Such has been the interest shown in my blog about All Inclusive (AI) holidays, it has become clear that there is a great misconception regarding holiday companies where what holidaymakers think are separate companies are in fact little more than ‘brands that are owned by a very small number of conglomerates.
The story of the UKs holiday air travel business has become so convoluted over the years for a long time it was almost impossible to know who actually owned what. Both holiday companies and in-house holiday airlines were ‘re-badged’ or ‘re-branded’, merged, taken over and or disappeared, it is worth having something of a ’bring up to date’.
The big tour operators had grown larger through aggressive acquisition and also moved into foreign markets. Consolidation raised new fears among small companies, whose campaign for what they saw as fairer competition, supported by consumer lobbyists, finally prompted a reference to the Monopolies and Mergers Commission in November 1996. The cause was vertical integration, the ownership of travel agencies, charter airlines and tour operations by the same parent group. The Office of Fair Trading had already looked at this issue in 1993, and decided a reference was not justified. But power wielded by the major groups had rapidly intensified. Five companies found themselves under the scrutiny: Thomson, which had some 24.6% of the foreign package market in 1996; Airtours, which had 15.9%; First Choice, with 10.1%; Sunworld, which had just been bought by Thomas Cook; and Inspirations, which had 2.3% and was also destined to be swallowed up by Cook’s. Of these, only First Choice did not at that time own a chain of agencies, though Thomas Cook held a stake in it.
The Commission’s report was made public in December 1997. To the dismay of many it concluded there was still plenty of competition in the industry and that there was no need to sharpen it by forcing the big groups to shed any of their component parts. Players came, it said, and players went. There was no significant barrier to entry either as a tour operator or retailer.
There were some minor items that needed to be put right. The Commission stated that the practice among agents of tying high priced compulsory travel insurance to bargains was likely to mislead customers into thinking they were getting a bigger price cut than was really the case. It also criticized ‘most favoured customer clauses' in agreements between operator and agent. These obliged the retailer to cut the price of that operator’s packages in line with discounts from other tour firms. The Commission decided they could discourage agents from discounts which they would otherwise be prepared to offer. And it urged that the big groups should make clearer to consumers exactly which operators were linked with which agents. The Government said it would take action on all three, but while the first two practices were quickly outlawed, the third, ensuring greater transparency of ownership, proved stubbornly difficult to achieve.
The report caused a few minor difficulties but it blew open the doors for a rush of takeovers. Cook’s linked up with the Carlson Leisure Group, with over a thousand owned or affiliated agencies, tour operations including Inspirations and its airline, Caledonian. Airtours bought Panorama and two other operators. Thomson’s shopping spree included the Simply Travel and Magic groups, Headwater and ski operator Crystal Holidays. First Choice acquired long-haul operator Hayes and Jarvis and winter sports firm, Flexiski.
Foreign ownership was not new to the industry. Thomsons had a Canadian parenthood. Inghams and Cosmos were Swiss owned. However, when the Midland Bank sold Thomas Cook for £200 million to LTU in June 1992, it seemed a turning point. LTU was Germany’s third biggest tour operator with 17% of that country’s package market. Thomas Cook was a symbol of a things British. It was not long before UK companies were operating in other European countries. Airtours moved into the German market, then Scandinavia, Belgium, Holland and France, with a large slice of the organisations owned by the American Carnival Cruise Lines. First Choice bought the Spanish company, Barcelo, then announced it would target markets so far left untapped by its rivals, such as those in Greece and Italy.
