p14 City May1 29/4/09 13:03 Page 14
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Comment Andrew Monk, former CEO of Blue Oar and Oriel Securities
Big two may have
proved me wrong
Tui Travel and Thomas Cook’s capacity cuts and focus on
profit look set to have broken the cycle of boom and bust –
and, as Andrew Monk admits, confounded his expectations
O
ver the past few years, I have
sounded caution about the two
main tour operators, Thomas Cook
and Tui. I felt they had both done
the “wrong” merger. And then, as the credit
crunch started to grip the economy, I became
very concerned that they would be hit.
The collapse of sterling and rising unemploy-
ment all seemed to point to serious problems.
But maybe I have been wrong. which, of course, hurts our pockets, but there
No one likes to admit to being wrong, but I again as taxpayers, we own them as well so we
am a great believer that if you do get some- should be pleased their health is being restored.
thing wrong you should admit to it – and in
this case I might have to. Sterling stabilising
We do still have the summer to see if their
“If I am proved
The collapse of sterling also seems to slowly
profits remain strong and customers don’t hold be easing and this will help the industry. And
back, but it does look as though the big two
wrong, and it’s
although I wouldn’t like to be a bull of sterling
have cracked the cycle.
looking that way, I
as a currency, I’m not keen on the euro either.
The oil price is likely to rise again towards
Credit worthy
would happily visit
the back end of 2009.
If that is the case, much of the credit should go
their offices and
The combination of some demand coming
to Tui’s Peter Long and Thomas Cook’s Manny back, together with China buying for the huge
Fontenla-Novoa, who will have proved that they
clean their shoes”
oil storage facilities they are expected to
are outstanding managers and fully deserve
Andrew Monk
complete at the end of the year, may see the oil
their places in the FTSE 100. price rise closer to $70.
If I am proved wrong, and it’s looking that We also don’t know if by the end of 2009 we If I am right – and I have to get my shoe
way, I would happily visit their offices and will be recovering, but stock markets are very brush and polish out – it will be good news for
clean their shoes. good forward indicators and although I don’t the industry. With two, large, stable players,
Of course, the current recession has to hit expect a major stock market rally until the end and a cycle of boom and bust changed, the
the industry, as it will all industries, and there of 2009, if we do get one 2010 should be a industry will have a more stable future.
will be losers. The big airlines are suffering, better year for everyone. I’m sure the current government wish they
and one suspects that the small operators are The signs are there, the major one being that could achieve that with our economy.
finding life very tough and some will sadly find the banks are now all making good money
it too tough. again. Their margins have widened considerably ■ APD hike ‘will spark failures’: Letters, p32
14 01.05.2009
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