The Jetset Travelworld-Stella Travel Services merger is the greatest advertisement ever for the online travel industry. Think about it. The new Jetset-Stella entity is full of financial risk. It will comprise hundreds of retail outlets, dozens of brands, and more than 3000 people. Its margins are absurdly skinny. Jetset, for example, reported a 68% drop in gross profit to $7.3m for the six months to Dec 31 on turnover of more than $1bn. No idea what Stella did because privately owned, though lots of stories about huge debt. Management reckons new company will have market value of $440m. Now look at an online travel company, market capitalisation $1.2bn. Employs several hundred people, made a profit after tax of $27.6m (increase of 34%) on turnover of $562m at the same time Jetset going down the tubes. Which company? That’s not a question.

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