Travel companies review capacity after XL failure

Travel companies are reviewing capacity and supplier relationships while agents face thousands of pounds in lost commission following XL Leisure Group’s demise.

The collapse of trade-only seat operator Freedom Flights has hit agents particularly hard and forced them to re-book thousands of holidays.

This sent sales of packages, flight-only and accommodation-only soaring – up 86% on the day of the crash compared to the same day last year, said industry analyst Ascent-MI.

But Advantage commercial director Julia Lo Bue-Said warned agents could lose “thousands” in commission because they could not source similarly priced holidays for clients.

“Because of the competitive prices XL had, they are difficult to match and consumers are cancelling instead. With Freedom Flights, consumers will get their money back but agents won’t get anything.

Meanwhile, TUI Travel and Thomas Cook are both reviewing whether to increase capacity, having already announced cuts for next summer of 15% and 7%, respectively.

XL’s collapse represents a capacity reduction of 7%-10% – around 2.3 million passengers.

TUI Travel UK and Ireland managing director Dermot Blastland said: “We will add capacity judiciously.”

Allbury Travel Group chief executive Eamonn Ferrin admitted: “That amount of capacity coming out of the market offers opportunities to people like us who would like growth.”

The Co-operative Travel, Advantage, Thomson and First Choice are among those now reviewing supplier partners. TUI Travel distribution director Nick Longman said: “We have to be confident about who we sell.”

The fold has led to increased advertising and point-of-sale campaigns to boost consumer confidence. The Co-operative Travel managing director Mike Greenacre said: “We will try to make clear the difference between booking the traditional package where consumers are fully protected and booking split packages where the travel company has no ATOL.”

ABTA chief executive Mark Tanzer added: “It is going to be a bit of a wake-up call to consumers.”

More on the collapse of XL

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.