlines flying directly to Phuket, the island could quickly lose out to competitors like Bali, which is closer to Australia. Phuket’s success as a tourist destination, therefore, depends heavily on the availability of landing slots.

To put this into perspective, in 2009 Thai Airways announced direct flights from Hong Kong; the tiny Happy Air took to the air; Firefly, a subsidiary of Malaysian Airlines, returned to the Phuket market; V-Australia, an offshoot of Virgin Blue from Australia, started direct flights; Air Asia continued to expand its network into Phuket, including designating it their second Thailand hub, and Jetstar from Australia announced an alliance with Air Asia. All this adds up to more availability and choice for the traveller.

The 5.7 billion baht makeover of PIA by the Airports Authority of Thailand was announced well over a year ago, but the approval only came through in December. In the meantime, however, it’s evident that the AOT hasn’t waited around for the go ahead. There are already noticeable improvements being implemented at the airport. In the future it will be vital that the makeover is concentrated on basic infrastructural projects like efficient safety and security standards, better immigration interfaces, low-cost carrier facilities and improved car parking; whilst creating an environment within the terminals themselves which is comfortable and efficient.

There’s a worldwide trend amongst airlines to focus on improving the ground services they offer given that transiting and embarking and disembarking from airports today can be stressful and time consuming, because of the stricter security measures.

For the transiting and embarking passenger, in particular, this should include availability of goods and services at reasonable prices, not the outrageous gouging that has become the rule in airports around the world. Terminals need to offer free internet, amusement areas for children, comfortable lounges and, above all, staff who are willing to help. When it comes to customer service Thailand has an advantage because her people are by nature, welcoming and charming. However, this needs to be backed up with sound training programmes.

This year the airport is expected to handle around 6.8 million visitors rising to 12.8 million by 2018. This is a realistic figure given the continued expansionary trend of air traffic to the island. One facility that will not be expanded is the runway, at least not yet. It can comfortably handle a fully laden Boeing 747 Jumbo jet. The only downside is the placement of the runway alongside the ocean. This can project some nasty squalls and winds across the runway from time to time.

PIA is categorised as ‘unranked’ in the Skytrax annual survey of airports. However, this is more a reflection of its size, than the quality of service. Nevertheless, most objective observers would still concede that PIA still has got some way to go to meet the level of services that passengers demand.

Because of its Asian location, PIA has to stand regional comparison with the best five-star (Skytrax ranked) airports in the world – Incheon, Seoul, South Korea, Hong Kong and Singapore.

Suvarnabhumi International Airport in Bangkok has a three-star ranking, but it too has made considerable progress in improving the basic facilities that were lacking because of opening prematurely. The airport is now able to handle around 43 million passengers a year with a projected maximum capacity of 45 million. The government is already considering doubling this, to handle future demand.

Just for the record, Skyscanner flight search, an internet portal that covers the aviation industry, lists the airlines that fly to Phuket, as follows: Thai Airways, Thai AirAsia, Malaysian Airlines, SilkAir, Singapore Airlines, Korean Air, China Southern, Asian Airlines, Air Berlin, Transaero Airlines, Cathay Pacific, Finnair, Dragonair, Shanghai Airlines, Condor, Jetstar, V Australia, China Airlines, Tiger Airways, Ethiad Airways, Lufthansa, Air Canada, Austrian Airlines, SAS, ANA, SkyStar Airways, Gulf Air, Virgin Blue, Air France, Firefly, United Airlines, Air New Zealand, TUIfly, Qantas, Caribbean Star and Blu-express.

Alastair Carthew, a Phuket based writer and communications advisor

Posted under Lifestyle, Travel & Tourism

Readers may recall my August article on school and university fees planning, in which I emphasised the need for parents to start saving to finance these events, as soon as possible. I make no apologies for writing about this again as I see it as a very important part of any parent’s overall financial planning strategy. Rather than repeat myself, I asked one of my client’s who is a parent with two children, to write on the topic from his perspective. Here is his account.

