The Thomas Cook and MyTravel merger has been hailed as good news by the industry because it will help address long-standing over-supply in the holiday market.
The combined group carries 19.1 million passengers, including 6.3 million in the UK. Of the group’s fleet of 97 aircraft, 45 are in the UK where its share of the travel market is in the “low teens”.
MyTravel UK managing director John Bloodworth said the group would be sensible on capacity, but added: “We are not going to be a shrinking violet; we will be aggressive with our position. We will have to rationalise the airline, there is no doubt about it.”
Industry figures welcomed the consolidation from four to three major travel companies.
Triton Travel Group director John McEwan said: “There was too much capacity and too many players.”
ABTA board member Noel Josephides agreed: “With three players, there will be better control of capacity. Things will tighten up.”
He believes the deal may herald tougher times for some. “Consolidation will not be good for the dotcoms and dynamic packagers. They depend on overcapacity,” he said.
But Low Cost Travel Group chief executive Paul Evans disagreed. “It means overseas hoteliers have less choice and will give more bedstock to the likes of us,” he said.
Former MyTravel boss Steve Endacott added: “Even if the enlarged group leads to a reduction in capacity and flight-only opportunities, the no-frills carriers will see it as an invitation to move to the leisure routes.”
In private, rivals Thomson and First Choice will relish any period of confusion and possible loss of morale at the two companies.
A City source said: “They will have to carry out the merger in the busiest time of the year. They are two chunky organisations and it will need to be managed properly.”
What the trade said
“This deal does not have a downside. If there had to be consolidation in the industry we’d rather it this way -our number one and two key partners will now be our number one strategic partner.” George Begg, consultant, Triton Travel Group
“We will be interested to see what the approach to agents will be now. Will it follow Thomson or embrace agents? If it looks at shutting shops we may well gain more members.”
Todd Carpenter, director, Travel Trust Association
“MyTravel and Thomas Cook will be inwardly focused for two years; that’s as much an opportunity for First Choice as a threat.”
Paul Evans, chief executive, Low Cost Travel Group
“The power now wielded by Thomson and the Thomas Cook Group is massive. First Choice won’t have the strength of distribution if they don’t want to support it. What will First Choice do?”
Miles Morgan, owner, Miles Morgan Travel
“Consolidation is something we have talked about and predicted for years. It means the mainstream package holiday market can return to reasonable profitability, but it will mean reduced capacity.”
Chris Mottershead, chief executive, Travelzest
“It’s not the strongest of the species that survive, nor the most intelligent, it’s the most responsive to change. Is Thomas Cook changing or just getting bigger? More of the same is not the answer.”
David Speakman, chairman, Travel Counsellors