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TUI/First Choice merger – job cuts yet to be quantified
First Choice chief executive Peter Long has admitted there will be job cuts as a result of the planned merger with German-owned TUI.
Conceding that the issue was a sensitive one, Long said numbers were not quantifiable at this stage.
The two companies have already admitted that the bulk of jobs will go in the UK rather than in Germany as the combined TUI Travel business seeks £100 million a year in cost savings.
Long, who will be CEO of the merged company, said that while “regrettably” there will be job losses, new opportunities will arise as the business grows.
While there was “clearly duplication” of TUI and First Choice’s combined 1,100 travel agencies in the UK, that didn’t necessarily mean shops in the same high street would close, he added.
“Just becasue we have two shops in a high street doesn’t mean we won’t continue with two.”
Long said the aim was to create a “formidable global force” in the travel industry to better tackle the “new competitive forces” provided by low cost carriers and online intermediaries for growing numbers of independent travellers. The market had fundamentally changed and will continue to change, he added.
Long said the organisation had consulted lawyers about competition issues and he did not expect the deal to be hindered by European competition authorities – even though the market has reduced from four major operators to two in a matter of weeks following the Thomas Cook/MyTravel deal.
“The market can no longer be measured by traditional tour operators. The world has changed. It’s now all about what the low cost carriers and online intermediaries do. Four going to two in the subset is not the relevant comparison,” he said.
He said the last thing on the minds of the two organisations was to increase holiday prices.
As well as market leader in Europe, TUI Travel will inherit First Choice operations in North America, First Choice and TUI business in the Asia-Pacific region and TUI’s in China, India and Russia.
*See previous TUI/First Choice merger stories
by Phil Davies
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