Thomson and Cook strike 11th-hour deal

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The Independent Online

A serious dispute between two of the best-known names in the travel industry, Thomson and Thomas Cook, has been settled in time for the traditional new year boom in holiday sales.

Thomson, the tour operator, and Thomas Cook, the travel agency, had stopped doing business with each other three weeks ago in a row over commissions and discounts.

Thomson was thought to have demanded that Thomas Cook accept lower commission rates on its holidays of about 10 per cent, but be allowed to offer higher discounts to customers of around 12 per cent.

Thomas Cook said it could not cover its costs under such an arrangement, and the dispute was threatening to spill over into the courts.

Thomson disconnected Thomas Cook from its holiday booking system, while the travel agent removed the tour operator's brochures from its network of 385 shops.

Neither side was yesterday revealing the terms of the settlement. But it is believed that Thomson has agreed to pay higher commissions while Thomas Cook will discount holidays by only 10 per cent.

Brochures for next year's holidays were being rushed to Thomas Cook shops yesterday. The days over Christmas and new year are the busiest of the year for holiday bookings, and no travel company can afford to miss such a lucrative period of business.

The deal, agreed late on Tuesday after both sides' lawyers worked over Christmas, provides enough flexibility for Thomson to offer bigger discounts if the key selling season does not go well.

A Thomas Cook spokeswoman said: "We are now selling Thomson holidays. We have reached an agreement that is mutually acceptable."

At Thomson, which sells one in three of the 10 million overseas package holidays bought in Britain, a spokeswoman confirmed an agreement had been reached but declined to comment further.

The dispute threatened to financially hurt Thomas Cook, which has a 13 per cent share of the overseas holiday tours sold in the UK. At least one in 10 of Thomas Cook's customers books a Thomson holiday.

The industry has been hit hard this year due to its own over-optimistic forecasts about how many people would holiday abroad this summer.

Last week Thomas Cook announced discounts of up to 15 per cent on package tours a day after Lunn Poly revealed a pay-by-instalment plan.