This paper investigates the increasing concentration in the UK air inclusive‐tour (AIT) market and the behaviour of the dominant companies (Thomson, Airtours, First Choice and Thomas Cook) operating in the sector. Arguments relating to the theoretical organisational structure of the industry are explored and regulatory investigations that have taken place are discussed. Research evidence as to the competitive position of independent tour operators in the overall UK AIT market is provided. The research indicates that a key area of difficulty for the independent sector relates to the provision of charter airline capacity although access to distribution channels and the ability to contract accommodation are viewed as further concerns. The paper concludes that regulatory authorities are faced with trying to ensure that diversity is maintained while at the same time ensuring any economies of scale derived from consolidation of the sector are passed on to consumers. In order to properly understand the true effects of industrial concentration the assembled package must be dissembled into its component parts and an increasingly a pan‐European perspective is necessary.