No-frills took business from operators in 2002, says analyst

The number of ATOL-protected holidays taken last summer dropped below the number taken in 2000, and while operators are blaming a poor economic climate, industry experts argue that the meteoric rise of no-frills carriers was no coincidence.

The CAA reported 17.7 million ATOL-protected holidays and flights taken in Summer 2002, a 6.3 percent drop year-on-year. This is lower than the number taken in Summer 2000, which was 17.9 million.

Travel industry analyst, Mark Riseley from GartnerG2, told TravelMole: “The decrease is a combination of a number of things. The capacity has been cut, which is partly why 2002 wasn’t a good year. The average price of an ATOL ticket also increased, by 6.1 percent over Summer 2002, which affected demand. However, it would be resigning too much to fate to assume that demand for travel was automatically affected by 11 September.

“It is a case of two things happening at once. Customer attitude and confidence is changing, and we don’t need tour operators like we used to. What we are seeing is the package market is starting to saturate. It is a combination of more independent travel, and more no-frills travel.”

The sharpest decline in ATOL-protected passengers was in the schedule flight-only sector, which fell ten percent to 2.5 million passengers in Summer 2002. This marked a gradual decline from 2000, when 2.9 million passengers flew on ATOL-bonded schedule tickets.

Mr Riseley told TravelMole that no-frills carriers have been taking advantage of the declining market. He said: “Fewer flight-ony tickets were bought over Summer 2002, and the no-frills carriers went from strength to strength. The no-frills carriers have been taking some business from both seat-only and from package passengers.

“The seat-only ticket is not that attractive, because you have to buy it at the last minute, there is usually patchy availability, and no obvious brand. It is still quite difficult to book with some companies, with much of it is still done over the phone. However, no-frills carriers have a reliable schedule, and are easy to book over the internet, and you can plan ahead”.

According to the CAA’s figures, passengers on MyTravel flight-only tickets in Summer 2002 fell 48 percent from the previous Summer to 63,446. The year to December 2002 shows a sharper decline, down 73 percent, year on year, to 97,900.

Mr Riseley associates this decline to capacity cuts and the drive to re-route sales to MYTravel’s no-frills operation, MyTravel Lite, in addition to the capture of some business by competing no-frills carriers.