Thomas Cook off to flyer while Tui struggles

Lloyd Doyle
February 10, 2019

"Thomas Cook doesn't need to own an airline outright to be a successful holiday company", Chief Executive Peter Fankhauser said, adding a review was being conducted and the company would retain strong links to the carrier whatever the outcome.

Tui has shocked investors with a profit downgrade and Thomas Cook has put its airline up for sale, underlining the pressures being felt by travel operators this year. The Company owns, operates and manages travel agencies, tour operators and auto hire agencies, as well as owning their own aircraft fleet, cruise ships and resort properties. "We will provide an update on this process in due course".

That coincides with the company announcing a "strategic review" of the profitable and growing group airline business.

Explaining the decision, the company commented: "Our strategy for the airline has been to profitably grow as a leading European leisure airline with a reliable, customer-focused service". We now operate a fleet of 103 aircraft, of which a quarter serve long-haul destinations. The company has market cap of $15.25 million.

Underlying operating losses widened to £60 million ($78 million, 68 million euros) in its first quarter, or three months to December 31, compared with £46 million a year earlier, Thomas Cook also revealed Thursday.

The latest funds will be used to buy two hotels in Spain, a 250-room hotel in the Canary Islands and a 300-room hotel in the Balearics.

In all, it operates 103 aircraft and posted a 37% rise in operating profit previous year to £129m.

British tour operator Thomas Cook stated in its quarterly report that "is considering all strategic opportunities" in relation to its airline.

Among 9 analysts covering Thomas Cook Group PLC (LON:TCG), 3 have Buy rating, 1 Sell and 5 Hold. The Group Airline continued to perform well, delivering a seasonal underlying loss in line with a strong comparative period past year. However, tour operator bookings dropped 12% as the company reduced capacity across its markets to manage risks throughout the year.

"As expected, the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun". Capacity reductions led to a 4% rise in prices.

Sky reported this morning that CEO of the group, Peter Fankhauser, said that "bookings for summer 2019 reflect consumer uncertainty, particularly in the United Kingdom".

Meanwhile revenue for the period ticked up by just one per cent to £1.66bn at the holidaymaker, whose share price tanked past year following a £30m profit warning in September.

Other reports by Iphone Fresh

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