Cost-saving is the motivating force behind the merger announced yesterday between the tour operating businesses of two of the travel trade’s most prestigious brands – British Airways and Thomas Cook.

The two brands will retain their separate identities and continue to operate via Thomas Cook's retail network and BA's Travel Shops. The new company, as yet unnamed, is expected to command around 16% of the UK vacation market. The deal – a 50/50 joint venture – comes just days after the acquisition of Thomas Cook by German travel giant C&N Touristic.

According to Thomas Cook chief executive John Donaldson: “With independent scheduled travel being one of the fastest growing sectors in the industry, we have been looking for expansion opportunities. British Airways is the best possible partner for us."

Dale Moss, director of sales at BA, claimed the joint operation would result in cheaper holiday packages and greater consumer choice with improved efficiencies in distribution and buying hotel rooms and flights. “This is a marriage of two of the quality brand names in travel," he declaimed.

Subject to regulatory approval by the European Commission, the newcomer is expected to be operational in the first half of 2001. It is not known whether the merger will lead to a review of the brands’ current advertising arrangements.

News source: BBC Online Business News (UK)