Own Airline Of Thomas Cook example essay topic

SWOT analysis of Thomas Cook AG Thomas Cook is one of the leading travel groups in the world. It is the third largest integrated tourism group in the world, behind domestic rival TUI and the UK group MyTravel (formerly Airtours). 'Thomas Cook serves some 14 million customers, owns 30 tour operators and around 3,600 travel agencies selling the group's products worldwide, has 73,000 beds under control, a fleet of 85 aircraft and a workforce numbering some 28,000. ' (Travel and Tourism Company profile- Thomas Cook, 2003) It 'is owned by Deutsche Lufthansa AG (50%) and KarstadtQuelle AG (50%) ' (Thomas Cook Shareholder Structure), which created C &N Touristic in 1998. Its customers spread over Germany, Great Britain, Ireland, France, Belgium, Luxembourg, the Netherlands, Austria, Hungary, Poland, Slovakia, Slovenia, Egypt, India and Canada.

The pre-tax consolidated income of Thomas Cook on the third quarter of 2003 is EUR 79,590,000. Strengths Customers can create their own holiday on internet. Thomas Cook AG allows customers to create their own holidays by bundling flights and hotels on their web site- Thomas cook. com (BRIEFS, Marketing (UK), 2003). It is more flexible and desirable that customers can choose the hotel and flights on their preference rather than paying for fixed package holidays.

Also, customers will be attracted as it is more convenient for them to have their booking online. Thomas Cook has its own airlines and three charter airlines. Those charter airlines are, the Sun Express, providing flights with the Turkish Airline to Turkey; the Thomas Cook Airline UK, the second-biggest charter carrier in Britain and the Thomas Cook powered by Condor, which offers an extensive network. The Thomas Cook Airlines Belgium is the own airline of Thomas Cook. 'These airlines serve more than sixty international destinations in Europe, Asia, Africa and America and operating an extensive route network with flights from twenty-one airports in Germany, Austria, Belgium, the Netherlands and Switzerland. ' (A Short Portrait, 2003) This enables Thomas Cook to provide cheaper deals, for example, hotels and flights, which help to attract customers that have low budget for their holidays.

As it has its own airlines, to and from different countries, this helps it to adopt customers from different countries whereas other leisure companies may not able to have these competitive advantages. It implemented functional software, the MicroStrategy platform to help staff to do their job better (See appendix 1). The MicroStrategy platform consists of a number of business intelligence applications, including the management information reporting system, revenue management analysis, sales analysis and customer call center applications. It also helps to reduce the number of workforce for running the business, i.e. reduce the costs of running the business.

Weaknesses It is concentrate on one industry and not sufficiently diversifies. As Thomas Cook AG is formed by many vertical mergers (A Short Portrait, 2003); it remains in the same industry rather than expanding to another one. This causes lack of diversify products and services, and, cannot provide wide range of products and services to adopt more consumers. Most of its airlines are charter airlines. Charter Airlines charged for lower prices. However, it leads to lower quality of services and products.

For example, free meals and drinks are not provided on board. Also, the schedule of flights are limited, customers might have fewer choice for the time to board. Opportunities It is possible for Thomas Cook AG to expand their charter airline companies and travel to more countries, which allows them to attract more customers from more countries in the world (See appendix 2). Larger Planes can be introduced to carry more passengers in one time; the company can grow without adding plenty of flights this can help to reduce the costs of the company. Threats Macroeconomic environment deeply affect the price of their products and the turnover of the company, i.e. weak economy (see appendix 3), terror attacks, wars and diseases. For example, as a result of Iraq war, SARS outbreak in Asia and hot summer, holidaymakers deferring or canceling their travel plans (Thomas Cook in Upbeat Mood, 17/06/2003) which leads to the holiday price fell by 5.4% while turnover dropped 11.6% as a result of hot summer, Iraq war and SARS (Manny, 2003).

Due to the undesirable situation of the macro-economies, the pre-tax consolidate income of Thomas Cook is -EUR 354,601,000 on the year ended 30 July, 2003 (See appendix 4). Government policy will affect the growth and development of the company. Transport in United Kingdom is zero rated in VAT. However, European Commission plans to impose VAT on package holidays (See appendix 5) which would cost travel agencies in United Kingdom five billion pounds and five thousands of employees could be made redundant. Competitors might also launch its own airlines or co-operate with other airline companies and provide cheap tickets in order to gain market share.

For example, Air 2000 Ltd and First Choice Holidays.

Bibliography

Post A. (1994), Anatomy of a merger: the causes and effects of mergers and acquisitions, Prentice Hall, London Company History, 2003, MyTravel Group Plc, viewed on 20/11/2003 web Group Organisation, 2003, Thomas Cook, viewed on 20/11/2003 web MyTravel shares dive, 06/11/2003, BBC News, viewed on 20/11/2003 web MyTravel sells US business, 22/10/2003, BBC News, viewed on 20/11/2003.