Well it hasn’t been the great start to 1999 that everyone would have liked.
The period over Christmas was pretty dull and, apart from the first Monday and Tuesday of the New Year, the rest has been fairly average.
At Sunvil, we are still a little ahead of last year overall and I hope we can keep it that way. Last year was good and we should not complain if we are keeping up.
Of course, it’s early days yet and selling patterns won’t emerge for another few weeks.
On January 3, there was a feature on the structure of the travel industry in the Sunday Times. All the big players were very bullish, boasting that they now controlled such a large chunk of the industry they would be able to control capacity so that discounting would be minimal.
Well, it’s all one big discount from now and it’s hard to see how they could get much lower. The public must be hopelessly confused.
Can someone explain to me why the majors can control capacity now when they could not do so before?
Yes, I know they own their own airlines, but how does that help them control what is on the market?
In the old days of Dan Air, BIA and Excalibur, it was considered to be standard practice among the majors – much to the annoyance of the independent airlines concerned – to cancel seats with the independent carriers if there was a slowdown in the market and concentrate capacity on the in-house carrier.
This would tighten capacity but left the independent charter airlines with the headache of what to do with the aircraft they had been handed back.
When the market is down, it’s generally down for everything, so there is little chance of finding any decent flying. Being landed with such a problem was probably the main factor in the demise of these independent carriers.
Now that the four major players are vertically integrated, there is no point in handing capacity back to their own airlines because what would these airlines do with it?
They can’t give it to Sunvil, a company with a capacity of 25,000 which has suddenly become one of the larger independent players – what has the world come to – because what would we do with it.
No, they have to fly their own excess capacity themselves so they now have less control over market volume than they had before.
Can you imagine the discounting and dumping that will go on if this year turns out to be a disappointment?
I can tell you exactly what will happen. They will withdraw aircraft from poor-selling destinations such as the Dominican Republic and put them into Greece – which is bouyant – selling last minute, cut price, allocated on arrival accommodation of the lowest standard.
Poor Greece once more to be the dumping ground of the mighty mass-market operators.
So don’t believe all that rubbish about controlling the market. They’ve got the tiger by the tail and they know it. So, I am a little nervous about 1999 prospects to say the least.
Therefore, surveys like the recent one from Holiday Which? that recommends travel with the smaller, specialist operators is just what the doctor ordered.