Job loss fears as UK holiday firms merge

Staff at hundreds of travel agents could lose their jobs following the creation of a massive £12bn (€17.6bn) UK holiday company.

Tui Travel was created yesterday out of the merger of Sussex-based tour operator First Choice and the tourism arm of German company Tui, which includes Thomson Holidays.

Both Luton-based Thomson, the biggest UK holiday company, and First Choice run hundreds of travel shops whose staff could now be under threat as the new company aims for £100m (€146m) a year savings.

The merger also brought fears that less choice could be provided for consumers.

First Choice chief executive Peter Long, who will take the same job at the new company, said the impact on employees was not yet known, but that it hoped to offer alternatives to staff affected.

Yesterday’s announcement is some consolation for First Choice, which saw its hopes of a deal with rivals MyTravel and Thomas Cook ended when those two companies announced a merger last month.

Gerry Doherty, general secretary of transport union TSSA, expressed serious concerns about the merger.

He said: “There is no question that this will mean less choice for travellers and fewer jobs for our members. This will mean shops closing on the high street because Thomson and First Choice will not compete in the same towns like they do now.

“It is now time for the Competition Commission to look at the travel industry, which is changing fast with the growth of the internet. After last month’s merger between Thomas Cook and MyTravel, we are left with just two giant firms dominating the whole of the British market.”

The new company, which will have its headquarters in the UK, has been created at a time when the continuing increase in internet bookings and the huge popularity of low-cost carriers has revolutionised the way people book – and take – holidays.

The new company, which will be listed on the London Stock Exchange, is committed to building up internet sales as well as cutting costs and streamlining its retail shop operation.

It will have annual revenues of more than £12bn (€17.6bn) and will serve 27 million customers.

First Choice’s shares rose more than 8% on news of the deal to close at 308p yesterday.

Thomson has been the biggest UK tour operator since 1974. Its holiday airline - formerly Britannia Airways – is now Coventry-based Thomsonfly.

Formerly called Owners Abroad, First Choice has its headquarters at Crawley in West Sussex. Its airline was formerly called Air 2000 and is now First Choice Airways.

Thomson holiday brands include Simply Travel, Headwater Holidays, Crystal Holidays, Thomson Ski and Snowboarding, Thomson Lakes and Mountains, and Jetsave.

First Choice’s brands include Sovereign, which has had a number of owners over the package holiday era and is one of the best-known names in the travel business.

First Choice’s sister companies include long-haul specialist Hayes & Jarvis. It is thought that all the Thomson and First Choice brands will remain.