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Sanity returning as airline collapses
Comment by Jeremy Skidmore (www.jeremyskidmore.com)
Two very different pieces of news recently revealed how some sanity seems to be returning to the market – even if it is at the expense of the consumer.
Firstly, there was the collapse of Oasis Hong Kong, which was sad news for everyone involved in the airline.
Nobody wants to see people out of a job, but how can you operate from London to Hong Kong from £65? You can’t it seems, as reports in Hong Kong claimed the airline accumulated debts of £65m in less than two years.
This wasn’t some cheap and cheerful operation, either. Have a look at some of the online letters to national newspapers from people who sing the airline’s praises and claim the service was second to none.
In an era of spiralling fuel costs and increasing taxation on flights, we are likely to see the cost of flying rising sharply over time. It has to happen, even if consumers won’t like it.
Meanwhile, Thomas Cook announces that it has 19% fewer holidays to sell than this time last year, in a market where capacity has been cut by 10%.
They say they are in good stead for the lates market – not half!
For the first time this summer, holidaymakers are likely to feel the impact in their pockets of the consolidation of four major players into two.
It was absolutely the right thing for the industry and Thomas Cook is now proving that it is possible to run a mainstream operation – albeit with specialist divisions – without having to chuck all your margin away.
But of course the holidaymaker, who has enjoyed unrealistic prices in the lates market for years, may soon be in for a shock.
The traditional package holiday is supposed to be dead, but it is still appealing to around 16 million people every year. Many of them expect to wait to the last minute and then pick up a fantastic deal; this year they may not get lucky.
The industry has needed some stability for years and it may just be coming. But we shouldn’t feel too sorry for the bargain hunters; there are still masses of holiday options available to them at the touch of a button.
Jeremy Skidmore
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