Marketing experts give Cook rebrand cautious thumbs up

By Juliet Dennis

Marketing experts gave a cautious welcome to Thomas Cook’s decision to rebrand the company with a new heart logo and 'Let’s Go' strapline.

There is no doubt such a large scale change – which sees the globe logo and 'Don’t Just Book It' strapline disappear – is high-risk, according to Brighter Group chairman Steve Dunne.

“After all your logo is the personification of the brand; the symbol that the customer becomes familiar with and, if it is doing its job properly, reassures and reinforces everything about the brand in their eyes,” said Dunne.

The challenge to keep pace with change is one many traditional retailers face, added Branwell Johnson, acting editor of Marketing Week magazine.

He said: “Thomas Cook has the same problem as many legacy consumer retail and service brands in trying to transform itself into a 21st century powerhouse – it has to shed all its cumbersome baggage in terms of an overstuffed brand portfolio and the associated costs and truly grasp new changes in customer behaviour and technology. “

Thomas Cook’s director of sales, marketing and ecommerce Mike Hoban said the decision to rebrand now was deliberate. “I would rather make the decision now when the brand is in a strong place than leave it until it is too late like Woolworths. Too many brands have disappeared on the high street because they didn’t respond to changing customer dynamics,” he said.

Both Dunne and Jonhson said it was too early to tell how successful the rebrand would be but they cautiously welcomed the change.

Dunne said: “Only time will tell if Cook has got it right but it feels like a good move to me. The heart symbol will resonate powerfully with consumers and the warm colour and hint of sunshine gives it a holiday and special feel at the same time. Certainly the 'Let's Go' strap line is positive and a call to action.”

Johnson added: “It's too early to say whether Thomas Cook has done enough to ensure long-term business survival but it is surely a sign of confidence that it is now prepared to introduce a new visual identity and slogan.

“In themselves, these changes might not mean much to business analysts concerned with share price and quarterly earnings and observers often lambast companies they see tampering with their logos and lines as rearranging the deckchairs on the Titanic.

“But such changes can indicate a return of the swagger and energy a big business should project and when deployed correctly and not just as a “fig-leaf” for other failings they can both signal and support a company's root and branch overhaul of business strategy. “

Danny Rogers, editor-in-chief of the Republic Group of magazines including Marketing, Campaignand PR Week, admitted he was unsure about the strength of the new heart logo, which he compared to other “umbrella” branding attempts such as Tui Travel’s smile and Wall’s ice-creams’ heart logo. “It’s not a new idea,” he said.

But he hailed the investment in consistent, long-term TV advertising as a smart strategy to effectively build the brand as more consumers watched TV through a variety of digital channels.

The ultimate challenge for the company was to ensure  the new brand identity was backed up by a better holiday experience, he added. “Is going on a Thomas Cook holiday noticeably better than going on other holidays? It needs to feel as if it is.”

Thomas Cook reveals rebrand

By Phil Davies

The Thomas Cook globe and strapline “Don’t just book it, Thomas Cook it” are to disappear from today and be replaced by a new group symbol across all markets.

A ‘sunny’ shining orange heart is the new unifying Thomas Cook brand and will appear with a new strapline: “Let’s go!”

The image revamp is the third major strand to the group’s turnaround plan led by chief executive Harriet Green following the ‘high tech, high touch’ strategy announcement in March and group refinancing in May.

The new brand strategy was unveiled this morning.

The ‘sunny heart’ will replace the current ‘globe’ symbol on websites, and in Cook’s international stores, airline fleet and throughout its UK headquarters and overseas offices.

The group's many leading brands, such as Neckermann in Europe, Ving in Sweden, Condor in Germany and Elegant Resorts in the UK, will all connect with the ‘sunny heart’ in different ways.

Simplifying the brand proposition is a key element in the group's profitable growth strategy, building on Thomas Cook's already strong brand heritage and projecting its transformation into a single united business, the group said.

Green said: "At our Capital Markets presentation in March we committed to reduce our multiple UK brands from 30, to less than 10 consumer facing and B2B brands, eliminating confusion and making it easier for customers to interact with us.

“This major milestone in the transformation of our company, as we continue to develop our product offering and focus on our omni-channel approach, is much more than the rollout of a new logo.

