Merger leaves First Choice with much to ponder

Comment by Jeremy Skidmore (www.jeremyskidmore.com)

If you want an example of how fickle the media can be, then take a look at the stick currently being handed out to First Choice chief executive Peter Long.

For many years he was the darling of the city and, only a month ago, touted as the strongest player in the market.

This week, he was labeled a ‘zero’ by one tabloid, following the announcement of a merger between Thomas Cook and MyTravel which many see as leaving First Choice out in the cold.

Long was way ahead of his rivals when he spotted the trend away from bog standard package holidays and built up its specialist businesses to account for around 50% of turnover.

He hasn’t suddenly become a bad manager but he will need to use his skills to continue the company’s upward trend of the past few years.

It has been an open secret for months that First Choice has been keen to offload its mainstream tour operation. Now, presuming there is no-one else at the negotiating table, he has to put an arm around that business, convince staff that they are loved and wanted and urge them on to an even stronger performance in the future.

Still, First Choice are hardly in a weak position and it would take a brave person to bet against Long bouncing back from a difficult week.

The Thomas Cook/MyTravel merger, or more correctly the takeover by Thomas Cook, because that’s certainly what it looks like, is long overdue.

If you take into account no-frills flights, the overcapacity in this market is bordering on the obscene.

Of course there will be massive job cuts and shop closures – or economies and efficiencies as companies prefer to call them – but that would be inevitable regardless of the merger. Just look at the cuts TUI is making as people increasingly drift away from buying package holidays at travel agencies.

At Thomas Cook, chief executive Manny Fontenla-Novoa has done a remarkable job to deliver record UK profits. But even when it was on the brink of bankruptcy four years ago, it was a ‘Teflon’ brand, where no dirt would ever stick. Despite losing buckets of money and buying Club 18-30, Thomas Cook was still a classy name that the public believed set standards in travel.

The deal also marks the end of an era with the disappearance of one of most famous names in the business.

Airtours faced a barrage of abuse when it first started with the so-called ‘flying pig’ aircraft and in recent years became famous for a ludicrous name change, an accounting black hole and losses of £911 million in one year, before Peter McHugh turned it around.

But it should not be forgotten that in between it was an incredibly exciting company, with some amazing personalities, and, long before no-frills flights came along, it opened up the world to millions of people who previously could only dream of holidaying in places like the Caribbean.

Long ago I fell out with founder David Crossland over something or other that I had written, but I and many others will remember him as the sharpest tour operator of his generation before his fall from grace four years ago.