Anyone who says the Thomas Cook/Co-operative Travel merger is rubbish does not understand the numbers, according to Manny Fontenla-Novoa.
Speaking exclusively to Travel Weekly, the Thomas Cook group chief executive said synergies from the merger would add £14 million to The Co-operative’s annual profit and £32 million to Cook’s.
“This is highly synergistic for a joint venture and we are very confident in these numbers.”
Responding to accusations that both businesses had struck the deal because they were not performing as well as they would like alone, Fontenla-Novoa said: “We’d like to be a Ftse top-10 company and we’re not even in the Ftse 100.”
“But at the beginning of the financial year, which was 12 months ago, analysts were expecting us to make a £420 million operating.
“We haven’t published our numbers yet, but it will be £390-something million, which, after the worst year we’ve ever had, is not a bad performance at all.
“To be in this position after volcanic ash and all those things we’ve faced, just goes to show how robust we are and how robust the industry is – especially if you compare us to the airlines.”
Fontenla-Novoa said anyone who criticised Cook’s drive for further consolidation in the travel industry should “move with the times”.
“People have to keep up with the times and not be dinosaurs. This is a deal we have been exploring for a little while, even before the ash cloud, but for the industry to go through the year it’s gone through and to not take stock, would be madness,” he added.
“Anyone who says consolidation is bad for the industry needs to think about a few years ago. If we hadn’t consolidated from the big four to the big two before the banking crisis, things would be very different.”
‘Common sense’
Fontenla-Novoa said the deal “underlines Cook’s DNA in retailing and makes common sense for the high street”.
“Overnight, Cooks has gone from 750 stores to 1,200. We’ll have 1,300 when Midlands Co-op come on board and another 148 through the Freedom Travel Group,” he said.
He insisted there would be limited overlap between the brands since they “operate in different segments of the market”.
And he emphasised again that shop closures would be minimal, pledging: “We certainly won’t start with three figures.
“Fifty per cent of what the Thomas Cook tour operation now sells is four and five-star, most of it all-inclusive. There’s been a massive shift of the brand to that type of holiday and we are trying to reposition the retailer like that as well.
“The Co-operative’s heartland is three and four-star and they have a good brand proposition.”
Asked if Cook had its sights set on any further mergers or acquisitions, Fontenla-Novoa said: “We think we are pretty well-covered now, especially if you look at where our aircraft are based.”