European Commission approval of a TUI/First Choice merger has prompted speculation shop closures will be less widespread than for rival Thomas Cook/MyTravel.
This week the EC approved a merger to create TUI Travel, subject to the sale of TUI’s Budget brand in Ireland. The merger is due to get UK Listing Authority approval on June 29.
Details of any official staff consultation on jobs have not been announced, although industry observers suggest Thomson’s Luton headquarters have been earmarked as the merged company’s base.
But observers say the new group could result in fewer shop closures than for MyTravel/Thomas Cook because there is less of an overlap in locations. MyTravel and Thomas Cook both have networks with mainly high-street branches.
“There is less straightforward overlap of shops (for TUI/First Choice),” said one observer.
Miles Morgan Travel owner Miles Morgan, a former Thomson sales and marketing director, said Thomson shops were in high-street locations whereas First Choice’s younger network has more out-of-town shops and supermarket implants.
“It’s simple economics,” he said. “If you have two in one town and they both make money it doesn’t matter.”
One observer suggested call centres could be cut, commenting: “Branding would be an issue but it’s an excuse to get rid of shops, and I think we’ll see more call centre cutbacks.”
First Choice and TUI bosses welcomed news of the approval for the merger, which will create a group with sales of £21.1 billion and generate an anticipated £100 million worth of savings within three years.
TUI Travel could be listed by October 1.
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