TTG at 70: The long journey to package holiday perfection

In just a few decades, the industry went from a provider of expensive breaks for the lucky few to a “pile it high, sell it cheap” mentality.

This was fine when times were good, and ensured excellent cash flow, but could be a precarious business model with operators at the mercy of hazards like currency fluctuations, oil price rises and natural disasters.

The 1991 Gulf War, which saw fuel prices spiral and affected global travel patterns, proved seismic for the industry and its biggest casualty was ILG, which was brought down by its expensive-to- run in-house airline.

Market evolution

One significant winner emerged from the dramatic fall-out. Airtours, which grew from a one-branch agency in Lancashire run by David Crossland, was to briefly usurp Thomson (now Tui) after decades as the UK’s – and one of Europe’s – biggest operators.

Airtours’ early days were marked by numerous consumer complaints about quality and its infamous “flying pig” Boeing 747 that kept breaking down, but nevertheless the value packages it offered were massively popular.

The already big brands, including Thomas Cook, grew even bigger after a frenzy of consolidation from 1997 after the Monopolies and Mergers Commission investigated the industry and found that despite the major operators’ dominance, competition was so fierce and prices so low that consumers were not disadvantaged. As a result, many independent brands were swallowed up.

Airtours rebranded as MyTravel in 2002 to appeal to the internet generation just before a £1 billion hole was revealed in its accounts, with behind-the-scenes government action needed to stop it imploding. All this took place in the aftermath of the September 11 attacks, which hit bookings as consumers feared another Gulf conflict.

Amid this downturn, a tiny airline, Channel Express, which by night delivered freight, flowers and post, morphed into Jet2.com, operating its first passenger service from Leeds Bradford to Amsterdam in 2003.

Jet2 began solely as a no-frills carrier, and low-cost airlines – which offered unrivalled flexibility and fares – began to dominate short-haul flying, having commoditised it via the internet.

This meant legacy brands had to consolidate and evolve rapidly to survive. In 2007, MyTravel and Thomas Cook merged, with Thomson and First Choice subsequently following.

What did it all mean?

Today, the market has evolved once again. It has become a four-way fight between operators with their own airlines, airlines with tour operators as a sideline, long-haul and destination specialists, and OTAs.

The latter have had a huge impact in the space of little more than a decade – now, half of the top 10 Atol holders are classed as OTAs. As these brands move further into the package travel market, they will grow – and perhaps dominate – the list of Atol holders.

The structure of the package travel industry may be changing yet again, but with almost 32 million passengers forecast to be protected under the Atol scheme in 2024, it’s certainly not dead.