Thomas Cook Airlines Group (TCAG) is looking to grow its long-haul activities over the coming years and has selected the Route Exchange, the online platform for air service development, to support its plans for expansion. The carrier has this week formally launched two official Request for Proposals (RFPs) to airports to boost connectivity to existing long-haul destinations and to add further locations to its network.
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Although the Thomas Cook brand is perhaps one of the most recognised names in the travel business, TCAG was only established in March this year to bring the airline activities of the tour operator together under a single organisation as the travel giant recalibrates its business strategy. It brings together the operations of Condor in Germany; Thomas Cook Airlines in the UK; Thomas Cook Airlines Scandinavia in Denmark, Sweden and Norway and Thomas Cook Airlines Belgium forming a single entity with an integrated management structure.
“Condor used to be a full IATA carrier with full commercial independence in its route planning and we are now working to adopt this business model to the other carriers through the TCAG integrated strategy. Our analysis of the business has highlighted synergies across Europe and how our fleet of aircraft can be better utilised from our bases in the UK and Germany, especially in the long-haul market.”
Jens Boyd
Head of Group Long-Haul, Thomas Cook Airlines Group
These business changes have resulted in a revised network development strategy for the business focused purely on the leisure market where TCAG can leverage in-house package holiday sales and marketing strengths to expand its route offering. In the past most of the Thomas Cook airline partners simply used to fly to the destinations set by the needs of the tour operator and focused purely on package sales. However, German carrier Condor was slightly different and had more control over its own activities.
“Condor used to be a full IATA carrier with full commercial independence in its route planning and we are now working to adopt this business model to the other carriers through the TCAG integrated strategy,” said Jens Boyd, Head of Group Long-Haul, TCAG. “Our analysis of the business has highlighted synergies across Europe and how our fleet of aircraft can be better utilised from our bases in the UK and Germany, for example, especially in the long-haul market.”
TCAG has a responsibility for a fleet of around 90 aircraft. The majority of these are short-haul jets, but the combined airline partners have a widebodied fleet number 20 aircraft, comprising 15 Boeing 767-300s and five Airbus A330-200s. By fleet size TCAG is actually one of the largest long-haul businesses in Europe but due to the old management structure these aircraft are not being utilised to their full potential with five of them being utilised on short- and medium-haul routes during the Northern hemisphere summer schedule and three during the Northern winter.
TCAG aims to readdress this deployment issue through these two long-haul RFPs to make sure all long-haul aircraft will be serving long-haul routes during the Winter 2014/15 and Summer 2015 schedules. It will also provide network opportunities to support the growth of the fleet with additional 767s and A330s due to arrive over the coming years on operating lease agreements.
The first RFP covers existing network points seeks proposals for additional frequencies to current long-haul destinations in their network out of new European departure airports that can be served by their B767-300 or A330-200 through a W-pattern. The second will look at the opportunity for new routes between Great Britain, Central or Northern Europe and airports in the Americas, Africa and Asia Pacific that can be served by B767-300 or A330-200 equipment, preferably from the hubs in Frankfurt and Manchester.
“In particular we are seeking to obtain insightful traffic analysis, projections and firm proposals of commitment and incentives, which will also be used to steer our long term network planning process,” added Jens Boyd “There are three long-haul aircraft available year-round and two more in the summer. That is ample capacity. These are currently flying to short- and medium-haul destinations and a good commercial case will make it easy for TCAG’s long-haul planning team to pull these aircraft from these routes and make a clear business case and start flying to a new destination.”
TCAG has shown signs of its intent to expand its long-haul offering with network growth during the past three schedule periods, mainly from Germany where there has been an increasing demand for capacity. In Summer 2012 new flights were introduced from Frankfurt to Baltimore, San Juan and Toronto, while additional weekly frequencies were added on flights between Frankfurt and Cancun, Havana, Holguin, Las Vegas, Mombasa, Montego Bay, Nairobi, Panama City, Seattle and Vancouver. In winter 2012/2013 new links were introduced from Frankfurt to Boa Vista, Cape Town, Sal, Siam Reap and Yangon and from Vienna to Varadero, while additional frequencies were added between Frankfurt and Banjul, Cancun, Mauritius, Panama City, Phuket, Punta Cana, Recife and Santo Domingo.