“It symbolises how we are leveraging the combined power of the group to maximise our presence in the mind of customers, whilst helping to reduce cost."

Group chief financial officer Michael Healy added: "Having already piloted this approach in our North European businesses since November 2012, we have proven that it has heightened brand awareness, driven more website traffic, increased early and repeat bookings and improved conversion rates.

‘This unification has been developed internally and we are rolling it out appropriately for this stage in our transformation journey."

Green added: "What we’re announcing today is a renewed promise to our customers, our people and suppliers.  A promise that we’re putting them at the heart of our transformation it’s the essence of who we are.

'The unification of our brands under the Sunny Heart is three fold; it will make it easier for our customers to understand the full strength and end-to-end value of the entire Thomas Cook Group coupled with our full innovative offering of our services and products; it will show more clearly what differentiates us and how we provide a total experience along every touch point - from research, to booking, to anticipation, to the holiday itself; and importantly, it will clarify our customer promise– a complete range of inspirational experiences for our customers.”

Thomas Cook TV ad banned after consumer complaints

Thomas Cook TV advert has been banned after viewers claimed it could cause harmful copy-cat behaviour among children.

More than 100 complaints were made against the ad which showed a holidaymaker remove a valve from a wheel of one of the company's coaches with a pair of pliers to cause a flat tyre in an apparent bid to avoid returning home from a sunny destination.

The advertising watchdog ruled that the Thomas Cook campaign was "irresponsible" after it received 118 objections.

The Advertising Standards Authority upheld complaints which suggested children could emulate the potentially dangerous scene.

The ASA ruled: “Although we were satisfied that adults would not view the ad as condoning the act of removing the tyre valve, we considered that children, including teenagers, were unlikely to identify the fantastical nature of the story.

“We also noted that the scene in which the tyre valve was removed was central to the ad's narrative and, because of the risks to children in emulating that action, considered that the ad unreasonably featured that behaviour.

“We therefore concluded that the ad was irresponsible.”

Cook argued that the “horrified and outraged” reaction of the other holidaymakers in the ad indicated that the behaviour of the man letting down the tyre was not condoned.

The company said it did not consider that the ad was irresponsible because it clearly showed a comical scene and the man's actions were immediately challenged as being wrong.

Traveling solo

By Donna Tunney

Snapshot: Solo trends

Travel insurance provider Travel Guard took a "pulse poll" earlier this year to identify solo travel trends. Some 450 U.S. travel agents responded to its email survey. Key findings:

• Flying solo: Nearly 60% of agents said more of their clients are flying alone now compared with 10 years ago, and 43% said they are doing so because they are widowed or divorced.

• Gender gap: The majority, 73%, of responding agents said that more female travelers than males embark on solo trips.

• Golden years: According to 44% of respondents, most clients taking solo trips are 55 or older, followed by those 45 to 55 (29%); 35 to 45 (18%); 25 to 34 (9%); and 18 to 24 (0.4%).

• Across the pond: Forty-five percent of agents identified Europe as the most popular destination for clients booking solo travel, followed by Mexico/Caribbean (33%) and the U.S./Canada (15%).

• Favorite products: Respondents said the most common types of accommodations for solo travelers are resorts or full-service hotels (46%) and cruises (40%).

• Budget wise: Most agents (82%) reported that their solo clients spend less than $4,999 on a trip.

• Play it safe: Forty-seven percent of respondents said a solo traveler's greatest concern is encountering a dangerous situation without a travel companion to help. Additional concerns include medical emergencies (23%) and flight delays or cancellations (24%). -- D.T. 

The dreaded single supplement has long been an albatross around a solo traveler's neck, but an increasing number of land and cruise suppliers are coming around to the notion that a customer vacationing alone deserves a fair shake.

To be sure, these suppliers are the exception rather than the rule, as the majority of providers continue to charge a 100% supplement fee, and sometimes more, so that an individual traveler is paying at least the equivalent of two cruise fares or two tour rates.

Solo clients can be a tough sales pitch for retailers. Aside from the single supplement cost, there often are concerns about safety and about feeling like a fifth wheel.

"The single supplement is a big obstacle. Nobody wants to get soaked," said Marie O'Brien, an agent with Acendas in Mission, Kan. "But it isn't only the cost. A lot of would-be solo travelers are older women who have the money, but they're afraid something could go wrong, like missing a flight and becoming stranded somewhere, or becoming ill on a trip, and they'd be all alone."

