Thomson backs down on holiday price war
Thursday 06 May 1999
The move follows investor unrest over the company's reaction last week to Airtours' pounds 800m hostile bid for First Choice Holidays. At its annual meeting last week, Thomson pledged to defend its market leadership in UK package holidays, to raise capacity and to sell more discounted holidays through a new budget brand.
Yesterday the company claimed its original statement had not been fully understood by the stock market, which savaged Thomson shares.
Its clarification, issued as the company meets institutional investors this week, says Thomson will add a million holidays to its capacity over the next two years. But it said much of this would come from capacity lost from the Airtours-First Choice as they consolidate travel programmes, and from other operators.
"An Airtours/First Choice combination would lose volume early on, as will certain other competitors," Thomson said. The company "will replace this with additional capacity, supported by strong marketing and other investment".
The more measured tone appeared to calm Thomson shareholders. The shares rose 2p to 136.5p on the statement.
Airtours claimed Thomson's comments indicated that Thomson believed its bid for First Choice would be cleared by the competition authorities.
If cleared the deal would take the combined Airtours-First Choice ahead of Thomson to be the UK's leading holiday company. Thomson has regarded market leadership as a vital part of its success and has fought strongly to preserve it before. However, since the company floated last year it is in a more compromised position.
Analysts pointed out that if the combined Airtours-First Choice group does not lose some market share as a result of the merger, Thomson's move would result in a flood of extra holidays.
Airtours, which has muscled in on First Choice's planned pounds 1.5bn merger with Kuoni of Switzerland, closed 5.5p higher at 440p.
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 4 How the language you speak changes your view of the world
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...