[Updates at the bottom of the post]
All hell is breaking loose this morning as the rather predictable merger between TUI and First Choice is absorbed by the travel and mainstream business media.
The deal will see the pair, to be known as TUI Travel, eventually listed on the London Stock Exchange and responsible for around 27 million customers a year.
Here are the numbers:
- Pre-tax cost savings of £100 million a year
- Yearly proforma revenues of £12.1 billion
- 51% owned by TUI; 49% by First Choice
- A total of 200 holiday brands [yes, that's two-zero-zero]
So now we have the Big Two.
What immediately springs to mind is that the consolidation so widely expected across the industry is still coming from within what people still call "the traditional end" of the market.
But is the current trend for creating large travel companies simply by combining the resources and brand power of existing travel players the best strategy - or even the only strategy?
We would suggest that the recent developments actually gives people a glimpse at what might be happening at a global level.
Or, more conspiratorially, the two recent deals are an attempt to ward off potential suitors from across the Atlantic Ocean.
In fact, when looking at which companies are left amongst the clutch of so-called large travel providers, it seems rather odd that a crossover hasn't happened already.
Clearly some business between one of the large US players - Expedia, or one of the Sabre or Travelport-owned companies, such as Travelocity or Orbitz - and a traditional European travel company would create a rather tantalising travel mega-brand.
The formation of a company which incorporates the servicing power of an established supplier/multiple with the online expertise and brand power of an US travel provider would undoubtedly be a very exciting prospect.
So why hasn't it happened?
The large European travel providers would argue that their recent efforts - Thomon/TUI in particular - to beef up their online presence has meant it can compete happily with the growing US ownership of the travel industry. They would clearly not want to a merger...
This is perhaps so - traditional players still want/need to protect their interests. So attention has to turnto the travel conglomerates dominating the US market.
With piles of private equity money sweeping through the industry in the US it seems inconceivable that interest has yet to turn to the European tour operator market.
While we are not suggesting that the recent deals have been created simply because of a need to protect themselves against a US invasion [admittedly a rather unfortunate turn of phrase] - it is worth bearing in mind.
It must surely only be a matter of time before the US moneymen run out of potential small-to-medium sized online travel companies to buy and look elsewhere, perhaps at the unique European tour operator market.
UPDATE: Peter Long, the chief executive-in-waiting of TUI Travel, is reported to have told a press conference this morning:
"Expedia, Travelport and Travelocity are the new competition. The more business we can get online, the more we can drive down our cost of acquisition."Kevin May, editor, Travolution