Even with the obvious drawbacks, the volume of solo travelers is considerable. They account for 11% of all U.S. adult leisure travelers, and they take 4.3 trips each year, according to data from the U.S. Travel Association.

In recent years, several prestigious travel suppliers who cater to upmarket clients have embraced the potential revenue from solo travelers by revamping their policies to include low or waived single supplements on a wide range of vacation products.

Strategies unfold

Luxury tour operator Abercrombie & Kent is one of them. It decided to realign its policies three years ago with an eye toward actively courting the solo-traveler market. A collaboration among the company's executives and ground suppliers resulted in its Solo Savings program, where single supplements are either waived or reduced by as much as 75% on dozens of departures.

Since the program launched in 2011, the company's solo customer bookings have spiked by 27%.

"We did a careful analysis of what solos are looking for," said Bob Simpson, A&K's vice president of operations and small ships. "The goal was not necessarily to create a separate product line but rather to present a value for people traveling alone, because they tend to be penalized with single supplements. So we targeted specific programs where we could eliminate the supplement."

A&K attracts an upscale, professional crowd, which makes them an attractive market.

"Our solo travelers tend to be an older demographic, many of them retired with expendable income, and 70% are female," Simpson said.

The company, aware that safety and security are important issues for solo travelers, particularly mature women, takes steps to reassure prospective clients.

On its website's Solo Traveler page, for example, A&K uses marketing phrases such as "Travel on your own -- but never alone," and "Your tour director is both a guide and a companion."

Grand Circle Travel is another example of an operator that offers a wide range of departures with no single supplement. Its sister company Overseas Adventure Travel waives single supplements on all land and small-ship vacations and on trip extensions.
Both firms feature the Solo Traveler Challenge, which promises that if a customer finds a lower solo price on any comparable international trip they will match that price and then deduct $500.

While these supplier examples cater mostly to an older clientele, the solo travel market includes younger people, too.

Contiki, the tour operator for customers 18 to 35, has a growing share of independent travelers. President Melissa da Silva said that 46% of Contiki's guests last year traveled solo, and of those, 63% were females.

"We have found ourselves to be a great option for that solo young woman traveling abroad, because we provide a sense of security," da Silva said.

The numbers are higher for certain destinations, such as Asia and Latin America, where Contiki's solo guests account for 55% and 58%, respectively, of all customers.

Contiki's single supplement is relatively low compared with most operators. It varies by tour but averages about 25% of the double-occupancy land cost, da Silva said.

Contiki offers to pair up same-sex roommates on all itineraries, and for those who agree to share a room, the single supplement isn't an issue. Several operators provide this option, which likely appeals more to younger clients than to older ones.

Old and new ideas

Norwegian Cruise Line is the pioneer in bringing single-passenger studio cabins to mainstream lines. Accommodations for 128 solo guests debuted on the 4,000-passenger Norwegian Epic in 2010, and the studio accommodations will also be featured on the Norwegian Breakaway, set to debut this month, and the Norwegian Getaway, entering service next year.

In 2011, Royal Caribbean International said it would install three cabins for solo travelers on the 2,112-passenger Radiance of the Seas. Royal is expanding its single-passenger options aboard the 4,180-passenger Quantum of the Seas, which will enter service next year with 28 studio cabins that will be sold without a single supplement.

"There's been a fair amount of interest in that recently," Adam Goldstein, line president, said during a recent press conference.

But while Norwegian and Royal have taken these steps to attract solo guests, the single-supplement policy persists in double-occupancy staterooms.

Norwegian Epic's studio rates vary by departure, but they are less than what a 100% single supplement would add to a double cabin. A seven-day Aug. 24 cruise from Barcelona, for example, would cost $1,099 in a studio, while an inside cabin costs $899, per person, double occupancy, according to website pricing. The single supplement on that inside cabin would bring the cruise fare for a solo occupant to $1,798, or roughly $700 more than the studio stateroom.

