Thomas Cook records operating losses of 68.2 million in its first quarter, up 30.4%

Highlights the strong demand for Turkey, Egypt and Tunisia as an alternative to high hotel prices in the Canary Islands

Thomas Cook recorded an operating loss of 60 million pounds sterling (68.2 million euros) in its first fiscal quarter, ended on December 31, which represents an increase of 14 million pounds sterling (15.9 million euros) ) with respect to the same period of the previous year, 30.4% more.

The total turnover of the group increased by 1% in its first fiscal quarter, to 1,656 million pounds sterling (1,881 million euros), compared to the same period of the previous year.

This slight increase was determined by the strong demand from Turkey and North Africa, which was compensated by weaker levels towards destinations such as Spain, explained the British tour operator.

According to the company, the seasonal loss in the traditionally weakest quarter was led by the group’s tour operator due to its lower performance in the United Kingdom and northern Europe.

Thomas Cook explained that their margins were lower, which also contributed to the strong competition from the United Kingdom and market conditions with the ‘Brexit’ fund, the end of the summer season and a lower demand for winter holidays in the Nordic countries.

The impact of the currency exchange was four million pounds sterling (1.8 million euros) at the start of the year 2019, which as a consequence led to an increase in operating losses, estimated at seven million pounds sterling (7.9 million euros). millions of euros).

“Our airline continued to perform well, delivering a seasonal underlying loss in line with a strong comparative period last year,” said the group that today announced a strategic review of the air division, which will include all options, and in the that the sale is not ruled out, to provide itself with financial flexibility and accelerate its strategic plan, focused on the expansion of its branded hotels.

As of December 31, its debt amounts to 1,588 million pounds sterling (1,804 million euros) with a range of cash in the range of 150-200 million pounds sterling (170.4-227 million euros).

UNCERTAINTY THROUGH ‘BREXIT’

Thomas Cook points out that in order to face the challenges, it will reduce air capacity in 2019 and will focus its strategic focus on its branded hotels and those markets of “high quality” and greater margin, while continuing to reduce its costs in a rigorous manner to have ” greater operational flexibility. ”

The group notes that its expectations for the whole year, fixed as early as November 2018, remain unchanged, with limited visibility due to the greater uncertainty in the market, especially in the United Kingdom before an eventual exit without agreement of the European Union ( EU).

The winter season 2018/2019 remains virtually unchanged, although bookings have grown by 8% thanks to the support of higher volumes of the group’s airlines as a result of the arrival of additional aircraft purchased last spring, with an increase of 10 % in the middle of the reserves radio thanks to the pull of the demand towards Egypt.

“We continue to see strong demand from Turkey, Egypt and Tunisia, as customers seek
alternatives to the high hotel prices in the Canary Islands, “says Thomas Cook.

However, the average sales prices are 10% lower in general compared to the same season of the previous year, thanks to the combination of higher offer in the short and medium radius of their airlines with a fall in rates in their business 3% air

As for the reserves of tour operators of the group, they fell by 2%, with prices 3% lower. Long-distance destinations stand out with an increase of 3% in the United States and the Caribbean.

30% OF THE PROGRAM SOLD

With regard to summer programming, the group has already sold 30% of its programming, a percentage slightly higher than last year, with the capacity reductions applied in certain markets to minimize risks in the year. As a result, the reservations of tour operators have dropped by 12%, which helps support prices, with an average increase of 4%.

The reserves of the group airlines are below last year for the summer, with reductions in capacity in the short and medium radius compensated by the growth in demand for long-haul destinations. The average sales prices have gone up by 6% on average.