The huge TUI Group has announced that it plans to leverage savings across its five tour operator airlines, comprising 140 aircraft carrying 13m passengers to 180 countries a year.

 

TUI’s top management said this month it now plans to create a ‘virtual airline’, combining the purchasing power of all five carriers in several sectors. Currently, the company owns TUIfly (Germany), Thomson Airways (UK), ArkeFly (Netherlands), Jetairfly (Brussels) and TUIfly Nordic (Sweden).

 

In the huge holiday company’s recent €20bn turnover full-year results statement, both joint CEOs Friedrich Joussen and Peter Long said if all five carriers were counted as one, then this would rank the entity as the world’s seventh biggest airline.

 

As such, they also underlined the big savings to be had: “We expect to benefit in the areas of aircraft purchasing and financing, engineering and maintenance, IT and joint long-haul planning and procurement. We are targeting €50m ($54.9m) operational efficiency improvement by 2018/19, with delivery commencing in 2015/16.”

 

 

Both CEOs added that the intention is to clearly ‘future-proof’ the group’s airlines and they say this will only be possible if TUI leverages the potential economies of scale.

 

“The way our five airlines are operating will further improve as we are building a competitive aviation platform. In essence, we are building a virtual airline.

 

 

TUI’S FIVE AIRLINES TO ACT AS ‘ONE’ IN FUTURE

“This means that we will act ‘as one’ wherever it makes sense to do so, maintaining local differences where the benefit of that differentiation is greater than that of harmonisation. Organisational structure, the business model and scale are the main elements of our central platform.”

 

The company adds that the benefits of a vertically-integrated model are clear, since TUI controls its end-to-end customer journey ‘from inspiration and advice, to booking, flight, inbound services and accommodation’.

 

The fact that TUI is also the only leisure airline currently operating the Boeing 787 Dreamliner also unlocks further opportunities for the company as this fleet grows, says management, both in longer-haul destinations, longer exposure to passengers/customers and important added fuel efficiencies.

 

Whether TUI will decide that it ‘makes sense’ to explore more synergies in relation to onboard retail sales remains to be seen, however. As is well known by those with long memories, Thomson’s inflight duty free tender stalled more than a year ago when it is said to have come down to two companies in the final round.

 

However, the company has gone into lockdown as far as any comments or statements are concerned relating to whether this tender is actually still live, being extended, or even up for re-engineering.

 

Having said this, joint TUI CEO Peter Long did make a very brief passing reference to this during his keynote speech at the Cannes TFWA conference last October.