23 August 2010

TUI Travel Blames Small Agencies + Dynamic Packaging For Its Woes

The bigger travel companies in the UK are trying to play the blame game according to a recent report in TTG/UK.

After the recent collapses in the UK - there is plenty of bad blood floating around in the market.

Tui’s chief financial officer Paul Bowtell said: “The later booking curve plays into the hands of smaller operators who can pick up relatively cheap distressed airline stock which can they can package up.

“These operators are able to get that stock to market very quickly – they feed on distressed stock and that has an impact on margins at the lower end of the market.” He is not alone other players like Sunvil's Noel Josephides said that the main problem was dynamic packaging agencies who picked up distressed stock at the last minute.

“This is the bane of our lives,” he said. “Whenever you have distressed stock this will happen as the dynamic packagers will move in and undercut us.

Clearly ignoring the fundementals that I laid out yesterday in my post on the state of the UK Market, he said: " I’m looking forward to when all the dynamic packagers have to have an ATOL and we can stabilise the market.”

Given the need for a new scheme in the market following the Loss by the UK CAA of its court battle on the subject, this is not going to happen any time soon. But for the biggest operator to put the blame on the small guys is seems to indicate that TUI Travel is having a harder time of making its scale/size work to its favour.

On the other hand arch rival Thomas Cook UK boss Ian Derbyshire said these smaller operators had not had any “noticeable” effect on its business this summer. He added that the “softer” prices in the early part of the summer were due to weak consumer demand caused by the good UK weather and emergency budget.

... er that and a changing market anyway...

Oh well!


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