Tui places £4bn order for new-generation B737s

Tui places £4bn order for new-generation B737s

By Lee Hayhurst

Tui places £4bn order for new-generation B737sTui Travel has today unveiled a multi billion-pound investment in new-generation aircraft.

Europe’s largest travel group is to order 60 Boeing 737 MAX aircraft worth £4 billion with options on a further 90 of the narrow-body type.

Deliveries will start in January 2018 and run until March 2023.

The 737 MAX aircraft utilises a new-technology engine type claimed to result in a 13% improvement in fuel efficiency and a 40% reduction in noise over today’s main competitors.

The new 737s will provide lower per seat costs than current-generation aircraft, according to Tui.

Around 80% of the group’s passenger flew on 114 narrow-body aircraft across six airline brands including Thomson Airways in the last financial year.

“In order to maintain cost competitiveness and support Tui Travel’s aim to minimise the environmental impact of its activities, the existing narrow-body aircraft will need to be replaced in the next decade,” the company said.

“The proposed transaction will ensure that the group has sufficient aircraft to fulfil its long-term plans and that the expected accrued value justifies the cost of the purchase.”

Chief executive Peter Long said: “A major part of Tui Travel’s strategy is to provide our customers with unique holiday experiences they can only get from us.

“This multi billion-pound investment in the B737 MAX – representing the future generation of more fuel-efficient aircraft for our short and medium-haul programmes – will be a further driver in delivering this.

“It comes as the first of our Boeing 787s touches down in the UK to commence replacement of our long-haul fleet with best-in-class aircraft.

“We are leading the way in redefining mainstream holidays, and putting our customers at the heart of everything we do is integral to our continued growth.

“I can confidently say that being able to offer our customers the most advanced, comfortable aircraft, whether they are travelling with us to short or long-haul destinations, while reducing our environmental impact, will only strengthen our position.”

Thomson Airways’ first Boeing 787 Dreamliner is due to arrive at Manchester airport this morning. It has flown from the Boeing Everett Factory in Seattle and will be followed with the delivery of a further three Thomson 787 aircraft this summer.

View a timelapse video of Tui’s Dreamliner production

 http://bcove.me/y2fphluo

Thomson will fly the aircraft from Gatwick, Manchester, East Midlands and Glasgow airports on long-haul routes to Sanford, Florida and Cancun in Mexico.

Chris Browne, managing director of Thomson Airways, said: “After much anticipation we are very excited to welcome the 787 Dreamliner to our fleet, and as the first airline in the UK to take delivery we hope our customers will enjoy the unique experience of this revolutionary aircraft.

“The introduction of the Dreamliner is a major milestone in our journey of modernising the holiday experience. Customers will be amazed at the unique look, feel and service – all of which will ensure the unique Thomson holiday experience starts as soon as they step on board this fabulous new aircraft.

“The extended flying range of the Dreamliner also unlocks a host of new and exciting holiday options for our customers, increasing the range of long-haul destinations available with Thomson Airways, from four UK airports this summer.

“This winter we’ll fly the Dreamliner direct to Phuket in Thailand and from summer 2014 we will be introducing holidays to Mauritius and Puerto Vallarta, flying direct on our new 787 aircraft.”

The Thomson 787 Dreamliner will carry 291 passengers.

Thomson Airways will be taking delivery of eight Boeing 787 Dreamliners in total, up to May 2015.

Will Tui bring in single pricing? It ‘could’

Will Tui bring in single pricing? It ‘could’

By Lee Hayhurst

Will Tui bring in single pricing? It 'could'Will Tui Travel stay good to its word and bring in single pricing across web and offline, following the move to price parity by rival Thomas Cook?

The travel giant was early out of the traps last year in indicating this was its ultimate intention when travel distribution and online directorNick Longman addressed the Travel Convention in Turkey.

He indicated that a move to flat pricing would happen within two years as Tui rolled out its new Phoenix in-store technology system and would see agents add a service charge.

But last week his former UK boss, Johan Lundgren, now chief executive Peter Long’s deputy, struck a more cautious sounding note while accepting the logic of single prices across multiple channels.

As Tui revealed plans for new generation concept stores last week, Lundgren stopped short of promising to bring in flat pricing or setting a date by which it would be implemented.

