Tour operators and online travel agents face big hikes in the cost of airline seats following the collapse of Thomas Cook, former Abta chairman Noel Josephides has warned.
Speaking at the 2019 Aito Overseas Conferencein Poland, he said the current players – which include Tui and Jet2.com – were “out for domination” over hoteliers and the industry.
This will result in higher charges to third-party operators and agents who want to buy airline seats, said Josephides, who is chairman of Sunvil.
Thomas Cook’s collapse in September took around 2.5 million airline seats out of the market.
Already Tui has said it will add two million seats for 2020, Jet2.com and Jet2holidays have announced 170,000 extra seats for this winter. EasyJet Holidays is targeting one million passengers in its first 12 months after it launches before this Christmas.
Josephides said: “Thomas Cook supplied an endless supply of cheap seats in the market. What we have now is more efficiently run companies which are out for domination over hoteliers and the industry and we have an emerging airline that is now going into packages.
“In the short term there will certainly be a lack of capacity. We have all got to get used to paying more for what we are buying.
“We now have ruthless organisations which want to get any growth for themselves. They will not be as eager to supply cheap seats in the market. The two big operators want to make sure they make money and the rest of us further down do not. One way they can do that is by making sure we pay more for the seats so their packages look cheaper than anything we can put together.
“Certainly the OTAs will have to pay more for those cheap seats that enabled them to compete with package tour operators. When we [Sunvil] buy seats for tailormade holidays in the summer these seats will be more expensive.”
He added: “It’s going to be increasing problem if you are operating against Jet2 or Tui.”
Already Sunvil has been unable to replace fights on certain regional routes, such as out of Bristol, because there are currently no flights directly replacing Thomas Cook’s flights.
Josephides also remain doubtful the airline capacity that has come out of the market will be fully replaced. “I don’t think the void will be filled,” he said.
But Abta’s director of financial protection and financial services John de Vial disagreed. He said: “I think it will happen fairly quickly. Demand has not changed and demand will be fufiled.”
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