“As a parent with an elder child now in her sophomore (second) year at college in the USA, and the other starting college in two year’s time (all being well), I’m writing this short article to share my experience of the benefits of making provision for educational costs, early on.

“In August 2008, my daughter was fortunate enough to get accepted by a very good design college in New York City, to begin her undergraduate studies. Her four years of full time studies will leave me with little change from US$300,000; a substantial sum even for professional working parents in senior positions. I’m very fortunate to be able to fund her undergraduate studies, and it’s all because I had looked ahead and started a savings plan for her in 1993. Having done some calculations on the projected costs, I took out a plan in August 1993, paying GB£700 each month, over a 15 year period. In September 2007, having contributed for more than 14 years, I decided to cash in the plan. It had grown very nicely to over GB£243,000 (US$450,000 at the exchange rate ruling then). I’d achieved a growth of nearly 120% on my investment, after the deduction of all fees and charges. From this, I made provision for my daughter’s college fees.

“In May 1998 and September 1999, I signed up another two savings plans with monthly contributions of US$1,000 and GB£600, respectively. The US dollar plan will mature in March 2011, and the GB pound plan, on a shorter ten year tenure, matured in September 2009. Despite the market turmoil of the past year, the latter plan still gave me a return of nearly 100%, after deduction of all charges and fees. My original contributions of GBP 72,000 had grown to over GB£ 143,000, at maturity. I’m projecting the value of my US dollar plan’s value to be over US$300,000 on maturity. (Its current value is over US$265,000). This is a growth of nearly 100% of my contributions over the 13-year period, after deduction of all charges and fees. The funds from these two Plans are earmarked to finance my son’s undergraduate studies which will begin in two year’s time.

“I’ve clearly benefited from having multiple savings plans with regular monthly contributions over an extended period of time (10 to 15 years in my case). The growth in their values will effectively fund the costs of tertiary education for both my children, and I still have my original investment – a nice sum! During this extended period I’ve witnessed two market booms and slumps, where I’ve seen the paper value of my plans grow as high as 200% and drop as low as 30% of gross contributions.

“Regular contributions have allowed me to weight average out the adverse impacts of market fluctuations, on my investments. I believe this is a critical factor contributing to the growth in values which my plans have delivered. It’s important that one takes a long term approach and sees them through to maturity (or very close to maturity). For this reason alone, I’d strongly recommend starting with a monthly contribution amount that is comfortably within one’s means, and to start as early as possible. As your financial situation changes and your ability to make larger monthly contributions increases, you can up your contributions or take out a new plan, if necessary (as I’ve done over the years)”.

This particular client clearly sees the importance of financial planning and what can be achieved with a little discipline. With foresight he’s been able to afford his daughter the best education available because he planned for it in advance. Had he not done so, then his daughter’s choices of a higher education institution may have been limited. Planning ahead and saving on a regular basis makes sense, as finding the annual fees out of earned income is beyond most parents’ financial capabilities.

George Lindsay, Wealth Manager at Expat Solutions

Posted under Investments & Financial Opportunities, Lifestyle

Looks Pretty Good Compared to Some Countries

Okay, from time to time, we all have complaints about airlines, airports and all things aviation. This is usually based on our own experiences, a bad in-flight meal, the galley running out of booze, having to climb over someone to get to the toilet or rude and indifferent staff.

But stop complaining. It could be worse. You could be relying on service from a national carrier operated by any of the following countries: North Korea, Sudan, Afghanistan, Cambodia or Rwanda. All of these airlines are banned from flying into the European Union because of doubts about their safety.

Then throw in carriers from Angola, Benin, Congo, Equatorial Guinea, Gabon, Indonesia, Kazakhstan, Kyrgyzstan (a landlocked country in Central Asia), Sierra Leone, Sao Tome and Principe, Swaziland and Zambia to name but a few. In fact, a total of 228 companies are banned. This makes for a pretty sorry picture. Maybe Thailand isn’t so bad after all.

Of course almost all of these countries are in Africa and none, apart from Siem Reap Airways International from Cambodia, fly into Thailand and then only into Bangkok and not Phuket. Also, of course, the European Union ban is a bit academic for most of the airlines affected since they don’t have routes into Europe anyway.

