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
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.
Club 18-30
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
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.
First Choice
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."
No comments:
Post a Comment