The Traveller: Departures: A victory for consumers?

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The Independent Travel
THE failure of Airtours to acquire the Owners Abroad group this week could be interpreted as a victory for the consumer. Airtours, the third biggest operator, is easily characterised as the villain of the piece.

Its consumer record has hardly been distinguished. Its poor performance in a recent Holiday Which? tour operator survey supported a widely held view that the Lancashire-based operator is more interested in the quantity of holidays it sells rather than their quality.

This oversimplifies the situation, however. Airtours certainly seems to have pursued the old supermarket philosophy of pile 'em high, sell 'em cheap (a strategy shared by the now defunct Intasun). But whatever the objections of the Consumers' Association, there were plenty of buyers.

Also, one should not overlook the fact that Airtours has been a prominent innovator in the travel trade (cheap packages to the Caribbean, for example, and day trips to Eastern Europe) at a time when other operators have been merely consolidating.

Owners Abroad includes 'brands' such as Tjaereborg and Falcon, as well as upmarket operations such as Sovereign Sailing. If Airtours had been successful in its takeover bid, one can be certain that Owners Abroad would have pruned its range of products. While this would have made sound business sense, it would have led to a reduction of choice - at a time when choice in the inclusive holiday market is already shrinking.

The most serious consequence of a successful takeover, however, would have been the further shrinking of the holiday industry. Would new operators have grown up to challenge the might of Airtours and Thomson? (This is a question that Michael Heseltine should have let the Monopolies and Mergers Commission decide.)

The travel trade has weathered all manner of merger and financial failure. But in the present climate it is unlikely that newcomers could establish themselves in the way that Airtours did 10 years ago.

Last month's collapse of Riva, a recent entrant to the market, highlighted the fact that to succeed, tour operators need the support of the multiple high-street travel agents. With two of the main chains, Lunn Poly and Pickfords, controlled by Thomson and Airtours respectively, and the third - Thomas Cook - now linked to Owners Abroad, there are few niches for newcomers.

One thing is certain: Airtours will not abandon its expansion plans. After this week's reversal, David Crossland, the chairman of Airtours, will be more determined than ever to see the company's growth continue. Having succeeded at the lower end of the market, a new Airtours upmarket operation would seem likely. New plans are expected to be announced within days.