What the ban does underscore, however, is how important safety considerations are to the airline industry. This year, three new countries were added to the list of banned airlines – the African countries of Djibouti, the Republic of Congo and Sao Tome and Principe.

Thailand is not entirely without a history of such bans either. At one stage a couple of Thai airlines were grounded because of safety concerns. However, Asia, with the exception of Cambodia and some airlines in Indonesia, has been improving its record compared to Africa, the former Soviet states and some Middle Eastern countries.

At least the countries mentioned here have airports. Imagine living in a country where there is no airport! Well there are five of them. Leading the way is the Vatican City, which is plum in the centre of Rome. Then there’s Monaco, but it does, however, have a heliport for all those billionaires to drop by. Liechtenstein, likewise. Its nearest airport is Zurich in Switzerland. Andorra near Spain is the largest country not to have a facility. Its nearest airports are Girona in Barcelona and Toulouse in France. Finally there’s tiny San Marino in Italy, which also boasts only a heliport.

So it just goes to show that you can run a country successfully without an airport. Of course, Phuket’s tourist industry would be severely constrained without our airport and to be fair it’s a facility which is improving customer service and facilities virtually every month. We’re getting a VIP air terminal, a single-engine aircraft strip and, yes, you guessed it, we now have a helipad (not a heliport) about three to four kilometres south of the airport. Of course Phuket also has its own mobile helipads, those on the larger super yachts that moor off places like the Amanpuri Resort in Surin during the high season.

Finally, Phuket Airport is looking to welcome its sixth millionth visitor. It just missed out last year because of the airport closure and other political unrest in Thailand.

However, Phuket Airport has a long way to go before it matches the busiest airport in Asia, Beijing Capital International, with a throughput of almost 37 million people from January to July this year.
Suvarnabhumi in Bangkok was the busiest airport in the region, handling 22 million passengers over the same period. This, in fact represented a drop of 9.4% over the same period last year. This was the biggest drop ‘year-on-year’ for any international facility in Asia. Suvarnabhumi has certainly had more than it’s fair share of problems. Let’s hope that there are no more airport occupations, as any interruptions in service impact adversely on Phuket – the vast majority of visitors to the island still pass through Bangkok en route.

Alastair Carthew, a Phuket based writer and communications advisor.

Posted under Lifestyle, Travel & Tourism

The types of offshore bonds (sometimes referred to as professional portfolio bonds) are varied and offer different advantages to investors to match their individual requirements.

TAX FREE GROWTH OF FUNDS
The underlying investment funds linked to a bond are owned by the life insurance company. All income and capital gains which the funds generate are reinvested into units. Many such instruments are based in the Isle of Man or Guernsey (the world-leading jurisdictions for offshore insurance) and therefore don’t pay tax on income or capital gains.

TAX DEFERRAL
Because income and gains grow free of tax, the policyholder can defer any tax liability on their capital until the benefits are taken. In most countries, bonds are considered non-income producing.

TIME APPORTIONMENT RELIEF
This means that tax can be reduced proportionately for time spent as a non-resident and additional investments are always deemed to be made at the initial investment date, even if made when resident again. Regular investments are treated the same.

How it works:
The A/B Rule. A = Number of days spent in UK. B = Number of days policy has been established.

For example: Mr. Jones has a policy worth £200,000 and his gain is £100,000. He started this plan when he was offshore 10,000 days ago, and he returned to the UK 1,000 days ago.

Calculation: 1000/10,000 x 100 = 10%. Therefore, 90% of the policy can be encashed in the UK with no tax liability.

TAX EFFICIENT ACCESS TO CAPITAL VIA WITHDRAWALS
In the UK, an amount equal to five per cent of the premium paid can be taken each year, for a maximum of 20 years, without incurring an immediate income tax liability. With portfolio bonds, this avoids the necessity of selling units to obtain an income.

INVESTMENT CHOICE
A bond offers the ability to restructure and change investment policy within the bond, without changing the investment vehicle.