Thomsons launched operations in six other countries - Germany, Ireland, Sweden, Norway, Denmark, Finland and Poland. Its move abroad helped to make it, like Cook’s, a target of German interest. Still Britain’s biggest tour operator, it had been through difficult times since its flotation on the London Stock Exchange in 1998. In April, 2000, German travel company C&N Touristic, jointly owned by Lufthansa and the stores chain Karstadt Quelle, approached Thomson with an offer of 130p per share. The UK firm, 23% owned by the Canadian Thomson family through its Woodbridge holding company and roughly 20 per cent owned by small shareholders, many lured in by the prospect of cut-price holidays, rejected the approach. But it left the door ajar for C&N should the Germans come back with a better bid. C&N eventually raised its offer to l60p, valuing Thomson at £l.6 billion. Its management thought it had sealed the deal, but it was beaten to the post by German rival Preussag, the former industrial conglomerate which owned TUI, Europe’s biggest tour operation, and which had acquired a controlling stake in Thomas Cook. Preussag agreed to pay £1.8 billion.
The deal created a giant. Between them they operated 106 aircraft and over 4000 High Street travel agencies. Preussag had to agree to sell its 60 per cent stake in Thomas Cook in order to secure approval from the European Commission. Westdeutsche Bank, owner of one-third of Preussag, was also obliged to sell its state in Cook’s.
And so to details.
Lunn Poly was at one time the largest chain of travel agents in the United Kingdom. The company originated from two successful travel agencies established in the 1890s: The Polytechnic Touring Association and Sir Henry Lunn Travel. Both firms were acquired in the 1950s by the Harold Bamberg’s British Eagle airline group, and combined into Lunn Poly during 1965. It became a nationalised industry as part of the Transport Holding Company (THC).
In June 1971, Sunair bought Lunn Poly from the THC for £175,000. The next year, the company became part of Thomson Travel Group, along the way it acquired ten John Camkin Travel shops in the Midlands -which increased the number of shops from less than 30 to nearly 500 by 1990. It is now owned by TUI Northern Europe, a subsidiary of the German conglomerate TUI AG.
When TUI UK rebranded Britannia Airways as Thomsonfly in November 2003, the company insisted that there were no plans to rebrand Lunn Poly. That ‘promise’ lasted a year, when on 2 November 2004, the announcement was made that Lunn Poly was to be rebranded as Thomson in order to create a so-called ‘powerbrand’. TUI UK announced that all 780 Lunn Poly shops in the United Kingdom would be renamed to Thomson before the peak holiday booking period started on 26 December 2004.
Thomas Cook & Son
The company's name was altered from Thomas Cook & Son, Ltd, to Thomas Cook Ltd around 1974, and the company's Publishing Office was moved from London to Peterborough in July of the same year, where locally it is still known as ‘TC’.
After restructuring the company and re-entering the traveler’s cheque business the company prospered again. During the 1980s Thomas Cook had its most visible business presence in the U.S., including robust travelers cheque sales to regional U.S. banks. The company had enough business critical mass to set up a computer centre near Princeton, New Jersey. Robert Maxwell bought substantial holdings in the company in 1988. He was expected to sell his holdings quickly as he was a publisher rather than a travel agent. However, when Crimson/Heritage purchased the U.S. division of Thomas Cook for US$1.3 billion in 1989, he still maintained a substantial interest in the company until his death.
In June 1992, following the acquisition of Midland Bank by HSBC, Thomas Cook was sold to the German bank Westdeutsche Landesbank (WestLB) and the charter airline LTU Group for £200 million.
In September 1994 American Express (Amex) bought the corporate travel interests of Thomas Cook Travel Inc. which represented about ten percent of the British company's total revenue. However Amex was not able to buy the venerable Thomas Cook name; an American Express affiliate, Cook Travel Inc., had been operating under that name since 1991 in the United States.
Due to contractual difficulties LTU Group sold its 10% shares to WestLB in May 1995. During 1996 the company bought short-haul operator Sunworld and European city-breaks tour group Time Off. Within three years the company had combined Sunworld, Sunset, Inspirations, Flying Colours and Caledonian Airways into the JMC (for John Mason Cook) brand.
On 2 February 1999 the Carlson Leisure Group merged with Thomas Cook into a holding company owned by West LB, Carlson Inc and Preussag Aktiengesellschaft (‘Preussag’).
