TUI readies for growth

Capacity cuts at TUI Travel UK could be at an end, with the group expecting to keep mainstream availability for summer 2010 on a par with this and add capacity as the economy exits recession.

TUI Travel UK managing director Dermot Blastland said the years of capacity cuts following TUI’s consolidation with First Choice were over and a recovery would see the group compete on price with anyone.

He told the Barclays Travel Forum: “The consolidation is finished. Over our five-year plan we are looking at growth. We would go into a downward spiral without it.”

Blastland said: “We cut capacity [for this summer] by 15%. But I see supply in 2010 as level. What we have taken out was price-led, deal-driven, the bottom end of the market.”

He added: “We are aware the bottom feeders will all come into the market again [when it recovers]. But we are using this window to become really efficient so when we come out we will be able to fly at the bottom end [of the market] as efficiently as anyone.”

However, much of the capacity increase could be long haul, with TUI Travel the UK-launch customer for the Boeing 787 Dreamliner which can fly long distance from regional airports. Blastland expects delivery of the first at the “end of 2011, early 2012”.

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