BETTER TERMS
As an institutional investor, life offices can generally obtain better discounts/terms from investment houses than an individual and these savings are passed on to the policyholders. For example, if an individual were to buy units in a fidelity fund, then he’d pay a 5% bid/offer spread, but this could be reduced to as little as 0.25%, if purchased via a bond.

INVESTOR PROTECTION/PEACE OF MIND
In the unlikely event that a company should go into liquidation, the Isle of Man Life Assurance (Compensation of Policyholders) Regulations Act 1991 covers up to 90% of an insurer’s liability to the policyholder. The same applies for moneys held in Guernsey, as all investments there have to be held by a secure third party custodian. There’s no upper limit to the amount of compensation that can be paid. This makes the Isle of Man and Guernsey two of the best regulated international finance centres in the world.

CGT FREE SWITCHES
By actively managing a portfolio of funds the investor can switch between funds without incurring any tax liability. Normally, if investments are held directly, any disposals incur a capital gains tax liability.

ADMINISTRATIVE CONVENIENCE
Regular valuations keep the investor informed about the progress of the bond via a comprehensive statement detailing all transactions and the value of funds held. Centralising assets based in different countries under a bond wrapper may be attractive, as on death this would only involve obtaining Manx or Guernsey Probate. A professional administration service performs all transactions, relieving the client of the burden of time-consuming paperwork.

TRUSTEE INVESTMENTS
Offshore bonds are ideal trustee investments as they’re non-income producing and offer true tax deferral and little administration burden to trustees. We’ve several trust solutions for our potential clients.

POLICY ASSIGNMENT
It’s also possible to change the policy ownership, by assignment. In general, the new policy owner can then surrender the policy, and any tax liability will fall on him. If the new owner is a non-tax paying spouse, she can offset her unused personal allowances against any gains and pay less tax. This is also very useful for university fees funding.

NON RESIDENCE RELIEF – UK EXPATS
Any periods of non-residence will be relieved of income tax on final encashment. Top-slicing relief may be used for any periods of UK residence if the tax payer is within the basic rate tax band. This may save 18% tax on any chargeable amounts.

CGT V INCOME TAX
Until recently, it has been a feature of UK tax law that individuals who made capital gains were not liable for CGT, if the gain was realised while they were ‘non-UK resident’ or ‘ordinarily non-resident’. Clause 127 of the Finance Act 1998 changed that position. Under the new rules, individuals who have been UK resident for at least four out of the previous seven tax years prior to the tax year of departure will continue to be liable for UK CGT, on disposals they make whilst non-resident, if they return to the UK within five years. The new rules apply to individuals who leave the UK after 17th March 1998 and apply to assets they held prior to their departure. If the individual is UK domiciled, the charge would be on worldwide assets.

An alternative, and potentially much safer approach, would be to contribute to investments which are not subject to CGT i.e. offshore regular and single premium life assurance policies. They’re fully portable, as the investor moves from jurisdiction to jurisdiction. In most countries, no tax charge arises until the benefits are taken.

George Lindsay, Wealth Manager at Expat Solutions

Posted under Lifestyle, Property News

For many years tourist arrivals from Australia have been a key component of Phuket’s hotel industry, particularly as the antipodean winter coincides with the island’s low season. The problem is Bali!

The recent announcement by Jetstar, the Australian-based, long haul budget airline, that it will increase flights from Sydney to Phuket to five rotations per week during the high season, is welcome news. In terms of tourist arrivals, Phuket has always lagged behind Bali, its major regional competitor for the Australian market.

A 2009 Reader’s Choice Award in Conde Nast Traveler, the bible of the travel business, ranked the top islands in the Asia/Indian Ocean region as the Maldives, Bali and Phuket in that order. Research published in June this year showed that Australians continue to rate Phuket as their second choice, after Bali. A report by Bill Barnett, the Phuket based hotel and property consultant, said in May this year that Bali had profited from the recent Phuket airport closures. This when combined with the ongoing political turmoil in Bangkok, impacts on people’s decisions regarding their choice of holiday destination.

