Thomas Cook departure shifts UK-Caribbean aviation dynamics

Thomas Cook's 23-Sep-2019 entry into liquidation reduces to three (all based in the UK) the number of competitors operating scheduled airline services between the UK and the Caribbean.

A duopoly between British Airways and Virgin Atlantic until the airline subsidiaries of Europe's two biggest tour operator groups entered the scheduled market (Thomas Cook Airlines in 2013 and TUI Airways in 2014), UK-Caribbean then settled into a stable four way oligopoly.

Thomas Cook and TUI's entry stimulated growth for a couple of years, but overall seat numbers have grown at a compound average rate of only 1.7% pa since 2015. Among the 24 routes operating in the winter high season week of 10-Feb-2020, there is competition only on the six biggest routes. Even on these competitive routes, there have been few significant capacity or frequency changes in recent years.

The Caribbean is the UK's biggest market by seats in Latin America, but its stable capacity compares with much faster growth to other markets in the region.

Thomas Cook was the smallest operator by capacity, with only around one eighth of annual seats. Its exit provides an opportunity for others to enter, but may just prompt the incumbents to close ranks around the space it leaves.