Airtours buys third liner to corner budget cruise market

Airtours has paid pounds 26m for a third cruise ship to add to the pair of liners it currently sails out of Palma in Majorca.

The MS Song of Norway, which has just over 1,000 berths, is the sister ship of the Carousel, which Airtours acquired, also from Royal Caribbean Cruises, in October 1994.

Airtours entered the cruise business only two years ago, attempting to create a new niche market for seaborne packages priced around pounds 500.

Until then, cruises had been pitched at wealthier consumers and priced accordingly. The cheapest cruises then started at about pounds 1,400 a head.

Harry Coe, Airtours' finance director, said the company was able to offer cheap packages because its existing tour infrastructure enabled it to sell cruises at little extra cost.

The company already operates dozens of charter flights to Palma every weekend throughout the summer and, with a chain of 700 travel agents, it can run the cruise operation with a dedicated staff of only 10.

Mr Coe said: "We've not made any secret of the fact that our cruise operation has been an outstanding success since we launched it two years ago. We are carrying 100,000 people a year. It will probably rise to 150,000."

Airtours' initial plan is to operate the Song of Norway with its two other ships in the Mediterranean after the ship completes its final winter cruises for Royal Caribbean, which will lease it from Airtours until next March.

It is expected, however, that the ship will join the Carousel on winter tours to the Caribbean, which Airtours sells mainly to the Canadian market it has acquired through the purchase of two separate tour operators. The company said it had already sold 90 per cent of its cruise capacity for the 1996/97 winter season.

Mr Coe estimated Airtours had won a quarter of the total cruise market. He also believed the company had 90 per cent of the new market for budget cruises.

Airtours faces little serious competition at the budget end of the market, although Thomson entered the cruise business this summer by chartering a ship in the Mediterranean.

Airtours' latest acquisition comes at the end of a week in which the company, in line with other tour operators, reduced capacity and increased the price of late summer package holidays by about pounds 20 to pounds 30 a person.

Airtours led the industry into capacity cuts of about 15 per cent this summer, reducing the number of available holidays from about 10 million to 8.5 million.

That move followed a disastrous 1995 in which overcapacity forced the main operators to slash prices at the end of the summer season simply to cover costs. The result was a collapse of margins and profits.

PROMOTED VIDEO
Arts and Entertainment
tv
News
Prince Harry is clearing enjoying the Commonwealth Games judging by this photo
people(a real one this time)
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Your picture is everything in the shallow world of online dating
i100
Life and Style
Attractive women on the Internet: not a myth
techOkCupid boasts about Facebook-style experiments on users
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
football
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

HR Business Partner (Maternity Cover 12 Months)

£30000 - £34000 Per Annum 25 days holiday, Private healthcare: Clearwater Peop...

Business Analyst - London - Banking - £400-£450

£400 - £450 per day: Orgtel: Business Analyst - Credit Risk - Banking - London...

Project Manager,Conduct Risk,London,£5-600pd

£500 - £600 per day + competitive: Orgtel: My client, a leading bank, is curre...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on