In 2008, the Sydney Morning Herald reported that Australians were returning to Bali in record numbers despite a travel advisory issued following the bombings that rocked the Indonesian tourism industry a few years ago. Many Australians died in the Bali bombings.

Comparisons between the two heavyweight destinations have been going on for years. In 2000, the travel magazine Hotel Asia Pacific reported that one reason for Bali’s lead at that time was the greater frequency of direct flights, compared to Phuket, and that Bali also had more top tier hotels.

However, Phuket was ahead in infrastructure development. Over the last eight years, until the airport closures, Phuket appeared to be closing the gap with Bali, which was still subject to suspicion because of the unstable political and security situation. The airport closure in Phuket showed just how vulnerable the island economy is to outbreaks of political unrest. Indonesia, as a result, is now perceived as a safer and more stable country than has been the case in the past. Australians also like Bali because of its closeness, its good surfing and overall facilities.

Phuket’s relative remoteness is offset by the increase in direct flights by the major regional airlines over the last few years, and the growth of budget carriers like Thai Air Asia and Tiger Airways. We’ve also seen the entry of new, smaller competitors like Firefly (Malaysia) and the Phuket-based Happy Air. All-in-all this adds up to a positive future for Phuket in its efforts to wean the Australian tourists from Bali.

What more can Phuket do to get ahead? More high-end accommodation is still needed, and there must be a concerted effort, to stop the tourist scams that blight tourist activities. However most importantly, Thailand needs to achieve political stability.

If these things don’t happen Phuket will continue to attract fewer tourists, particularly from Australia during their winter, which is the Phuket ‘summer’ (low) season.

Alastair Carthew, a Phuket based writer and communications advisor.

Posted under Lifestyle, Travel & Tourism

People travelling by air these days sometimes find themselves without notification, on a flight with a different number, operated by a company other than that with which they’d booked … it’s called code sharing.

This can often cause confusion and even anger, if passengers find themselves on an airline that they consider to be inferior to the one they had chosen. Let’s explain how this circumstance can come about.

Code sharing originated in 1990 when Qantas Airways of Australia and American Airlines combined their services, between a number of US and Australian cities. This preceded the formation of airline alliances, which also use code sharing in a very comprehensive way.

The first alliance, Star Alliance was started in 1997. Thai Airways International was one of the five founding members, and the only one from Asia. This was followed by Oneworld which included Qantas and American Airways and Skyteam led by KLM-Air France.

Most airlines now also have code sharing agreements with other operators. The term ‘code’ is the identifier used in the flight schedule; generally the two character International Air Transport Association (IATA) airline designator code and a flight number.

For example, Flight XX123 operated by the airline XX, might also be sold by airline YY as YY456, and by airline ZZ as ZZ789. Airlines may participate in a code sharing arrangement for several reasons:

1. Connecting flights. This provides clearer routing for the customer allowing a customer to book travel from point A to C through point B under one carrier’s code instead of a booking from point A to B under one code and from point B to C under another.
2. Flights from two airlines that fly the same route. This gives an apparent increase in the frequency of service on the route for both airlines.
3. Perceived service to unserved markets. This allows carriers who do not operate their own aircraft on a given route to gain exposure in the market through display of their flight numbers. Under a code sharing agreement, the airline that actually operates the flight (the one providing the ’plane, the crew and ground handling services) is called the operating carrier and the airlines that sell tickets for that flight but do not actually operate it are called marketing carriers.

Most passengers and travel agents prefer flights which provide a direct connection and code sharing gives this impression. It can, however, be annoying for passengers as the Global Distribution Systems (Sabre, Amadeus, Galileo and Worldspan) often do not differentiate between direct flights and code sharing flights.

Alastair Carthew, a Phuket based writer and communications advisor.