"The cruise industry operates under a very different business model than say, your regular hotel and resort, which may usually have unoccupied rooms and do not offer inclusives beyond bath amenities and in-room coffee," said Harry Liu, manager of global brand communications for Royal Caribbean International and Azamara Club Cruises.
"Because food, entertainment and other amenities are standard inclusives across the cruise industry, our industry's pricing structure is based on at least two paying guests per stateroom," Liu said. In the case of Royal, he added, it would mean that one guest in one double cabin would pay the price of two guests, a 100% supplement.

Tavia Robb, public relations manager for Celebrity Cruises, said, "Celebrity doesn't really offer any substantial single supplement program. If a cruise fare is $1,200 per person [double], for example, and someone sails alone, she or he would pay $2,400."

Come one, come all

In the wider cruise market, it's the river ship companies and the luxury brands that are most solo-traveler-friendly. Several river cruise companies, including Uniworld, AmaWaterways and Avalon Waterways, waive supplements on many cruises, and luxury lines such as Silversea Cruises and Crystal Cruises reach out to solo guests with low fees. (Read related story, "On AmaCerto, one not such a lonely number.") 

Silversea typically offers select sailings with a 10% single supplement, and Crystal this year added a dozen itineraries with a 10% supplement, offering 26 cruises with reduced single fares.

Jack Anderson, Crystal's senior vice president of marketing and sales, explained that "because we're a luxury brand, we do not plan to operate at 100% berth occupancy. We budget to operate at a 96% or 97% stateroom occupancy, and that gives us the flexibility to accommodate 50 to 60 singles per sailing. So it's part of our business plan that we want singles, and we will price attractively for singles."

Crystal accommodates singles in other ways.

"A lot of our onboard activities are designed to be considerate of solos, Anderson said. "We have the 'Table of Eight,' for example, in our alternative restaurants Silk Road and Prego, where solo travelers can dine with other solos. And we have dance hosts on every cruise.

Besides, Anderson said, the solo market is only going to grow.

"We believe the number of people healthy, wealthy and able to travel is increasing, and it's a demographic opportunity," he said. "My prediction is that [the solo market] will be strong and viable, and it will increase."

He said that would be particularly true as the 79-million-strong baby boomer generation retires during the next 20 years. Presumably, some percentage of them will travel alone as widows or widowers, or as divorcees.

"We want to be out in front with the solo market and capitalize on it," he said. "But we have to be careful not to stereotype solo travelers. Many are married and choose not to travel as a couple: He wanted to go to a golf resort, and she wanted to go to Asia."

Anderson said the line decided about a year ago, when it still had a 25% single supplement, that it would offer a lower supplement of 10% on a capacity-controlled basis.

"We designated those sailings based on the diversity of itinerary, the time of year, etc., so that our guests would have a wide menu to choose from," he said. "If we reach certain numbers that conflict with reaching budget goals, then the 10% would have to go away, and we'd go back to 25%."

New mobile app and tech-laden concept store for Thomson

By Travolution

Leading European tour operator Thomson has launched a new mobile app ahead of the summer holiday period as it prepares to unveil its next generation hi-tech store of the future.

The MyThomson app will allow customers to access information about their trip while on the go including destination guides, weather updates and flight times.

It will also be integrated into social networking sites like Facebook and Twitter.

Johan Lundgren, deputy chief executive of Tui Travel, said: “Tui Travel is an online driven business and we will continue to enhance our mobile offering.

“The launch of the MyThomson app is an exciting new way of connecting our customers with Thomson anytime, anywhere, anyway.

"Innovation is at the heart of our strategy to deliver future growth, and the launch of the MyThomson app reflects our position as market leader.

“The annual summer holiday is a significant purchase for our customers and we know that they not only spend time choosing and planning their holiday but also looking forward to it.

“The app is a fantastic way to get customers more excited about their holiday and will help them keep up to date with all the information they need in one place, just a tap away.”
 
Meanwhile, Tui will announce next month which location has been chose for its new concept store that it promises will harness the latest technology to drive customers in.

The firm hopes to have refitted 10 of its 700 UK stores by Christmas and as many as 100 in coming years.

Tui said  a key strategy is “selling directly to our customers through multiple channels, and so our retail network remains important to us”. It added "the emphasis of these new shops will be on service in a modern environment". 
 
Kathryn Ward, director of retail and financial services, said: “Our next generation store recognises the importance of people when it comes to choosing and booking a holiday, whilst integrating technology into the whole experience to really bring it to life.

