Demand this year is “mixed” and the chase for volume “at any price” has “cast a frost over the market”, according to Monarch Group chairman Iain Rawlinson.
The Monarch Group boss told an Institute of Travel and Tourism dinner at the Houses of Parliament last night: “The industry faces some of its greatest challenges in the next 24-48 months.”
Rawlinson said: “The UK market has had a mixed start to the year. The general mood is uncertain. Aviation is suffering weak yields and overcapacity and is fiercely competitive. We are the lowest-margin region in the world.
“If demand is flat, growth can only come at the expense of someone else. In a declining market these forces become brutal.”
He added: “There are deep structural fault lines in our industry. We have a weak market and weak dominant players with managements in a state of transition.”
Rawlinson told the ITT: “A declining aviation market is in many ways like a raucous school playground with the gates closed and the teachers away.
“Chasing volume at any price forces us all to compete. It is happening in both aviation and tour operating.
“Do we want that kind of industry? The industry should be one where supply and demand harmonise and customers get used to stable pricing.”
Rawlinson insisted: “Customers have had enough of no-frills. People are saying ‘we don’t want to be treated like that anymore. Look at Ryanair’s statements since last year.
“The long-term interests of our industry are not served by us having different values. We need to rediscover our roots and, after safety, customers should come first.”