Job fears as Thomas Cook and Co-op merge travel businesses

Thomas Cook and the Co-op unveiled plans today to merge their high street travel businesses in a move expected to cost hundreds of UK jobs.





With more than 1,200 shops, the newly-formed company will be the UK's largest travel agent and second biggest in foreign exchange.



The tie-up will enable Thomas Cook to streamline costs in the face of a sluggish travel industry and expected period of weak consumer spending.



Savings of around £35 million a year from the merger are expected to be achieved through job losses, store closures and the combination of existing head offices into Thomas Cook's current Peterborough HQ.



It is feared that hundreds of jobs will be lost through the merger.



The Usdaw union said it planned to hold talks with the new company in the coming months in a bid to secure as many jobs as possible.



Staff at Co-operative Travel, which started life as a day excursion business in 1905, are based at the head office in Burslem, Stoke-on-Trent. The company also operates call centres in Manchester and Barrow, in Cumbria.



Peter Marks, chief executive of the Co-operative Group, said it was too early to confirm store closures and the number of job losses among the combined workforce of around 9,000 staff.



He said: "This is really about job creation and protection, but yes of course, by combining the two head offices there will be some job losses."



Mr Marks added: "This is a marriage of two of the industry's most trusted brands - The Co-operative and Thomas Cook. And, it comes at a time when consumer confidence in the travel sector, like the economy, is in need of a boost."



Co-operative Travel, which employs 3,000 staff, will also include its home-working business, which has 345 staff selling holidays from home, its web and call centre operations and Freedom Travel, its franchise group.



Thomas Cook, which will own 70% of the new company, is struggling with a drop in demand for overseas holidays, as anxious Britons opt to stay at home.



Last month, the group confirmed it was reviewing its total UK workforce of between 13,000 and 15,000 staff, as well as its supplier base and all divisions in its UK arm, in a bid to cut costs.



Manny Fontenla-Novoa, Thomas Cook Group chief executive, said: "Today's announcement together with our plans to cut costs and streamline the rest of the UK business, will put us in a much stronger position, should market conditions in the UK remain weak, and will build a firm foundation for the future."



The Thomas Cook businesses within the scope of the merger only made up 3% of the group's £9.3 billion total revenues in the year to September 2009.



As well as its UK high street network, the group, which can be traced back to the mid 19th century, operates in 20 other countries, running holiday tours, cruises and 94 aircraft.



Thomas Cook and Co-operative Travel stores will continue to operate under their own brands, but Thomas Cook's Going Places shops will be rebranded as Co-operative Travel.



The deal is subject to regulatory approval, but the companies hope the tie-up will be completed in early December.



The Midlands Co-operative is also expected to join the deal as well, adding a further 103 stores to the portfolio. The addition, to be confirmed in the next two weeks, would give Midlands Co-operative a 3.5% stake in the new company, to be taken from Thomas Cook's share.



Analysts viewed today's merger as a good move.



Nick Batram, analyst at KBC Peel Hunt, said today's deal will go a long way in improving Thomas Cook's cost base within its UK business.



He said: "In addition to the cost savings other benefits should be derived for the broader tour operations."



Simon French, analyst at Panmure Gordon, said the merger was a "positive development".



Under the merger, the two companies will have a combined 4.3 million customers, and each company will contribute their entire retail estates, comprising 803 and 401 shops respectively, together with foreign exchange and cruise operations.



Mr Fontenla-Novoa will serve as chairman to the new company, and Ian Derbyshire, current chief executive of Thomas Cook UK, will be chief executive.

PROMOTED VIDEO
Life and Style
Sainsbury's could roll the lorries out across its whole fleet if they are successful
tech
Arts and Entertainment
tv
Sport
Ojo Onaolapo celebrates winning the bronze medal
commonwealth games
Arts and Entertainment
Rock band Led Zeppelin in the early 1970s
musicLed Zeppelin to release alternative Stairway To Heaven after 43 years
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmHe was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
Arts and Entertainment
'Old Fashioned' will be a different kind of love story to '50 Shades'
film
Life and Style
fashionHealth concerns and 'pornified' perceptions have made women more conscious at the beach
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
footballA colourful discussion on tactics, the merits of the English footballer and rebuilding Manchester United
Arts and Entertainment
Tracey Emin's 'My Bed' is returning to the Tate more than 15 years after it first caused shockwaves at the gallery
artTracey Emin's bed returns to the Tate after record sale
Arts and Entertainment
Smart mover: Peter Bazalgette
filmHow live cinema screenings can boost arts audiences
Environment
Neil Young performing at Hyde Park, London, earlier this month
environment
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Project Manager (HR)- Bristol - Upto £400 p/day

£350 - £400 per annum + competitive: Orgtel: Project Manager (specializing in ...

Graduate / Trainee Recruitment Consultant - IT

£25000 per annum + OTE £40,000: SThree: Orgtel are seeking Graduate Trainee Re...

HR Business Partner - Banking Finance - Brentwood - £45K

£45000 per annum + Benefits: Ashdown Group: ** HR Business Partner - Senior H...

PA / Team Secretary - Wimbledon

£28000 - £32000 per annum + Benefits: Ashdown Group: PA / Team Secretary - Mat...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz