MyTravel’s confirmation that it has approached First Choice to buy its mainstream holiday business has raised the prospect of large-scale job losses on the high street.
The pair issued brief statements, with MyTravel saying it wished to purchase the “mainstream business and certain related operations” – comprising the core package business, 300 retail outlets, aircraft fleet and First Choice website.
MyTravel has 500 shops and, having closed 120 last year, would be expected to make wholesale closures in the event of a deal.
Industry consultant Alan Bowen said: “MyTravel would not want that number of outlets or two airlines.”
Consolidation among the big four groups is widely expected, amid growing pressure to cut capacity. However, doubts about the likelihood of the MyTravel bid succeeding were matched by suspicion about the reason for the leak to the media that broke the story.
Both companies are due to release annual results in the next two weeks, with First Choice in by far the stronger financial position.
“MyTravel is looking at First Choice because it needs bigger [sales] volumes,” said one source.
Others suggest First Choice is far more likely to make an acquisition than sell its core package business, and a deal with Thomas Cook would make a far better fit.
First Choice’s mainstream division accounted for just under half its profits last year, and analysts suggested it should fetch £500 million.
Divisional managing director Dermot Blastland confirmed the company was looking to restructure, but said: “We are considering a range of options and are at a preliminary stage with a number of parties.”