MyTravel's agreement to merge with Thomas
Cook will close the book on the MyTravel brand and its predecessor,
Airtours, which at one time was considered the largest
packaged-travel company in the world.
If the deal, in
which MyTravel will be acquired by Thomas Cook's parent company,
KarstadtQuelle, is approved by MyTravel shareholders and European
Union antitrust authorities, the combined entity will be called
Thomas Cook Group and will be headquartered in the U.K. with
operations throughout Europe and Canada. The MyTravel name will
disappear.
The combination
will create what Thomas Cook claims to be the U.K.'s largest tour
operator, displacing Thomson, which is part of German conglomerate
TUI.
The merger reduces
the number of mega tour operators in the U.K. from four to three, a
consolidation that is occurring as the sector has lost market share
and is reeling under the assault of Internet bookings and low-cost
carriers.
First Choice,
considered to be the fourth-largest, has made a large incursion
into the U.S. market and is concentrating on long-haul experiential
travel, a far cry from its packaged holiday roots.
MyTravel is
considered the third-largest U.K. tour operator, with sales of $5.5
billion in 2006 and 12,947 employees. Thomas Cook is considered the
second-largest with $10.2 billion in sales and 19,775 employees,
according to its 2005-2006 annual report.
Airtours dates to
1971 when David Crossland purchased Pendle Travel, a travel agency,
from a retiring couple. Crossland had dropped out of school in the
early 1960s at age 16 and took what he said was the only job he
could get: stamping brochures in a travel agency. But he quickly
proved to be a travel industry wunderkind.
Through the 1970s,
Crossland bought up agencies, and in 1986 he sold 25 of them and
founded Airtours, a vacation packager, which he expanded into a
vertically integrated giant that owned travel agencies, hotels,
aircraft and cruise ships.
In 1995, Airtours
began expanding into the North American market, purchasing Sunquest
Holidays and Alba Tours and forming North American Leisure Group.
In 1997, it acquired SunTrips. It bought Vacation Express in
1998.
It made an even
larger foray into the U.S. in 2000 when it acquired Travel Services
International, a roll-up of several wholesale and retail travel
companies and one of the industry's largest cruise retailers.
Airtours adopted the name MyTravel, a trade name of Travel Services
International, the following year.
In the fiscal year
ended Sept. 30, 2001, MyTravel reported record profits of $207.1
million, a jump of 57% over the previous year. But after 9/11, the
company laid off 1,600 employees, and a downward slide began. In
2002 an accounting scandal rocked MyTravel, and its stock
plummeted. In an effort to stop the slide, the company began
shedding assets.
In spite of efforts
by Peter McHugh, who was brought onboard as CEO to stop the
hemorrhaging, reversing the giant corporation's free fall proved to
be a tall order. In September, MyTravel announced its first
profitable year since 2001.
MyTravel
shareholders will hold 48% of the new company, with KarstadtQuelle
holding 52%. The new board of directors will be drawn from MyTravel
as well as Thomas Cook and KarstadtQuelle.
To
contact reporter David Cogswell, send e-mail to [email protected].