TUI, First Choice to Merge; Cruise Lines Affected

March 22, 2007
In yet another sign of cruise industry consolidation, German travel conglomerate TUI AG and its British counterpart First Choice plc -- tour companies also involved in the operation of Europe-based cruise lines -- have announced a merger. Specifically, TUI would merge most of its tourism operations with First Choice, creating a new U.K.-based company, TUI Travel plc.

Where this is interesting for Cruise Critic members whether in North America or abroad is that both TUI and First Choice own several cruise lines, either wholly or as part of joint ventures. While all of First Choice's cruise lines will be part of the merger, only some of TUI's brands will be. See below for how this deal will affect your favorite line.

The general impact of the merger on the cruise industry is still unclear. In particular, TUI's Thomson Cruises and First Choice's joint venture Island Cruises (with partner Royal Caribbean) compete in the same segment of the British market and both will be part of the merged company. Will they remain independent or merge? What will happen to Royal Caribbean’s interest? (TUI has its own joint venture with Royal Caribbean's arch-rival Carnival.) Only time will tell.

Here is a summary of the cruise lines owned by TUI and First Choice, and how the merger will affect them:

Hapag-Lloyd, Germany's premier luxury cruise line, is a subsidiary of TUI AG, but will not be part of the merger. The merger should have no effect on it.

TUI also owns a stake in the newly-created TUI Cruises, a joint venture with Carnival that includes Germany's most popular cruise line, AIDA, along with a new mid-market TUI Cruises brand that's yet to be developed. Like Hapag-Lloyd, TUI Cruises will remain separate from the new TUI Travel, and the merger shouldn't affect its future.

In contrast to TUI’s German brands, Thomson Cruises, a unit of TUI’s British tour operator subsidiary Thomson, will be part of the merger.

First Choice
Island Cruises, First Choice’s British joint venture with Royal Caribbean, will become part of the new merged TUI Travel plc. For now, it will be remain as it is. What will happen in the future remains to be seen, especially since it competes with the much larger Thomson brand that will soon be under the same corporate umbrella.

First Choice's small-ship and expedition division, The Adventure Fleet, encompassing the ships formerly of INTRAV/Clipper Cruise Line (Clipper Adventurer and Clipper Odyssey) and Peregrine Adventures (Akademik Sergey Vavilov and Akademik Ioffe), will also be included in the merger. Because TUI’s only similar ships fall under Hapag-Lloyd, which won't be part of the merger, it will probably not have much effect on The Adventure Fleet.

--by Doug Newman, Cruise Critic Contributor