However, in mid-2000 Preussag acquired Thomas Cook's rival Thomson Travel and was forced to sell its majority 50.1% stake in Thomas Cook by regulatory authorities.
In 2000, the company announced its intention to sell its Financial Services division, to concentrate on tours and holidays. In March 2001 the Financial Services division was sold to Travelex, who retained the right to use the Thomas Cook brand on Traveller's Cheques for 5 years.
After the market depression, particularly following the 2001 September 11 attacks, the company started a disinvestment programme, disposing of subsidiaries and business ventures.
In 2002 Thomas Cook was acquired by the German company C&N Touristic AG, which later changed its name to Thomas Cook AG.
In February 2007, it was announced that the Thomas Cook AG and MyTravel Group plc were to merge. The companies announced they expected to make savings of over £75 million a year in savings following the integration of both businesses. Under the terms of the merger, the owners of Thomas Cook AG, KarstadtQuelle (later Arcandor), owned 52% of the new group. The shareholders of MyTravel Group owned the remaining 48% share. The merger was completed in June 2007, and took place through the formation of 'NewCo' which effectively purchased MyTravel and Thomas Cook and was then listed on the London Stock Exchange under the name of Thomas Cook Group plc.
On 14 February 2008, Thomas Cook bought booking website Hotels4U.com for £21.8 million. On 6 March 2008, the company bought back its licence to operate the Thomas Cook brand in the Middle East and Asia from the Dubai Investment Group for an amount estimated to be around 249 million euros. In April 2008 Thomas Cook bought the luxury travel firm Elegant Resorts from its founders Geoff Moss and Barbara Catchpole for an undisclosed figure. The company took over Preston-based Gold Medal International, owner of NetFlights, in a deal worth £87 million in December 2008.
On 8 March 2009 Thomas Cook signed a deal with Octopus Media Technology to host, upload, and provide an online video player for Thomas Cook TV. In Spring 2009 Thomas Cook UK signed a deal with International Entertainment Supplier The E3 Group, to exclusively supply entertainment to the group.
In June 2009, Thomas Cook's majority shareholder Arcandor filed for bankruptcy, although the group was not affected. Arcandor's shares in Thomas Cook were sold by its creditor banks in September 2009.
In July 2010, Thomas Cook Group bought German tourism company Öger Tours, which was owned by Vural Öger.
It was announced on 8 October 2010 that Thomas Cook Group was to merge its branch network with that of The Co-operative Travel to create the UK's largest travel network. The deal saw the new network 70%-owned by Thomas Cook and 30%-owned by Co-operative Travel. Thomas Cook's Going Places branded branches were rebranded under the Co-operative's label.
On 22 November 2011, Thomas Cook shares lost about three quarters of their value on the London Stock Exchange after the company announced it was in talks with its banks about increasing borrowing by some £100 million but the shares recovered somewhat the following day. There were also reports that the company was planning to close 200 of its 1,200 travel agencies and foreign exchange offices.
On 1 July 2013, Thomas Cook announced that it would cease publishing the Thomas Cook European Timetable, along with closure of the rest of its publishing business. The final edition of the timetable was published in August 2013.
Thomas Cook Group operates in five main divisions, UK, Central Europe, German airlines, West Europe and Northern Europe.
With a joint fleet, at merger, of 97 aircraft, 2,926 stores, 32,722 employees, and over 19.1 million annual customers, the new group became the second largest travel company in Europe and the UK, behind TUI Travel.
In 1991, International Leisure Group - the then-owners of Club 18-30 collapsed and was taken over as a management buy-out backed by venture capitalists County NatWest Ventures, Grosvenor Capital and Causeway Capital. After being briefly rebranded as The Club due to regulatory rules precluding the use of the name for three years, it reverted to the original name in 1994. In 1995 the company was sold for £9.75m as a part of a ‘bimbo’ with various venture capitalists including Royal Sun Alliance and others and incorporated with Sunset Holidays and the newly formed airline Flying Colours. (Total deal £40m) In 1998 Thomas Cook acquired Flying Colours for £57.5m.