“Customers will be able to immerse themselves in stunning, rich and evocative content as they research and browse our unique holidays in-store.”
 
 Key features of the next generation Thomson shops include:  
 
- The shop front will have a giant immersive video wall (2m x 3m) to showcase new video content and imagery of the holidays combined with evocative sounds and  aromas

- At the entrance an interactive map and interactive table will entertain customers and help them research holidays and find out more about the broad range of product available

- The Advice Bar will give customers the chance to browse the Thomson and First Choice websites on self-service laptops with staff on hand to answer any questions

- Free customer WiFi will also enable customers to use their own devices to research in store and check out review content

- High definition screens and booth projections around the store will feature changing images and videos to inspire customers and give them a feel of what to expect from their holidays before they book

- The store will be zoned to meet the needs of all customers and staff will join them to help with their holiday decisions.  Customers can choose from sitting around a laptop in the pool area, self-serving at the Advice Bar or have a more personalised experience in the booths where images of their chosen holiday will be projected on the wall

- All customers will be served with barista style coffee to further enhance the booking experience 

Transformation plan starting to have impact, says Cook

By Lee Hayhurst

Thomas Cook said its business transformation plans were starting to have an impact as it announced higher margins in its first quarter to December.

The travel operator and retailer saw  revenues of £1,724 million in the three months to the end of December. And it achieved gross margin of 21.9%, up 1.3 percentage points over the comparable period last year, it said in a trading update.

The group said plans to achieve annual savings of £100 million over the next two years to 2015 were on track and a further £60 million of savings had been identifed.

Harriet Green, group chief executive, said she was particularly pleased with Cook’s UK performance.

“As we continue to strengthen Thomas Cook and determine our profitable growth strategy for the future, the power of our brand remains key to the transformation.

“We have seen stronger operating performances in our major markets - the UK, Germany and the Nordics. I am particularly pleased with the improved performance in the UK as the benefits of the turnaround plan are reflected in its operating results.

“Our business transformation is firmly on track. We have further strengthened our leadership team and the pace at which we are driving change gives me confidence that together we will achieve our near term objectives and much more.

“The business has generated higher gross margins than we did last year and this will remain an area of focus for us through the financial year.

“Our cost-out initiatives and improved cash management will be important contributing factors to the Group’s future performance and continue to receive strong focus in all parts of the business.

“Although global economic conditions and consumer confidence remain challenged, our business transformation is firmly on track.”

Cook said its Business Transformation programme was “firmly on track” to deliver on its three key elements:

• building an effective organisation: high quality executives, bringing a wealth of experience, appointed to the Thomas Cook leadership team;
• addressing costs and cash management: on track to execute announced £100m of cost reductions with a further £60m identified;
• profitable growth strategy: undertaken rigorous, and independently verified, market and customer research, to ensure strategy and future resource allocation is based on extensive and fact based information.

Cook said higher gross margins and lower overhead costs were reflected in the Group’s improved underlying operating which saw losses of £70 million compared to £93 million in 2012

It reported lower net debt of £1,559m, which had been reduced by £86m year on year and higher liquidity headroom of £290m, up £72m over the prior year due to improved cash management disciplines

In a statement it said: “Winter and Summer bookings are robust, in-line with expectations as our strategy of improved capacity management results in higher sale prices and improved margins."

Cook also revealed the completion of the first phase of “one of the largest customer surveys undertaken in the sector” involving nearly 18,000 consumers from the UK, Sweden and Germany. The survey results have been combined with in-house data from Cook’s 23 million annual customers.

“The results, along with a profitability analysis of the industry by internal and external experts, will be used to shape our business model and future strategy, as well as accelerating our web transformation to create a web centre of excellence with channel ownership in each of our market segments,” the group said.

