With passenger numbers rising and travellers increasingly booking online, the outlook is bright, writes Sally White

What a wonderful start to the summer season. Just about all the online travel numbers are going up! Consumer associations may not be too happy, but no one else is complaining! Rumours of yet more consolidation in the travel industry, on (and off) line, is deterring neither travellers, investors, nor the industry’s players – the latest being the IAG takeover of Aer Lingus.  Brokers, industry associations and the companies themselves are all happily singing from the same hymn sheet.

Online travel bookings may, according to New York broker Guggenheim, be entering ‘middle innings’ on expansion. But for the industry it still has a growth number of 10% for each of the next couple of years and for the leaders one of 20%. 

Passenger spending forecasts for the online travel industry from another broker, Cantor Fitzgerald, are equally reassuring – growth down a little this year at 5% against 6% in 2014, but then 6% again for 2016.

The airlines’ association, IATA, says that its latest figures, for March, show global passenger traffic up 7.4% year-on-year against a rise of 6.4% in February. IATA has projected global profits for the industry to increase to $25 bn in 2015 from the 2014 equivalent of $19.9 bn.

it is going to be ‘the busiest summer of all-times’

Most exuberant of all, the Airlines for America (A4A), the trade organisation for the leading US airlines, forecasts that it is going to be ‘the busiest summer of all-times’ for their members. The US number projected for the summer months is 222m passengers.The companies are already enjoying the low oil prices that have helped most post healthy quarterly financial numbers. Industry growth projections are further icing on the cake as far as the industry’s stock market analysts are concerned.

The A4A’s optimism mainly reflects record-high international travel predictions.  A4A believes that approximately 31 million passengers will fly abroad on US airlines during the period, again an all-time record. The top five international destinations appear to be Canada, Mexico, the United Kingdom, Germany and Japan. To meet the surge in travel demand, US carriers are increasing the number of available seats by 126,000 per day (4.6%).

On the other side of the Atlantic there has also been plenty of cheer as two majors reported first half figures - TUI Group and Thomas Cook.

 TUI Group narrowed half-year lossesto €272.6m (£195.5m) in the six months to the end of March, from €341.m 4 m (£244.8 m) a year ago, in its traditionally weaker winter period. It said winter sales were 1% up compared to a year ago, with strong holidaymaker bookings in the UK, Germany and the Benelux countries. Average selling prices were also 1% up over the same period.

Chief Executives of TUI Group, Friedrich Joussen and Peter Long, commented that: “The online channel accounts for 36% of bookings, which equates to a booking increase of 11% on the prior year.”  In the UK online sales accounted for 50% of summer bookings, up three percentage points on prior year, in Germany online bookings  increased by 27% over the period and in the Nordic countries 71% of customers booked online, the same as last year.

Thomas Cook’s first half showed revenue up by £37 million, or 1.2%, to £2,742m (H1 2014: £2,705m) as a result of growing new product and long haul sales. The gross margin was maintained at 21.3% “as improved yield management and cost efficiencies compensated for continued competitive pressures”, said CEO Peter Fankhauser.  Summer 2015 bookings were “encouraging - 62% sold for the Group as whole, 2% higher than this time last year”.

And his progress report on the all-important digital element of the business that was built so energetically by his predecessor?  All seems to be going well.

“Our new international web platform, OneWeb, is generating a significant uplift in online bookings in the UK. On thomascook.com, our main UK site, package bookings grew by 12% in the first half, while conversion increased by 20%, reflecting improved site efficiency. Our OneWeb platform has recently gone live in The Netherlands and is expected to deliver increased bookings over the coming months. Belgium will follow later this year,” he said.

In addition, “..bookings of Thomas Cook holidays on mobile and tablet devices in the UK grew by 65% in the first half. We have also launched our digital ‘companion app’, initially in Northern Europe at the end of last year...”

TUI and Thomas Cook share prices have been rising this year, too!