Cosmos shrinks to fit

All change: from left, Williamson and Mantegazza are set to reposition the company and find its correct place in the market while Wright seeks opportunities elsewhere

Cosmos shrinks to fit

Report by JULIET DENNIS

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 today. 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.