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Cobalt collapse prompts airline insurance advice
Juliet Dennis and Ben Ireland
Agents are being urged to have airline failure insurance in place as fears rise that more airlines will collapse following Cobalt Air’s demise.
The Cypriot airline, which
operated 20 ex-UK flights a week, failed last Wednesday, less than three weeks after Primera Air’s collapse. Alan Bowen, legal adviser to the Association of Atol Companies, fired the warning shot about failure insurance in the wake of the failures. “Agents should have scheduled
airline failure insurance if they are booking flight-only direct with airlines, or warn customers to take out insurance,” he said. “There is no protection unless the agent takes out failure insurance.” Bowen believes there could be
more airline failures this winter, as holidaymakers delay booking until after Brexit on March 29 next year. “Agents need to be aware of the potential for failures in a difficult
market,” he added. “There is a concern, but I’m not saying panic.” Only this summer, Cobalt
Air temporarily raised agency commission from 1% to 3% to encourage GDS bookings. A number of agents were caught
up in Cobalt Air’s failure, including Swords Travel, whose managing director Mark Swords was due to fly with the carrier from Athens to Larnaca. He rebooked on Cyprus Airways at a cost of £800 to join a fam trip in Cyprus. “It makes me realise how
valuable we are, as agents,” he said. “It’s a stressful process and I wouldn’t want any customer to have to deal with this stress on holiday.” Roy Collett, managing director
of Colletts Travel, which was unaffected by Cobalt’s collapse, said: “We don’t like to book airlines we are not familiar with. We advise clients to book by credit card.” Olympic Holidays rebooked
clients due to travel back to the UK on Cobalt on alternative carriers. Refunds and free amendments on
future bookings are being offered. › Cobalt Air fallout, back page
Ben Ireland
ben.ireland@
travelweekly.co.uk
Agents have berated Thomas Cook for a pricing trial that has called into question its commitment to price parity.
They say Cook is offering some
hotels cheaper online, meaning they cannot match the operator on price and are forced to discount and sacrifice commission. Shelly Taylor, owner of Taylor
Travel in Prestatyn, north Wales, said a Cook holiday for a family of four to the Dominican Republic was £6,233 on her agent portal, but £5,885 if booked direct online. “The customer didn’t feel
comfortable booking online, but had seen the price, so I had to discount,” she said. “I lost £380 in commission.” Taylor said Cook’s pricing policy
Cobalt Air operated 20 flights a week from the UK
was unclear. “I had one where it was £400 cheaper online in June, but the same price online and on my system in October. “Some 30%-40% of hotels are cheaper online, but it feels random. I don’t understand why they’re treating independents like this when they’re shutting shops. It’s alienating a national sales force.
3 STORIES HOT
A Dominican Republic holiday was £348 cheaper on Cook’s website than on an agent’s portal
Agents criticise Cook pricing trial
“Why is Cook treating independents like this? It’s alienating a national sales force”
So many [other independents] won’t advertise them or rack their brochures. I’ve not gone that far, but I understand why people have.” Phil Gardner, Thomas Cook sales
and e-commerce director, said: “We are trialling different price models across our channels for selected destinations, as part of a review of our omni-channel approach.” Other independents said quotes
for Egypt and Mexico were cheaper online than via trade channels. Bailey’s Travel owner Chris
Bailey urged fellow independents to “sell something else”. He said: “I can see why they’ve done it. They are committed to bedstock and have flights to fill. It’s short-term expediency but could be the start of a downward spiral.” Bailey said his Cook sales had
dropped in the past 18 months, while sales of Jet2holidays had risen, despite the latter not offering price parity. “It’s about transparency,” he said.
25 October 2018
travelweekly.co.uk 5
PICTURE: SHUTTERSTOCK
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