COSMOS chief executive Fabio Mantegazza has called
time on the operator’s efforts to compete with the Big Four and is ready to
dramatically transform the business.
The job of restructuring its current product offering
has fallen to former JMC managing director Terry Williamson, who replaces Nigel
Wright as Cosmosair managing director. First on the list is a review of Cosmos’
range of destinations, airports and accommodation – all of which could be cut
in an effort to streamline operations and increase profitability.
Mantegazza – who has long believed Cosmos could rival
the vertically-integrated operators – admitted he no longer wanted to increase
market share. The emphasis now, he said, would be to find Cosmos’ niche.
“The days we would do anything to be one of the big
boys are over. We need to find the right place in the marketplace for Cosmos.
Everybody knows being a medium-sized operator is a difficult position and we
may need to shrink the business.
“We have to take our assets and fashion them in a way
to work better. Trying to be all things to all people is not a good idea. It is
about increasing profits.”
Cosmos will look to set up more partnerships with independent
retailers and build on the strength of the brand name. “There are enough
independents that could use an operator like Cosmos,” said Mantegazza.
He said the change in management reflected a need to
take the business in a new direction.
“Nigel did a good job in repositioning the business
and growing market share but the time has come for someone to take it further.
Now we want something different.”
Williamson admitted that some tough decisions would
have to be taken – and that could have a knock-on effect on sister company
Monarch Airlines, which flies the majority of Cosmos’ customers.
“My plan is to
look at the product range and trade partnerships and understand who Cosmos’
clients are,” he said. “We may or may not stay in all of our destinations, but
flying routes that do not make a profit does not make economic sense and we
will need to find something else to do with those aircraft.”
Williamson stressed decisions about Monarch were not
his responsibility and would be made at group level. If Cosmos cut back its
operation, increasing third-party flying for Monarch would be the most likely
option, he said.
The operator has already cut capacity for next summer
by 20% and has had to lose a “few dozen” staff as a result of the downturn in
business following September 11.
Some of the job cuts were contract staff who were
already due to leave at the end of their contracts. Further redundancies have
not been ruled out.
Bookings have picked up for Christmas, although Egypt
is still struggling. Mantegazza said he was “reasonably optimistic” about 2002,
even though bookings are 20% down, because of the capacity cuts Cosmos has
made.
Meanwhile, Nigel Wright said his departure from Cosmos
after two-and-a-half years was a mutual and amicable decision made before September
11.
Wright said he was now looking to work for a small
tour operation.
“I want take something small
and build on it and make it more successful. Lots of people have been leaving
jobs recently but I think there will be opportunities in the spring,” he said.