UK tipped for Tui Group airlines' new base

UK tipped for Tui Group airlines' new base

UK-based Thomson Airways is being tipped as the base for parent company Tui Group’s combined airline operations as part of a cost-saving shake-up.

Administration and some maintenance activities would be shifted from Germany as Tui plans to better co-ordinate its fragmented airline operations, including TUIfly, Jetairfly and Thomson Airways, in the light of competition from low cost rivals such as EasyJet, Ryanair, Norwegian and Vueling, Reuters reported.

Restructuring of the travel giant’s airline operations are likely to lead to hundreds of job losses in Hanover, three sources familiar with the matter told the news agency.

The efforts to save more than €100 million would mean around 400-500 jobs out of more than 2,000 could be lost at TUIfly's base in Hanover. But such a measure could trigger strikes or legal action from unions.

"It makes sense to draw synergies from combining activities such as fuel purchasing, aircraft leasing and administration of TUIfly Germany,

Thomson Airways, TUIfly Nordic, Jetairfly and Arkefly," one of the sources said. "But why use the platform with the highest cost base?" Another said the figure of €100 million in synergies was too high and unlikely to be achieved.

A third person said the UK was chosen as the hub for the airline deal as compensation for Tui Travel losing some activities to Tui Group's Hanover headquarters as part of the merger of Tui AG and Tui Travel.

A decision is expected by Easter, the source added.

A Tui spokesman said it was looking at various business models to strengthen the airline operations under the leadership of CEO Henrik Homann, but that no decision had yet been taken and could be some time off.

Tui's French carrier Corsair is not included in the plans to bundle the airlines together. Instead, Tui is in discussions with parties interested in buying the airline, although nothing has been decided, the spokesman said.

Tui Group, the world's largest leisure and tourism company was formed from the merger of London-listed Tui Travel and German-based majority owner Tui AG last year.


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