Britain’s two largest travel firms TUI and Thomas Cook have both announced bullish trading conditions ahead of full-year results.
The collapse of XL, along the determination of Britons to go on holiday despite the credit squeeze, were the main contributors.Both companies say that less competition in the package holiday market has left them with fewer last-minute deals to sell, meaning they have been able to maintain high prices.
Thomas Cook chief executive Manny Fontenla-Novoa admitted recent airline failures will help profits, but says customers of failed airlines should get more help.
“We were quick to react when XL’s customers were stranded, not only by assisting with the repatriation but also by urging the UK government to undertake an immediate review of consumer travel protection, update it and address the anomaly that seat-only customers are unprotected in the event an airline ceases trading,” he said.
Thomas Cook reduced the number of holidays on sale by a quarter compared with the same period last year, with prices 15 per cent higher.
Both companies argue they are well equipped to deal with a recession, insisting that a foreign summer holiday is now regarded as a necessity by most families, who will cut back on most other things first.
Thomas Cook has announced its intention to shelve plans for a three-way airline merger with Deutsche Lufthansa AG and TUI Travel Plc, arguing the Condor unit could stand alone now that competitors have failed.
Manny Fontenla-Novoa said today that he didn’t see enough upside or savings from the proposed merger between Condor, Lufthansa’s Germanwings and TUIfly Germany.
Fontenla-Novoa said: “In the last year the whole airline industry has totally changed. Capacity has been taken out by almost everybody. We are much more comfortable that Condor can continue as a standalone airline.”