The big news in travel last week was the swoop by Emirates-owned dnata for yet another UK firm – Stella Travel Services.
It was the group’s purchase of Travel Republic in 2011 that first brought dnata to the industry’s attention, and the company established itself as a serious player when it took Gold Medal off Thomas Cook’s hands earlier this year.
Now it has agreed a deal for Travel 2 parent Stella, and we can be certain this won’t be the last of its acquisitions. Dnata has major growth plans and has made clear it has other UK deals in its sights.
Reports have highlighted dnata’s acquisition of the two leading, trade-only long-haul operators – Travel 2 and Gold Medal, bought earlier this year. Industry comment has focused on what the future might hold for these rivals, now under the same ownership, and what this may mean for agents currently selling both.
Following the deal, dnata travel services vice-president Iain Andrew stressed he has an “open mind” on how the companies will operate. But he was also keen to emphasise his interest in Sunmaster and Travelbag.
Clearly, as dnata grows its product range, it is going to need to more distribution. It’s either going to have to keep buying distribution (and I wouldn’t rule that out) or forge even better relations with independent agents – or both. That could present opportunities for the trade.
Dnata’s acquisition strategy is a clear affirmation of faith in the UK market despite evidence of tough trading.
Any form of consolidation comes with potential threats and opportunities. It’s typical of the sector that the immediate reaction to this latest deal was to accentuate the latter.