Thomas Cook and Co-op unveil plans to merge their high street travel businesses

In a move that may create a considerable loss of jobs, UK firms Thomas Cook and the Co-op have outlined their plans for a merger of their high street travel businesses. The two firms announced they are planning a merger of their high street travel businesses forming the biggest travel firm in the UK. With about 1,200 shops under their name, the formed entity will be the UK’s biggest travel business and the second biggest in foreign exchange.

The two firms expect the merger to enable them gain more business, with Thomas Cook expecting the merger to help it streamline costs in the wake of the sluggish travel industry and expected period of weak consumer spending. The merger will subsequently create savings of about A$35 million per annum that will be attained via job cuts, store closures and the combination of current head offices into Thomas Cook’s current headquarters in Peterborough.

The move is expected to result in job losses, but the UK’s Usdaw union said it is planning to hold talks with the merged entity to secure as many jobs as possible. Co-operative Travel, in operation since 1905 is based in Stoke-on-Trent and operates centers in Manchester and Barrow in Cumbria.

Peter Marks, chief executive of the Co-operative Group, reiterated that it was too early to confirm store closures and the number of job losses among the combined workforce of around 9,000 staff. On the contrary though, he added that the merger would rather result in job creation and protection, but noting that there would be job losses as well.  Co-operative Travel 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 will own 70 per cent 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.

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.

11 Oct 2010.