Tui claims to have outperformed the market in January

Tui Travel claims to have “significantly outperformed” the market in the peak January selling period for summer holidays.
Sales volumes are now ahead of the company’s 9% capacity reduction, and is 35% sold to date, described as in line with the previous year.
Capacity has been cut for North Africa and the Eastern Mediterranean, with some of this reduction offset by increased capacity in the Canary Islands.
“Turn of year trading has been ahead of expectations and we are particularly pleased with our online performance,” Tui said.
The average selling price is up 8%, reflecting cost base inflation of approximately 5% and the continued increase in differentiated content.
“We have continued to increase the proportion of holidays sold online with 42% booked online for summer 2012, up six percentage points versus the prior year.”
All inclusive bookings are up by seven percentage points to make up 55% of bookings to date for the first summer that First Choice becomes exclusively all inclusive.
The ‘all in’ holiday concept is proving attractive, particularly in the current economic environment.
“As we continue to expand our differentiated offering, which traditionally books earlier, these products have accounted for 64% of bookings to date, up seven percentage points on the prior year,” Tui said.
UK bookings for this winter have improved since early December, with volumes continuing to move towards a capacity reduction of 9% and there is less left to sell against this time last year.
The booked load factor is currently 71%, described as being broadly in line with last year.
“We are pleased with our price performance, with average selling prices up 5% in light of inflationary cost increases and increased differentiated sales,” Tui said.
“Demand for differentiated products continues to be strong with volumes up 15%. These products now account for 62% of our sales, up 12 percentage points on prior year.
“As anticipated, North Africa remains challenging with volumes down 23%. Across our programme strong demand in the lates booking period has resulted in improved load factors for November, December and January.”

Viking's move sparks cross-market conjecture

By Michelle Baran

When Viking River Cruises placed an order last month for two oceangoing ships for a new brand, Viking Ocean Cruises, it stirred a great deal of talk about the river and ocean cruise markets: how they compare and how they compete.

Former cruise executive Bill Smith, now Virtuoso’s vice president of cruise sales and exclusive product, called Viking’s action a bold move.

“I think it’s a good strategy to capitalize on cross-selling their repeat cruisers onto deep-water ships. There was never that bridge before, between the two,” said Smith, a former senior vice president of sales and marketing at Crystal Cruises.

“I’ve always wondered: What if Crystal did this, or Silversea? They have great past-guest loyalty programs. Would those people cross over? It’s interesting to think about.”

The move marks one of the few times in memory that a river cruise operator has made the jump to deep-water cruising, and it has many in the industry wondering if other river cruise lines might follow.

For Rudi Schreiner, president of Ama Waterways, the answer is no. He said Viking’s Hagen has a “love of blue water and ocean cruising.”

“He was at Royal Viking Line [where he served as CEO] for years,” Schreiner said. “I think that’s one of his dreams. From my side, there’s really not much interest there.”

Bruce Nierenberg, a veteran of both the ocean- and river-cruise industries and now CEO of United Caribbean Lines, agreed.

Hagen, he said, is “one of the few that has had his feet in both places historically. Torstein would probably find [the ocean cruise market] very comfortable. ... I can’t see the other river players having that same comfort level.”

Officials from river cruise companies Avalon Waterways and Uniworld Boutique River Cruise Collection were not available for comment last week.

But other industry insiders said it made sense for both river-cruise and ocean lines to eye each other’s markets for possible entry and look to mergers and acquisitions.

Nierenberg, for example, said, “I wouldn’t be surprised at all if one of the big [ocean cruise lines] decided to buy up one of the successful river ventures.”

He said brands such as Viking or Avalon “would fit very well within any of the empires of Royal Caribbean or Carnival.”

Schreiner, on the other hand, said he wasn’t so sure that river cruising would be a good fit for the deep-water cruise companies. While allowing that crossover marketing opportunities exist, he cautioned that the economies of scale are completely different.

“The ocean cruise lines will stay away from the river cruise product,” he predicted. “The numbers are very different. An ocean cruise line like Royal Caribbean [carries] on one [sailing] as many passengers as we put on one ship in an entire season.

“The logistics are a different environment. For me, it’s a very different business model.”

Nierenberg noted the vast differences in hardware.

“From a technical aspect, running ships around the world is a lot more complicated,” Nierenberg said. “Riverboats are barges with an engine on them that act as hotels. People spend a lot more time on a cruise ship than they do on a riverboat.”

Despite such differences, industry executive Jeff Drew said, “Cruise lines are really looking at river cruises as stiff competition.”

A senior vice president of sales at the Great American Steamboat Co. and a former executive at Oceania Cruises, Seabourn and Cunard Line, Drew said the big cruise lines see the river operators as “taking market share.”

