TUI holds regional airports to ransom!

[Buster the Bear]

Travel Agents could find themselves with fewer packages to sell from regional airports if ransom demands by TUI UK for cuts in passenger fees are rejected.

TUI is embarking on a tour of all UK airports asking for big cuts in what it pays per passenger to match the rates paid by no-frills airlines.

It is demanding that fees are slashed from its average of £15 per passenger to about £5 – the figure it says is paid by airlines such as EasyJet and Ryanair.

TUI and its inhouse airline Britannia Airways operate from 20 UK airports, including some – Blackpool, Southampton, Exeter, Aberdeen and Teesside – where it has only a single flight or serves very few destinations.

TUI hopes other operators will add to the pressure.

TUI Northern Europe’s airports adviser, Bill Savage, said: “This is equally relevant to MyTravel, First Choice, Thomas Cook or any operator threatened by the low-cost carriers. “Airports are charging the full rate to the likes of Britannia and First Choice that have been there since the year dot. “Yet they are incentivising the low-cost carriers to such an extent that it is cross-subsidisation. “Currently, some airports are offering zero or £1 a passenger to new airlines where their normal rates are £15 to 16. We want a level playing field.”

If its demands are not met, TUI claims it will cut regional airports out of some of its programmes from next winter, with a full-scale retreat by summer 2006. “We want to invest in airports that value our business,” said Savage.

Simon Maunder, managing director of West Country miniple Lets Go Travel, backed TUI’s plea for equal treatment. He said: “If Thomson pulled out of Exeter or Bristol, it would be a huge blow because Airtours has reduced capacity at both. “We would be very saddened – we love Thomson product.”

TUI estimates that it typically pays about £9 million a year in fees to a medium-sized airport. It argues that every passenger spends an average £5 in the terminal shops, generating millions.
Thomas Cook Airlines managing director Glen Chipp also backed the campaign. “As charter carriers, we should not be subsidising low-cost airlines,” he said. “If it means teaming up with other charter airlines, we are 100 per cent behind it.”
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[onion]

Buster this may of already happend as Thomson are to base a 757 at Teesside next summer, so maybe Teesside have already reduced its fees.

Does this mean Tui are going to keep all the extra cash or will customers see a reduction in holiday costs?

[niknak]

What "Billy the Kid" Savage forgets is, that the TUI product is seasonal, where as the low cost scheduled operators offer a year round service.

Increasing availability of low cost scheduled flights has led to more families organising their own holidays as opposed to using the traditional travel agent.

Consequently, travel agents - especially those owned and operated by airport companies - have become more savvy, and will not tolerate this sort of crap, they would rather give their business to non UK airline operators, who charge them less, than be held to ransom by the types of TUI.

I know that this is true of at least 4 UK airport operators, and the list is increasing, while TUI's profit margin decreases.

[johnwalton]

Are TUI really stupid enough to think that just because an airport "wants their business" that means people are willing to travel from there? I know that if they withdrew from NCL, which is unlikely, I certainly wouldn't be travelling to MME/MAN just to save £10 or £15 on a package holiday price.

I also don't think these cost-savings would be reflected in their holiday prices, the IT companies keep complaining about not being able to sell holidays, so why don't they try lowering their prices? TUI, First Choice and MyTravel are much more expensive than companies such as Kosmar, Libra and Golden Sun. Whenever I look these companies are £150 cheaper on average (unless you're lucky and get a discounted deal from the travel agents). Not to mention the potential savings from buying a cheap flight + hotel seperately. Its all very well trying to lower costs, but if they want to sell more holidays they'll need to pass on these cost savings.

[onion]

Well obviously their not John. In actual fact many people from the Teesside area travel upto Newcastle to get holiday flights for the simple reason that Teesside either didn't fly to the desired destination or that any flights to the desired destination were full.

Also the basing of an aircraft by Thomson at Teesside was announced earlier this year and as far as im aware is not at the expense of Newcastle. More I think Thomson realising that they can muscle in at Teesside where Mytravel have fallen down.
I know my earlier post is in one way a contradiction to the fact Thomson are threatening to pull capacity at regional airports, but on the other hand Tui also state that they are willing to invest in airports that value their business.

John why does everything in the North East have to revlove round Newcastle Airport?

[GrahamK]

For a cheap holiday, people are willingto travel to any airport for it. Eg, I know someone from Aberdeen, who travelled down to Gatwick (spent a night at a friends in Brighton) for a holiday to Tenerife with Airtours I think it was.
Im from Scotland and happily fly from MAN if its cheaper. Sure I'dprefer NCL or PIK, but if MANs cheaper then so be it.