LTNman
5th Jan 2006, 19:21
From the FT
Tui UK has sold Coventry airport as part of its latest move to rationalise its Thomson travel business and to confront the challenge of the rapidly expanding low cost airlines to its traditional package holiday operations.
Tui UK, the British subsidiary of the German Tui travel group, said it had sold Coventry airport, its first UK base for scheduled low cost airline operations, to Cafco-C, an Irish/US joint venture, whose shareholders have chiefly property and airport management interests.
Tui acquired the airport in 2004, when its previous owner ran into planning problems for the development of a new passenger terminal. The airport had previously been used chiefly for cargo operations, but passenger numbers have risen rapidly since the start of the Thomsonfly low cost carrier operations from 8,000 in 2003 to 800,000 last year. A planning inquiry into the airport expansion is due to open next week.
Cafco-C is 75 per cent owned by Howard Holdings, the Irish property development group and 25 per cent by Convergence-AFCO Holdings (Cafcohl), an Anglo-US joint venture formed in 2004 by Convergence Group of the UK and AFCO of the US to specialise in the development of regional airport facilities in Europe.
Cafcohl is expected to bid in a new tender round to take over Exeter airport in south-west England. It is engaged as one of the backers of a new regional airport in Spain and is also considering investments in existing airports in Poland.
Peter Rothwell, managing director of Tui UK, said that the German group was repositioning its UK Thomson travel business, the leading UK tour operator, in order to offer seat only sales from most of its 26 UK airports to complement its package holiday offerings and to enable it to take back some market share from the low cost airlines led by Ryanair and EasyJet, which have increasingly undermined the operations of the traditional charter carriers.
Tui has been heavily restructuring and rationalising its UK operations and has consolidated its branding around the Thomson name.
The old Britannia Airways name for the charter airline has been replaced by Thomsonflyand it has dropped the former Lunn Poly name from its chain of travel agents. It is cutting travel agency commissions and is seeking to take more of its bookings via the internet, where it has consolidated all of its seat inventory on one website.
The Tui UK headquarters has also been moved from central London to Luton airport and the overall workforce has been cut from 13,000 to 11,000 during the last year.
The group has added a growing fleet of short-haul Boeing 737 aircraft since 2004 to support an expanding largely low cost scheduled airline operation from Coventry, Doncaster and Bournemouth airports. This fleet is planned to grow from nine aircraft last year to 16 in the summer of 2006, as the Thomsonfly operation responds belatedly to the challenge from the no frills airlines.
Mr Rothwell said the overall Thomsonfly fleet would grow this year from 42 to 48 aircraft.
He said the group was in negotiations with Boeing and Airbus over the replacement of its existing wide-bodied long-haul fleet of 13 767 aircraft.
It was considering initially the acquisition of 10 new aircraft in a contest pitting the new Boeing 787 Dreamliner against the rival Airbus A350. The aircraft would be for delivery from 2010, when the A350 is first due to enter commercial service.
The Boeing 787 is due to enter commercial service in 2008 and both aircraft offer new generation airframe and engine technology, which will significantly reduce operating costs.
Tui UK has sold Coventry airport as part of its latest move to rationalise its Thomson travel business and to confront the challenge of the rapidly expanding low cost airlines to its traditional package holiday operations.
Tui UK, the British subsidiary of the German Tui travel group, said it had sold Coventry airport, its first UK base for scheduled low cost airline operations, to Cafco-C, an Irish/US joint venture, whose shareholders have chiefly property and airport management interests.
Tui acquired the airport in 2004, when its previous owner ran into planning problems for the development of a new passenger terminal. The airport had previously been used chiefly for cargo operations, but passenger numbers have risen rapidly since the start of the Thomsonfly low cost carrier operations from 8,000 in 2003 to 800,000 last year. A planning inquiry into the airport expansion is due to open next week.
Cafco-C is 75 per cent owned by Howard Holdings, the Irish property development group and 25 per cent by Convergence-AFCO Holdings (Cafcohl), an Anglo-US joint venture formed in 2004 by Convergence Group of the UK and AFCO of the US to specialise in the development of regional airport facilities in Europe.
Cafcohl is expected to bid in a new tender round to take over Exeter airport in south-west England. It is engaged as one of the backers of a new regional airport in Spain and is also considering investments in existing airports in Poland.
Peter Rothwell, managing director of Tui UK, said that the German group was repositioning its UK Thomson travel business, the leading UK tour operator, in order to offer seat only sales from most of its 26 UK airports to complement its package holiday offerings and to enable it to take back some market share from the low cost airlines led by Ryanair and EasyJet, which have increasingly undermined the operations of the traditional charter carriers.
Tui has been heavily restructuring and rationalising its UK operations and has consolidated its branding around the Thomson name.
The old Britannia Airways name for the charter airline has been replaced by Thomsonflyand it has dropped the former Lunn Poly name from its chain of travel agents. It is cutting travel agency commissions and is seeking to take more of its bookings via the internet, where it has consolidated all of its seat inventory on one website.
The Tui UK headquarters has also been moved from central London to Luton airport and the overall workforce has been cut from 13,000 to 11,000 during the last year.
The group has added a growing fleet of short-haul Boeing 737 aircraft since 2004 to support an expanding largely low cost scheduled airline operation from Coventry, Doncaster and Bournemouth airports. This fleet is planned to grow from nine aircraft last year to 16 in the summer of 2006, as the Thomsonfly operation responds belatedly to the challenge from the no frills airlines.
Mr Rothwell said the overall Thomsonfly fleet would grow this year from 42 to 48 aircraft.
He said the group was in negotiations with Boeing and Airbus over the replacement of its existing wide-bodied long-haul fleet of 13 767 aircraft.
It was considering initially the acquisition of 10 new aircraft in a contest pitting the new Boeing 787 Dreamliner against the rival Airbus A350. The aircraft would be for delivery from 2010, when the A350 is first due to enter commercial service.
The Boeing 787 is due to enter commercial service in 2008 and both aircraft offer new generation airframe and engine technology, which will significantly reduce operating costs.