He told Travel Weekly: “It’s not unlikely that this will come at some point. There is logic to the idea that there should be the same price in all channels – that is a logical evolution.”

Asked for an assurance that it was Tui policy to bring it in, he said: “It could be coming,” adding: “there is a logic to the fact that the price is the same in all channels.

“We should remember some of the logic about the online discount is that if the customer does the work themselves they get something for it.”

In what some have seen as an audatious bid to outflank its rival, Cook announced its move to price parity with very little fanfare shortly before Christmas.

The move to flat pricing was widely praised in the trade for offering customers clarity and an attempt to move them away from the assumption that online is always cheaper.

Speaking during a filming day ahead of today’s Barclays Travel Forum John Hays, managing director of Hays Travel, said the impact had been noticeable and was welcome.

“Thomas Cook seems as if they are implementing what they said they would in terms of reducing discounting online – it appears they are implementing a one-price strategy. “Tui said they needed to do that, but it’s less obvious with their online discounting.”

Triton would have stopped cruise cuts, says Freudmann

Triton would have stopped cruise cuts, says Freudmann

By Lee Hayhurst

Triton would have stopped cruise cuts, says FreudmannThe recent cuts to cruise commission would never had happened if the old consortium superpower Triton had still been around, according to its former chairman.

Steve Freudmann, also a former Abta president and now ITT chairman and chief executive, said the now defunct Triton would have acted as a powerful force in opposing the cuts.

The super-consortium was formed by Advantage, Worldchoice and Global in the wake of Tui’s decision to cut commission to 7%, announced at the Abta Travel Convention in Marrakesh in 2009.

Tui eventually had to reverse its decision, but the group fell apart acrimoniously due to what was described as a clash of personalities within the Triton board.

Speaking to Travel Weekly on Wednesday during filming ahead of this year’s annual Barclays Corporate Travel Forum, Freudmann said:

“Had Triton still been in existence the reduction in cruise commission would not have taken place and we would not have seen some of the problems we have seen in recent years.

“Unfortunately it [Triton] fell apart due to personality clashes around the board table.”

Reflecting on the Triton era this week after he announced his retirement from Advantage, John McEwan said there were ideological differences of opinion.

“Triton did not work for different reasons. There were differences of opinion in how to lead things.

“George Begg (the Global owner) was clearly interested in optimising performance of the company for himself.”

Freudmann accepted Begg did have personal commercial motivations for making Triton a success but that these were shared by the entire membership.

“George was trying to maximise the value of his company but to do that he had to maximise the benefit for all of the members that formed part of the overall company.

“Yes, it would benefit George, he owned the thing, but ultimately we all had the same interests at heart but we could never see eye to eye.”

In the aftermath of the Triton fall out Global’s Australian owner Stella Travel Services was linked with buyouts for Worldchoice and Advantage, which unlike Global were both owned by their agent members.

However, The Travel Trust Association swooped for Worldchoice and the deal was finalised in October 2008 as Advantage officially left Triton. McEwan was chairman of Triton at the time.

McEwan said: “We [Advantage] have had approaches along the way but when I evaluated those offers with the board we came to the conclusion that there was insufficient value available to make it attractive for each member.

“It was felt we were in a position of strength. We were already the largest consortium by some distance. Members were really happy with what they were getting at the time and a one-off cheque for their shares was quite transient.”

Both McEwan and Freeudmann agreed that since the Triton days the consortia have become far less cut throat in terms of competing against each other and have developed in different ways.

“When I came in you had three groups all vying with each other for members. There was not the gap then that there is today.

“We have become different, we have a much more diverse mix of members. Global has a different model and Worldchoice has been subsumed in to the TTA. It retains its brand but the closure of the Peterborough office is a real break with the past.

“Advantage has a powerful corporate travel membership and in lesisure we have got a much different mix. We have all the big players in the UK like Barrhead and Dawson and Sanderson and we have lots of individual location members as well.

“Other consortia have large members but by and large the majority are smaller retail members.”

Freudmann said the consortia no longer see each other as major competitors. “They see the independence of the consumer as being their biggest challenge rather than the guy across the road [other consortium] because the guy across the road is having the same problems and challenges.”