Could Operation Matterhorn be symptomatic of Peak Package Holidays?

CURIOUS, the UK government’s choice of Operation Matterhorn as its codename for the Civil Aviation Authority’s airlift of Thomas Cook customers.

Back in WWII, Operation Matterhorn was a US campaign to target Japanese forces and Japan itself from air bases in China and India. Although logistic problems blunted the effort’s strategic value, its notable missions included the fire bombing of Wuhan in December 1944. That single raid by nearly 100 B-29 Super Fortress bombers left as many civilians dead (40,000) as were killed at Hamburg 18 months earlier during a whole week of attacks by a total of 3,000 allied bombers.

By coincidence, the CAA also used 100 aircraft during the first week of its own Operation Matterhorn. I’m sure the CAA wasn’t thinking of that Matterhorn when it came up with its codename—though maybe someone there should have checked out the term online before plumping for it.

Or perhaps they chose it because the airlift (definitely) and the Matterhorn (legendarily) were both caused by clumsy giants. In the mountain’s case, the giant was called Gargantua. One day, while trying to step over a 4,000 metre tall ridge between Italy and Switzerland, he slipped on ice and crashed to earth. His fall left the Matterhorn the only piece of the ridge still standing, where the gap between his legs had been.

Thomas Cook likewise: “clumsy and slow” and frequently leaving a “swath of destruction and debris” in its wake … oh sorry, that was Gargantua. But you get the picture.

Maybe there’s a plan to name future tourist rescues after mountains, like hurricanes get people’s names.

That could be ominous for holidaymakers and for the Air Travel Trust, which manages the funds set aside to repatriate customers of failed tour operators. The failures are getting bigger—Monarch Airlines in 2017 and now Thomas Cook—and the Matterhorn is only the 12th highest peak in Europe.

These are tough times for big travel firms—because austerity as much as any reason. Cut throat cost-cutting helped cut Thomas Cook’s own throat. Poor service levels won it the title of Britain’s least-favourite big travel company in a Which? survey earlier this year. TUI, the UK number two until TC’s demise, is in better financial shape than its now-dead rival was. But Thomas Cook’s elimination from the market meant TUI assumed its mantle of ‘worst package holiday company’ as well as top slot in the size ranking.

No areas of today’s ultra-high-entropy economies are immune from the effects of rising energy-cost-of-energy (ECoE). Arguably, industries that are both highly energy-intensive and discretionary, like flyaway package holidays, are particularly vulnerable to the persistent slow squeeze on affordability.

Essentially, it’s consolidation without end. The remaining holiday companies will soak up the custom freed up by the departure of TC. But sooner or later they will run up against the same issue of trying to sell an increasingly expensive-to-deliver product to customers with less and less money to spend on it.

TUI has already ramped up its debts by 47% to €2.8bn over the last year. No problem: at present it can cover the interest easily. All debt is a bet though—that growth in the future will allow the borrower to repay the capital and the interest. But if ECoE suffocates overall economic growth then that debt becomes a millstone.

If there’s anything to the theory of catabolic decline, then 2020 and perhaps 2021 will look like ‘normal’ years for the holiday business. After that, who knows? Operation Eiger or Operation Mont Blanc may already be out there in the hills, sharpening its ice axe.

Main Photo: Marc-Alexis Guerraz – Wikimedia Commons

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