The predicted cost savings from the proposed £3 billion merger between MyTravel, of Britain, and Thomas Cook, of Germany, have been lifted from £75 million to at least £95 million, increasing the likelihood of big job losses.

The two travel companies, which will adopt the name Thomas Cook Group, did not quantify the extent of the redundancies, although the focus of the cuts is expected to be the combined group’s 19,000 staff in the UK. Analysts believe that at least 2,000 of those jobs could go.

According to the merger prospectus released yesterday, many of the savings will come from combining the enlarged group’s UK and Irish operations, in which there is said to be overlap in retail distribution, airlines, tour operations and central overheads.

The document mentions a “rationalisation of the retail estate”, implying that a big chunk of the combined chain of more than 1,000 UK high street travel agencies could close over time. The Thomas Cook name is expected to take precedence over MyTravel’s Going Places badge when the retail branding strategy is announced.

Similarly, the combined airline fleet, which will also be reduced, will adopt the Thomas Cook name. The German group has 66 aircraft; MyTravel has 31.

The savings will be realised within 24 to 30 months of completion at a one-off cost of about £125 million.

The prospectus reiterates that the merger is conditional, on, among other things, clearance by the European Commission. The Commission is due to announce this week whether the merger should be cleared or referred to a more detailed Phase II investigation.

Analysts expect the deal to be referred, then cleared at the end of the Phase II inquiry. The situation has been complicated by the subsequent announcement of a merger between First Choice Holidays and TUI, the German owner of Thomson Holidays. Although the two deals would reduce Europe’s top four tour operators to two, it is understood that the Commission is considering the two deals independently of each other.

The prospectus reveals that Peter McHugh, the MyTravel chief executive, will pocket a total of about £5.1 million after the deal is completed. This includes a £1 million retention bonus, a £1 million synergies bonus, £2.9 million from share options and £600,000 from selling shares he already owns.

Mr McHugh, who is credited with turning the company’s fortunes around, has agreed to leave by the end of the year. Manny Fontenla-Novoa, his counterpart at Thomas Cook, will assume the same role in the enlarged group.

Shares of MyTravel gained 13½p, or 4.5 per cent, to 313¾p.

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