“They’ve done an excellent job, and all the cruise lines are starting to notice,” he said.

As for the timing, Virtuoso’s Smith said that Viking Ocean Cruises’ future competitors, such as Oceania and Seabourn, have added capacity in recent years.

“Does traditional cruising need more 800-passenger ships right now?” Smith asked. “That’s a different subject. But Oceania is very successful, and Seabourn is doing great. We’re seeing demand go up and yields go up. I think maybe the timing is right.”

Nierenberg said his sense was that Viking executives were starting to get “some of the financial results that they like” and consequently had the ability to expand their position in the marketplace.

One of the rare examples of a cruise company that had a hand in both river and ocean markets was Peter Deilmann Cruises, which owned and operated eight river-cruise ships and a 513-passenger oceangoing vessel, the Deutschland.

Peter Deilmann Cruises declared insolvency on its river-cruise business at the end of 2009 and exited the market, but its parent company, Reederei Peter Deilmann, still operates the Deutschland.

EasyJet posts 60% increase in profits

Nov 15, 2011 08:17AM GMT 

EasyJet has delivered a 60% rise in full year pre-tax profits to £248 million and is returning £195 million to shareholders.

The budget carrier, under pressure from founder and major shareholder Sir Stelios Haji-Ioannou over dividend payments, said it was making “tangible returns” to shareholders despite a £100 million hike in fuel costs.

Overall capacity rose by 11.5% due to network expansions from Gatwick and in France and Switzerland. Passenger numbers rose 11.8% to 54.5 million and load factor improved by 0.3 percentage points to 87.3%.

Total revenue grew by 16.1% to £3,452 million resulting in growth of 4.1% in revenue per seat to £55.27. Ancillary revenue rose by 12.9% to £11.52 per seat following “decisive management action” in the second quarter of the year.

Passengers originating outside of the UK now account for 56%, an increase of 3 percentage points compared with 2010.  Those flying on business increased by almost one million to 9.5 million

Underlying cost per seat fell by 1.3% for the full year with strong performances in ground handling, maintenance and disruption-related costs, the carrier said.

Chief executive Carolyn McCall said: “Despite the headwinds of higher fuel costs and a weak and uncertain economic outlook, our focus on customers, robust operational performance, the strength of EasyJet's network combined with cost control and capital discipline means that EasyJet is well placed to succeed.”

The airline took a swipe at government for reversing its election promise to turn Air Passenger Duty in to a per plane tax.

“Instead it is proposing to lower the tax on long-haul flights and increase it on short-haul flights,” EasyJet said. “Evidence shows this is both economically and environmentally damaging.

“Aviation's entry into the European Union Emissions Trading System means that there is no longer any environmental case for taxes on aviation.”

The airline also voiced concern over “monopoly infrastructure” airport and airspace providers across Europe which continue to impose higher charges despite the uncertain economic climate.

“Monopoly airports need to become more efficient, with infrastructure and associated charges built around the needs of passengers on point-to-point carriers such as easyJet. This will bring wider economic benefits by promoting tourism and trade,” EasyJet said.

Looking forward, the carrier said: “The macro-economic environment remains challenging for all airlines as weak consumer confidence across Europe slows the rate at which higher fuel prices and increased taxation can be passed onto passengers.

“Against this backdrop EasyJet is taking a cautious approach to capacity deployment.  As a result, capacity in the first half of the year is planned to be flat (adjusting for disruption in the first part of the prior year), with growth of around 4% for the full year.

“With around 45% of winter seats now sold, in line with the prior year, first half passenger revenue per seat is expected to grow by mid-single digits with planned improvement in yields, bag charges and other ancillary revenues.

“Cost per seat excluding fuel and currency impact is expected to grow by 2% to 3% for the full year and by 4% in the first half of the year, assuming normal levels of disruption, driven by price increases at regulated airports and investments in new revenue streams.

“At current fuel and exchange rates easyJet's fuel bill is anticipated to increase by £220 million in full year 2012 compared to full year 2011.

“Despite the headwinds of higher fuel costs and a weak and uncertain economic outlook, our focus on customers, robust operational performance, the strength of EasyJet's network combined with cost control and capital discipline means that EasyJet is well placed to succeed.”