Club 18-30 was subsequently incorporated into Thomas Cook’s JMC brand of travel companies which included the operating brands Flying Colours, Sunworld, Sunset, Inspirations and Caledonian Airways. In 2002, following a strategic review of the business, the management company UP Trips, was formed to ensure that Club 18-30 retained its dominant position in the youth market by providing dynamic package offering. However, by 2008, the UpTrips Management company dissolved with Club 18-30 once more a key product within the Thomas Cook portfolio.
MyTravel Group PLC was a package holiday company based in the United Kingdom. The group included brands such as Airtours, Aspro, Cresta, Direct Holidays, Escapades, Manos and Panorama in the UK and Ireland, Sunquest Vacations and ALBA Tours in North America, and Ving, Always, Tjæreborg, Spies, Skibby, MyTravel Tango, Bridge and Saga Solreiser in Scandinavia. The company included an in-house airline, MyTravel Airways, however, following the merger of MyTravel and Thomas Cook AG on 19 June 2007, these brands passed to the new combined Thomas Cook Group plc.
The Group was a FTSE 250 listed company with a retail estate of over 700 shops and a total ownership of 31 aircraft, 81 hotels and resorts, 14,600 employees and a customer base of over 5.7 million people worldwide.
The group was founded under the Airtours brand in 1972, when David Crossland purchased a series of small travel agencies in Lancashire, United Kingdom.
Crossland had started work for Althams, a travel agency in Burnley, the town of his birth in 1963. After leaving school with three O-levels, his choices were limited. He stamped brochures and made the coffee. At 18 he was made manager of another Burnley agency called Central Travel. After a couple of years with a company called Silver Wing, which operated holidays to the Channel Islands, he joined a start-up firm called Travelplan. His big break came on Christmas Eve, 1971, when an elderly childless couple offered to sell him their two travel agency shops. Travelplan wanted to buy them out but the couple said they would rather he bought them.
David Crossland purchased Pendle Travel Services, a travel agency business consisting of just two stores in Lancashire. A second travel agency business was acquired shortly after from Albert and Ivy Roberts who had registered it using their initials, A.I.R. Tours. Thus the Airtours name was born.
Throughout the 1970s he bought shops from elderly agents who were similarly childless, or whose children were not interested in carrying on the business. By the end of the decade he had a dozen or so, all around Manchester Airport, and was beginning to break into tour operating. His first motive was to provide holidays for customers who could not get what they wanted from existing tour firms. By 1986 his company was carrying some 250,000 passengers a year. He realized that this was about as far as he could go as a one man band, and decided to bring in professional expertise to run his finances, and his marketing, for example. Within three years the firm's client list had leaped to 750,000.
Everything now seemed to be happening in a blur. The company was floated on the London Stock Exchange in 1987 with a market capitalization of £28 million. Airtours persuaded hoteliers in Barbados and Jamaica to accept British holidaymakers in summer, instead of relying heavily on the American market in winter, and then closing. It began offering long haul holidays to the US West Coast and Hawaii. It played a huge part in developing package tourism to the Dominican Republic. Some observers muttered that it was growing too fast. They saw as a symptom the continual problems of a Boeing 747, chartered for its long haul business, which the press dubbed the ‘Flying Pig’ because of an appalling sequence of mechanical failures.
It was partly the problem of the Flying Pig which persuaded Airtours to launch its own airline in 1990. Not only did the company want another source of profit - it wanted tighter quality control.
In 1992, Airtours launched a hostile bid for the Owners Abroad group, which was twice its size and already quoted on the Stock Exchange. A long verbal battle ensued as Owners tried to retain its independence. In the end its shareholders opted to stay as they were.
Crossland was not happy but he had an alternative strategy. It bought leisure travel agencies from Pickfords and Hogg Robinson and a tour operation called Aspro, which was strong in Cardiff and Belfast. With it came an airline, Inter European, which was absorbed into Airtours.
