Charting the decline of charter Part 2: leading UK non-scheduled airlines adapt business models

Part 1 of this CAPA report examined the declining overall trend for charter traffic in the market for charter traffic in the UK and across Europe. Part 2 considers developments at individual leading charter airlines in the UK.

Specialist charter airlines - led by Thomson Airways and Thomas Cook Airlines - have suffered a fall in passenger numbers, which have been taken by low cost airlines. The decline in UK non-scheduled traffic has been further exacerbated over the past decade by the bankruptcies of a number of leading charter airlines - most notably XL Airways UK in 2008.

Moreover, former charter airlines such as Monarch Airlines have gradually switched their capacity from non-scheduled to scheduled services. Even Thomas Cook Airlines has now adopted this approach, leaving Thomson Airways as the UK's only significant operator of non-scheduled services.

The distinction between charter and scheduled flights is becoming increasingly blurred. It is not necessary to be a charter carrier in order to enjoy vertical integration with a tour operator. Moreover, operating scheduled services increases flexibility over channels and fares. With long haul markets an increasing focus for both Thomas Cook and Thomson, these leisure airlines could become a credible alternative to higher profile long haul low cost airlines.