21 June 2007
Package Holidays a thing of the past?
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TRADITIONAL package travel is set to
decline further as Libra Holidays revealed plans to dispose of its
bucket-and-spade operation and Thomson announced that it would sell more
seats and beds from third parties online.
Thomson has also launched scheduled
flights to Israel, an initiative unthinkable a few years ago and
indicative of parent company Tui’s mass-market exit strategy.
Ryanair has also piled more pressure on
traditional operators by offering three million seats for £20 return
during the summer peak season, fuelling fears that late sales prices
will plummet (TTG June 15).
Libra Group chief executive Andreas
Drakou confirmed the Cyprus-based company was looking to sell its tour
operation to management or a UK buyer so it could concentrate on its
hotel and property development business.
The company is struggling in a UK
market that is becoming less package-orientated. Its licensed capacity
has been frozen at 245,000, about half what it was at its peak several
years ago.
Libra lost £21 million in 2006. The
previous year it had lost double this after a disaster when an aircraft
from its former inhouse carrier Helios Airways crashed, ending the
group’s airline ambitions.
Ryanair’s decision to offer the £20
fares, which will be available in July, August and September and include
all taxes and charges, will squeeze mainstream operators who are already
reporting tough trading conditions.
The carrier claims the promotion could
cost it £45 million if all seats are taken up, but chief executive
Michael O’Leary said: “It is part of our ongoing fare war with
everybody else in the industry. It will continue to stimulate late
bookings and do further damage to the late-booking holiday market.”
Thomson is to fight rivals such as
Ryanair by adding more product from bed banks and airlines to its
website, predicting that such competition would continue to damage
traditional package operators.
Graham Donoghue, Tui’s head of new
media, said: “We recognise that the old model doesn’t work. We are
blending our main assets with third-party content. This is about hybrid
manufacturing and blending the bed banks’ products with ours. This is
new for us: before we were a manufacturer [of holidays].”
Speaking at the launch of Thomson’s
Online Booking Report 2007, Donoghue said Thomson featured 30,000
hotels, of which 4,000 were contracted inhouse, but aims to increase its
range to 100,000 by the end of the year.
He said the target was to offer 500
airlines and 200,000 properties.
The introduction of Thomsonfly flights
from Luton and Manchester to Tel Aviv will target the ethnic market
rather than holidaymakers.
Thomsonfly commercial director Guy
Stephenson said: “We are moving away from the traditional package into
a more component-based range, and this market is right for that.”
The CAA’s latest Atol figures
highlight a continuing shift away from fully bonded packages, with the
total number of Atol-protected passengers falling by 3.7% year-on-year
to 26.3 million.
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