The Owners Abroad group rebranded itself as First Choice in 1994. Airtours was to make a second attempt to acquire it in 1999, a bid which was thwarted this time by objections from the European Commission.
During the 1990s, Airtours purchased Scandinavian Leisure Group (SLG) including award winning tour operators such as Ving and the airline Premiair.
In 2002, Airtours Group plc, rebranded under the new company-wide banner of MyTravel Group plc. This included a name change for Airtours International and Premiair to MyTravel Airways. Shops throughout Northern Europe were rebranded to MyTravel however, UK retail outlets remained under the banner of Going Places due to the immense brand awareness and popularity. In November 2003, MyTravel sold off its North America Cruise Division to NLG (National Leisure Group) of Woburn, MA.
In 2004 and 2005, MyTravel took 5.7 million people on holiday of which 3.4 million were from the UK, 1.5 million from Northern Europe and 0.8 million from North America.
On 12 February 2007, MyTravel Group plc announced that they had agreed terms on a merger with Thomas Cook AG. The merger was given shareholder approval at an Extraordinary General Meeting on 29 May 2007.
The airline started operations on 11 April 1987, launched by the Owners Abroad Group under the name Air 2000 with two Boeing 757 aircraft and a flight from Manchester to Málaga. The fleet doubled a year later, with one aircraft being based at Glasgow International Airport.
Long haul services to Mombasa in Kenya were introduced during the 1988/89 season. The 757s were re-equipped for extended range and flights to the United States began in 1989. The airline was granted a licence for scheduled operations by the CAA in 1992, which commenced in 1993, initially between London-Gatwick and Paphos, Cyprus.
Expansion saw new bases in the UK established, with Dublin becoming the airline's first overseas hub in 1996. Leisure International Airways was fully integrated after the acquisition by First Choice of Unijet in June 1998. This included the entire fleet of aircraft, and an order for four Airbus A330-200 aircraft, which First Choice immediately cancelled in favour of the rival Boeing 767-300 aircraft. Air 2000 received a new colour scheme, however in March 2004 the Air 2000 branding was removed and First Choice Airways branding added.
The airline carried 6.5 million passengers during 2002. The 2005 total was 6.0 million - fifth highest passenger figures of any UK airline. In 2004 it announced plans to refurbish another six Boeing 767-300 aircraft to expand its long haul operations. The airline was the first in the UK to use the Boeing 777-style interior on their 767 fleet. The company had six aircraft flying long haul in 2007, in a two class layouts. All seats featured Panasonic seat back entertainment and mood lighting in Star Class Premier.
In March 2008, the tourism division of the airline's parent group TUI AG, merged with First Choice Holidays PLC, forming the new company TUI Travel. Both Thomsonfly and First Choice Airways were merged as Thomson Airways.
Thomsonfly Limited changed its name to Thomson Airways Limited in November 2008 and the Thomsonfly operating certificate was changed to Thomson Airways with effect from 1 November 2008. On that date, Thomsonfly and First Choice Airways both rebranded their operations to Thomson Airways, merging with a fleet of 75 aircraft, with a number of new Boeing 787 aircraft on order for the fleet. Then, in May 2015, the TUI Group confirmed it was to phase out the Thomson and First Choice holiday brands as it sought to bring its operational names under one roof. The company said that its travel offering would come under the TUI name but it would take up to three years for the Thomson and First Choice names to disappear.
The pair catered for 5.2 million holidaymakers last year, with the Canary Islands, Balearic Islands and Greece among the most popular destinations.
The ditching of brands was part of the group's efforts to simplify its operation and came hot on the heels of its announcement to combine its tour operating, hotel and cruise ship businesses into one unit.
Joint TUI chief executives Fritz Joussen and Peter Long insisted in a statement that they were pleased with the company's progress on restructuring. They said: "Our post-merger integration process is ahead of our original plan. Our growth phase is gaining momentum."
All photos Graham M Simons.
Article from 'Sun-Seekers'
by Graham M Simons.