wooly
Imho, is it really fair to compare Thomson with the likes of FR & EZY?
You are absolutely right, Thomson tried the cheap and nasty low cost operation and decided it was not the image that their customers wanted and that it was cheapening the brand.
The question is however, if FR and EZY are making money out of it, why couldn't Thomson? Why couldn't they see off the low cost market and stop them gaining market share in the Med?
Years ago, the only way to get to the sun cheaply was with the charters and I think it would be fair to say that they never saw competition coming in the form of sheduled operators, eg FR/EZY. The charters have reduced capacity steadily over the years and the low costs have aggressively increased capacity into the corecharter market to the extent now that this core market has moved further east, and further out of the Eurozone.
So no, they are not chasing the same market at the moment, but whether the ability to grow revenue still exists within the IT model is key to any growth, but although the charters were forced to move east to maintain their margins as the Eurozone became more pricey for the tourist, the timeshares and villas remain where they were ten years ago, on the Algarve, the Costas and the South of France.
Thomson moved into longhaul with the aquisition of the right equipment 20 years ago, but the competition from the sheduled carriers, such as BA/Virgin/Emirates in the form of their own in house leisure products should not be underestimated.
I see the families sticking to the Med or southern Europe for their holidays for sheer convenience, and the young well off singles/newlyweds (ie, no kids) using the scheduled longhaul for their citybreaks or luxury resorts. All of these options are a lot cheaper now with the scheduled operators than they were 10 to 20 years ago when the IT market was growing.
Hopefully, TUI being a savvy company with cash in reserve will not want to fall behind.