A senior industry figure has questioned the logic of merging Thomas Cook and the The Co-operative Travel, describing it as “hugely distracting”.
In an exclusive interview with Travel Weekly, former Tui Travel UK managing director Dermot Blastland – who presided over Thomson’s merger with First Choice in 2007 – said: “I don’t understand the tie-up. Thomas Cook already has a huge share of the Co-op business and a merger is hugely distracting for staff and management.
“Cook has a great name and a great retail business. Why would it need the Co-op? It already has a bigger network of shops than Thomson relative to the size of its holiday business.”
The proposed merger, which awaits a Competition Commission ruling, would bring The Co-operative Travel and Midland Co-operative under Thomas Cook control and create a chain of 1,240 shops.
Blastland stood down from Tui Travel UK, which has 850 shops, days before the deal was announced last October. He told Travel Weekly: “I see the logic of cost-cutting. But The Co-operative Travel is struggling. Thomas Cook would have to keep cutting costs just to stand still.
“Does Cook need [the merger] to protect its distribution? I can’t understand it from that point of view. It will be merging in a tough climate.”
He said: “You have to be careful when doing a deal. There is a danger of being carried away with the deal itself. There is a propensity to make the figures work and getting the deal represents success rather than getting a successful deal.”
Blastland added: “Cook’s roots are in retail, and that is where it is comfortable, and it has a great consumer name. But it has not got the dedicated product and exclusivity.”
However, he said previous mergers had ensured the sector was in a better state than it would have been. “We have two strong holiday companies. If there were four, we would all be weaker given the last two years.”
The Competition Commission ruling is due in August.
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