TUI has been warned by the European Commission to dissociate from its Irish tour operating arm Budget Travel in order for its proposed merger with First Choice to go ahead. The new travel firm, expected to have sales of around £12.1 billion, is set to commence operations in October following approval from the EC.
Question marks surrounding TUI’s Budget Travel in Ireland originate from concerns over a market monopoly seeing as First Choice already own of Falcon in Ireland.
First Choice Chief Executive Peter Long said: “We are pleased that the commission has recognised the sea-change in the leisure industry brought about by internet-based travel and tourism businesses and the low cost airlines.”
TUI AG CEO Dr Michael Frenzel said the commission’s announcement “sees us take the first step on the path to creating a world leading leisure travel group. With the merger we are expanding our leading position of Europe and are gaining more ground in the specialist tourism growth sector. The merger creates the world’s biggest tourism platform.”
The move sees the once ‘big 4’ dissolve into a ‘big 2’ after Thomas Cook and MyTravel have also received the green light to merge. However, the prospective mergers have drawn criticism from Richard Bodin, Managing Director of Jet2holidays.
Bodin claims the mergers between First Choice holidays and TUI owned Thomson holidays and MyTravel and Thomas Cook holidays were the “worst possible news for British customers”. A sharp warning from Bodin claimed the mergers will ensure customers can expect far less choice, lack of flexibility and a period of rising prices. Bodin added: “Today’s consumer wants flights from their local airport, departure dates to suit their needs and flexible holiday duration. This merger reflects exactly the opposite…this will lead to holidaymakers being offered far less choice and far less flexibility.”