Posted under Lifestyle, Travel & Tourism

According to Forbes magazine, Warren Buffet, the CEO of giant American investment fund Berkshire Hathaway, is the world’s second richest man. He’s made a fortune for himself and his fellow shareholders by investing in the world’s stock markets over many decades. The great stock market crash of 2008 began in September. Many people cringed when Buffet went back into the markets aggressively the following month, well before the markets bottomed in February this year. The point I’m trying to make is that if the world’s most successful investor of all time doesn’t know when the markets have bottomed, then what chance for the rest of us? It’s well-nigh impossible to second guess share price movements, and this is why I’m a keen advocate of unit cost averaging. The so-called drip-feeding approach, investing a little at a time, can be very beneficial whatever the markets are doing. It can make a big difference to the performance of a portfolio, whether it’s a lump sum investment or a regular savings plan generating a pot for retirement, school fees etc. This is how you can benefit from volatility and price fluctuations.

Volatility is inherent in equity investing. It’s important for you to realise that market fluctuations are normal and you should therefore be aware of the risks. Fluctuating share prices obviously mean that the unit prices of funds will also fluctuate, thereby impacting on the value of your portfolio. This is where a strategy of regular investing or drip-feeding really pays off.
The following example demonstrates what can happen when investing in periods of high volatility.


Key points

• The effect of the fluctuating unit price has meant that Example B has ended up with a higher fund value than in a steadily increasing market. Even though the unit price is actually lower at the end of the example than it is at the start.
• To reap benefits from stock markets an investor need not necessarily have a large lump sum to invest.
• Unit cost averaging holds obvious benefits for investors making regular savings/premiums.
• It is important to consider the risks associated with all types of investment, particularly those associated with equity markets.

With the above in mind I think it appropriate to show again how the markets have performed over the recent past. As you can see there have been periods of high volatility. Unit cost averaging has worked during this time to great effect, and no doubt will do so again in the future.

The bigger picture
The case for investing in equities
Taking into account the effects of any short term volatility, the case for investing in equities remains as strong today as it has ever been for those investors with a long-term investment horizon. Over the last 25 years, an investment in the S&P 500 would have grown to almost 20 times its original value.

George Lindsay, Wealth Manager at Expat Solutions

Posted under Investments & Financial Opportunities, Lifestyle, Property News

The oldest club of any kind on Phuket, Phuket Yacht Club, turns 40 this year – and is gearing up to celebrate in style at Royal Phuket Marina.

Phuket Yacht Club is located in one of the safest and most idyllic bays on the island, Ao Yon on Cape Panwa. The club is reminiscent of days long gone, when expats would laze away a Sunday afternoon over cold beers and varied conversation, undisturbed by jet-skis, mass tourism or… well, anything for that matter.

Of course, if lazing isn’t your thing, there is the sailing…The aim of the club – essentially a small boat/dinghy sailing club – is to introduce people to the sport of sailing and encourage others to participate in sailing, club racing and other water activities.

The club offers recreational sailing, club racing, boat rental and family day barbeques – as well as racing lessons to children. In co-operation with Topper Sail, a whole range of sail training is also available for children as well as adults. Those ‘in the know’ when it comes to sailing say that people who start out in dinghies make absolutely the best sailors.

The club’s community contributions include links with Sunshine Home in Koh Sirey; the club invites the Sunshine children to learn about sailing and participate in free lessons, racing and family days at the club. It is the club’s aim that these children have the opportunity to participate in Optimist racing events around Thailand – and possibly even further afield.

The club’s history goes back 40 years and it’s recognised as the oldest yacht club in Thailand. It has always been based in Ao Yon and has always concentrated on teaching sailing and water sports to as many as possible from all walks of life.

This year is the club’s 40th birthday and, on Saturday, November 21st from 5.30 pm, Skippers in Royal Phuket Marina will be hosting a celebration of four decades of promoting sailing – a celebration that should appeal to all ages. Children’s entertainment, a buffet dinner, silent auctions, happy hour bar, music and raffle prizes from some of Phuket’s most prominent hotels and businesses – not to mention revelers from every walk of life and every part of the island – should make for a party worthy of the occasion.

Apart from the celebratory nature of the party, the objective is to raise funds to promote junior and youth sailing on Phuket and to continue the work providing sailing opportunities to underprivileged children.

Tickets are at 600 baht for adults and 150 baht for kids. Tickets are available on the day. Just show up and enjoy!

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