| Journal: TWUK | Section: |
| Title: | Issue Date: 10/07/00 |
| Author: | Page Number: 13 |
| Copyright: Other |
We are sending out the wrong message to the public. It’s time we shook up the industry in order to improve business for ourselves and services for our clients.
Noel Josephides
ANOTHER week gone by and still no almighty rush to fill those last few seats.I was talking to a fellow operator yesterday who quite rightly said that what we had made in a better April and May this year has been thrown away in June.
In Crete, our local agent was telling us that a volume operator was selling self-catering for two at £100 for a week. This price barely covers the airport taxes but it is a sign of desperation.
The operator will hope it means that those two people will have a little to spend on excursions locally.
However, the clientele paying £50 each is not one which has waited for a bargain. Most of those booking at £50 cannot afford more and keep what little else they have for drink. It really is much better for the whole industry if we allowed more capacity to go empty because, for the one millionth time, we are sending out the wrong message to the public.
Now that the vertically integrated are selling more of their own aircraft capacity for their in-house operator they are suffering a double whammy.
Less third-party flying means less full price seat revenue to the in-house airline and, as their retail chains sell more of their own in-house product, the greater the pain. Vertical integration is currently digging a huge hole for our market leaders to fall into. It’s looking very, very dangerous, especially as forward bookings for next year are grim.
Can the worst happen? Well, you only have to look at Marks and Spencer and my former employer C&A. When I worked there as a trainee buyer, we couldn’t keep the customers out of the shops. How times have changed.
C&A died because it failed to innovate. But what can we do, as an industry, to freshen up our own product? Is an improvement in service and customer care enough?
We all say we practice customer care but really, it’s just an expression. None of us make enough money in what we do – except for the really rarefied specialists who don’t charter aircraft in a big way – to enable us to do better for our clients.
So, we should start with the obvious. Raise prices, lower capacity, improve service and bingo, we’ll all see an improvement.
I wonder how many times I’ve said that in this column? You would have thought that now we have quoted companies at the top, trying to show a return to shareholders, more sense would prevail.
Unfortunately, there are still egos to be satisfied.
And what about Cyprus, the best European performer of the year?
Well, hoteliers will tell you that, with the exception of the cheap apartments in Ayia Napa, occupancies aren’t much higher than 50% at the moment.
We are all in danger of believing our own hype.
The bottom line is we do not make enough money, cannot invest in developing our businesses, don’t do the job well enough and try to make money from peripherals rather than the core product.
We’ve been papering over the cracks and have been fortunate that the UK economy has been booming.
The real test will come when we see a downturn which may well come next year.
“Raise prices, lower capacity, improve services and, bingo, we will see an improvement”