So the Civil Aviation Authorityis to consider how to ease its bonding requirements for the four major companies in the market “because they force companies to tie up capital which could be used for purchases” (Travel Weekly 25 October).
As an ABTATour Operators’ Councilrepresentative for 500 smaller tour operators I have news for the CAA.
Big companies go bust! The list runs from Rolls Royce to the Bank of England.
So to consider reducing the bonding obligations for our ‘big four’ ugly sisters is surely economic madness.
We have four major companies locked in a head-to-head confrontation.
None of them dare retreat for fear that any space they leave will be grabbed by the others.
They each have massive commitments in retail outlets, airlines and guaranteed accommodation.
Their products are time-critical – holidays cannot be stored after their sell-by date.
The exposure to risk that these companies are running is huge. Plans for them to start massive discounting campaigns in January merely highlight the point.
In such circumstances, the logical course of action is to increase consumer protection by raising the level of bonds on holidays sold by these companies, in line with the increased risks they are running.
There’s a lot of truth in the adage ‘the bigger they come, the harder they fall.’
So wake up CAA – it’s not your job to ease their capital constraints so they can buy out more independents!
And when the ‘big four’ come knocking on your door together on the same point, isn’t that getting awfully close to collusion in an effort to distort the operation of a free market? I hope the Department of Trade and Industryis watching more carefully for such oligopolistic practices, following the recent European Union ruling.
Alan Cornish
Director
Corona Holidays
London