The Co-operative Travel Group is to launch a tour operator this summer in an exclusive joint venture with Cosmos Holidays.

Co-operative Holidays will launch in early summer with its first programme of holidays for summer 2010. The Co-operative Travel Group and Cosmos Holidays will set up a joint management board to run the operation independently.

Cosmos Holidays and Monarch Travel Group chief executive Peter Brown said capacity reductions in the market by TUI Travel and Thomas Cook left a gap in the market for the new operation, but denied it would sell “huge volumes at giveaway prices”.

The Co-operative Travel Group managing director Mike Greenacre said part of the reason for the new tour operator was to help protect the group’s earnings in the current climate.

He said: “The market has evolved somewhat in recent  months and our objective of protecting access to stock and earnings is more pertinent than ever.”

He said the group was focused on differentiating the tour operator and ensuring it fits with The Co-operative brand’s values.

He added: “What we are about to embark upon is much more driven by the relaunch of The Co-operative brand and the values that our customers, staff and members put upon it.

“This is what has taken the time: firstly to be very clear about how we can differentiate a new brand in the tour operating arena and, secondly, to be certain that in putting our brand into tour operating and the holiday marketplace we will meet the exacting standards required by the Co-operative brand.”

The group decided Cosmos was the right partner based on the fact it has no retail distribution of its own, a 40 year history of tour operating and a sister airline Monarch.

Brown added: “The significant reduction in capacity during the past 18 months does, in our view, leave a sensible gap in the market, although Mike and I are keen to ensure that supply and demand remain in good balance within the industry. This is not about selling huge volumes at giveaway prices.

“The operation has to be differentiated for our customers, offer exceptional value for money and recognise the growing demand for sustainable tourism.”

The Co-operative Travel Group’s parent company The co-operative has also announced it is spending £70 million on promoting its ethical approach to business, with the launch of a high-profile advertising campaign.

The campaign kicks off its campaign with TV advertising during Coronation Street tonight. The ads will also be shown in cinemas and in national newspapers.