The end of another British institution

From their humble beginnings in Leicestershire in 1841 running train trips, Thomas Cook became a pioneering figure in the European travel industry and for many years dominated holiday travel in the UK and beyond.  Synonymous with package holidays in the last 20 years, they have today finally fallen foul of the digital age.   For many, Thomas Cook has the same brand recognition as other British high street stalwarts, such as Marks and Spencer and House of Fraser, and there are many parallels to the challenges being faced by these retailers with those that have led to Thomas Cook closing its doors today.  Unfortunately familiarity, brand nostalgia and almost 200 years of history was not enough to fight the relentless move to digital supply, as customers increasingly choose to package holidays themselves, or embrace the many online travel agencies who will do it far cheaper, without the overheads associated with a chain of physical retail outlets.  

Thomas Cook operated across Britain, Germany and Scandinavia in recent years, and had nearly 2,500 flights scheduled to operate this week alone. With over 500 routes in operation, it’s likely that somewhere in the region of 400,000 passengers across 31 countries will require repatriation in the coming days. The strength of feeling about Thomas Cook in the industry is such that there is no doubt other airlines will step in to assist in repatriation.Whilst the immediate crisis will see well oiled plans kick in, it’s likely that there will be difficult times ahead for the UK’s regional airports.

This summer, Thomas Cook operated 6.7 million scheduled seats across 10 UK airports.  At Manchester they accounted for 10% of seats this summer, which is a big gap to fill next year.  Cardiff, too, had a similar share, with Thomas Cook scheduled capacity accounting for 11% of this summer’s seats.  This also isn’t the full picture as the group still operated charter services too. 

Whilst there will be some willing contenders to step in and pick up this capacity, it’s unlikely that all next summer will deliver the same level of capacity to the market, especially given the current uncertainties surrounding Brexit. Of course, a less competitive marketplace usually results in price increases for consumers. There’s a certain irony in the passenger pursuit en masse of ever cheaper holidays which then results in price rises but this is all part of the paradigm shift taking place regarding how we buy stuff. It’s a sad day for Thomas Cook, the staff, and for those who’ve booked holidays of a lifetime, wedding packages and special treats, but there are challenging times.