Thomas Cook and Co-operative travel agents to merge

| October 8, 2010 | 0 Comments

It has been announced today that high street travel agents, Thomas Cook and the Co-operative Group, are to merge their chain of travel agents.

However, the deal will bring “inevitable“ job losses due to overlap within the two companies.

The transaction will create a 1,200-branch network and will save more than £35 million a year through job losses.

In a statement, the companies said Thomas Cook will own 70% of shares within the new business, and the Co-operative 30%.

Thomas Cook’s chief executive, Manny Fontenla-Novoa, described the deal as “a significant consolidation opportunity in the UK travel market” adding that the deal will “create the country’s largest high street travel network and reach a far wider customer base.”

Meanwhile, Peter Marks, chief executive of the Co-operative, described the deal as “a marriage between two of the industry’s most trusted brands.”

The announcement comes shortly after Thomas Cook announced a profits warning in August, due to the downturn in the travel industry.

The Co-operative Group recently reported that first-half travel sales plunged 6.6%, while profit slumped 70%. At the time, the group attributed the falls to the volcano ash disruption earlier this year and the strikes at British Airways.

Following today’s announcement, shares in Thomas Cook gained more than 5% in morning trading.

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