TUI cuts capacity for summer 2012
TUI has cut summer 2012 capacity by 9% after seeing an 11% drop in sales, but it insisted the package holiday business in the UK was "alive and well".
Distribution director Nick Longman said more capacity would be added if sales picked up, but he admitted the company – which has just announced an 18% rise in operating profits for 2011 – expected next year to be tough.
However, he said there was no danger of TUI following rival Thomas Cook into the doldrums as the two companies had very different business models.
"Thomas Cook is primarily a travel retailer whereas we are holiday providers and we are focusing more and more on providing differentiated product that offer holiday experiences which people can't buy anywhere else."
Longman said differentiated holidays, such as Thomson Couples (aimed at 35-55 years olds), now accounted for two-thirds of all its sales but the company was aiming to grow this to 80%.
He admitted the company will also see its sales via high street travel agents shrink in the future. Already, online sales account for 40% of the operator's bookings, while travel agents take just 38%.
"There is no doubt we will see online growing, but travel agents will remain a very important sales outlet for us," said Longman. "We will continue to close shops where necessary but we are not looking at widespread closures and we believe high street shops will continue to play a vital role in the sales process."
He said the company was excited by its long-term prospects beyond 2013 when it will become the first UK charter company to operate the Boeing 787, nicknamed the Dreamliner.
"With its increased range it will give us some exciting options, such as Vietnam or even Hawaii, and the passenger onboard experience will be hugely different. With larger windows and mood lighting, passengers will suffer less jetlag. We are very excited about this."
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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