This long-haul network growth has continued during the current summer 2013 schedule and although there have been no new routes, additional flights are being offered between Frankfurt and Calgary, Fort Lauderdale, Halifax, Punta Cana and Vancouver. The forthcoming winter will see TCAG resume long-haul flying from Munich with new routes to Cancun, Goa, Mauritius, Mombasa, Montego Bay, Punta Cana, Snata Clara, Varadero; introduce new Vienna – Mombasa and Frankfurt – Bangkok connections and boost frequencies between Frankfurt and Havana.
“We are seeking to obtain insightful traffic analysis, projections and firm proposals of commitment and incentives, which will also be used to steer our long-term network planning process. There are three long-haul aircraft available year-round and two more in the summer. These are currently flying to short- and medium-haul destinations and a good commercial case will make it easy for TCAG’s long-haul planning team to pull these aircraft from these routes and make a clear business case and start flying to a new destination.”
Jens Boyd
Head of Group Long-Haul, Thomas Cook Airlines Group
TCAG’s long-haul network is managed independently from its short- and medium-haul activities and no connectivity at its hubs is provided (since both networks serve leisure destinations, there is very limited demand from one location to another. However, there is a little scope for connecting traffic via the scheduled activities of partner carriers.
“The objective from the first RFP is to offer an existing destination from different departure airports across Europe with combined frequencies of up to daily service providing passengers with new options to fly to the destination,” said Boyd. The carrier currently serves leisure destinations that have limited connectivity from its main Frankfurt and Manchester bases but believes many routes could work from other European locations such as Copenhagen, Glasgow, London Gatwick, Munich, Stockholm and Vienna.
“We are constantly looking for new departure airport across Europe to broaden our footprint in the European leisure market,” added Boyd. “But, development of new departure airport needs strong data and financial support to validate feasibility and justify operational difficulties of flights operated in a W-pattern.”
The second RFP focuses on new end destinations for TCAG and although these could be existing destinations already served from the likes of Frankfurt and Manchester would preferably be new locations where there is no direct competition. “We normally fly two or three weekly flights to a new destination to validate demand and test commercial viability and our objective is a year-round service, at best with alternating days from Frankfurt and Manchester,” said Boyd. “We will not look to compete with the likes of Lufthansa but would explore markets that have strong demand peaks for a prolonged period and where TCAG could add needed capacity.”
TCAG believes the Route Exchange RFP will provide the vehicle to bring the required data from the right kind of airports to the carrier in an efficient and timely manner to support its network development strategy. According to Boyd, the process will not only bring opportunities for new point-to-point long-haul services but could also provide for bed procurements and other expenditures in tourism infrastructure at the destination by the company’s own in-house tour operator Thomas Cook and/or other third party tour operators, it works in close coordination with.
“The development of new traffic flows can be engaged in, but needs strong support from local tourism agencies in co-operation with package holiday tour operators – we have a successful history of developing new destinations that way,” added Boyd.
A good case study that highlights this is TCAG’s operations to the Maldives. The company offers a capacity of almost 70,000 seats in a year round non-stop operation from Germany to the Maldives with an average seat load factor of 94 per cent. Holiday expenses generated by its guests amount up to a yearly turnover of roughly $80 million, which flows into the Maldivian economy, boosted by another $10 million per annum of local operational expenditure directly by TCAG at the destination.
“Working closely together with our in-house tour operator Thomas Cook we not only bring additional tourists to the Maldives put also guarantee reliable procurements of beds and thereby invest in the local touristic infrastructure,” added Boyd.
Route Exchange, part of Routesonline, is the online platform for air service development and provides airlines and airports with a secure and trusted platform from which to exchange data and information. Airlines issue their Request for Proposals (RFPs) online where they can specify their particular criteria on how an airport should approach a new service agreement and detail target markets with a particular focus on their data/support requirements. Then, using the unique Route Exchange messaging system, airports can deliver new route proposals directly to the airlines’ network planning team.
“We are delighted that Thomas Cook Airlines Group will be requesting proposals from airports via the Route Exchange. It will allow them to source data and information in line with their chosen criteria and target markets,” said Declan Maguire, Business Development Manager, Route Exchange. “Route Exchange simply facilitates the process of gathering this data and allows them to deal directly with airports online in a cost and time efficient manner. The airline is pro-active in its approach to route development and we wish it every success in gathering the information it requires.”
The two RFPs were officially launched on the afternoon of June 24, 2013 exclusively to Route Exchange members. They will be opened to all airports from July 29, 2013 with the final deadline for submissions set for 17:00 GMT on August 12, 2013.
For more information on the process click here or to learn more about Route Exchange click here. For more information on how to join Route Exchange or how non-members can get early access to this opportunity please contact routeexchange@routesonline.com.
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