A worker changes the window display of Thomas Cook in Loughborough, the UK. Picture: REUTERS/DARREN STAPLES
A worker changes the window display of Thomas Cook in Loughborough, the UK. Picture: REUTERS/DARREN STAPLES

London — On Thursday, British travel firm Thomas Cook  launched a review of its airline after posting a worsening quarterly loss on challenging trade.

The company, which offers package holidays to northern Europeans looking for summer sunshine, has decided to focus more on hotels.

“We are, today, announcing a strategic review of our group airline,” said CEO Peter Fankhauser in a results statement. “We are at an early stage in this review process that will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course.”

Thomas Cook’s airline business operates a fleet of 103 aircraft, about one quarter of which serve long-haul destinations. It has, however, reduced 2019 capacity in the face of challenging conditions, as holiday makers eye economic uncertainty arising from Brexit.

“Brexit is in many customers’ minds,” Fankhauser admitted in a conference call to reporters.

The group has sought to slash costs after its 2017-2018 performance was also knocked badly by rising costs and a long period of hot European weather over the summer — which saw customers put off last-minute holidays abroad.

Underlying operating losses widened to £60m in its first quarter  to December 31, compared with £46m a year earlier, Thomas Cook also revealed on Thursday.

“As expected, the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun,” added Fankhauser.

“Where Summer 2018 bookings started very strongly, bookings for Summer 2019 reflect some consumer uncertainty, particularly in the UK.”

Total revenues, meanwhile, edged 1% higher to £1.656bn in the reporting period.

“Thomas Cook Group has undergone significant transformation over the past five years as we have streamlined our operations and focused on a clear strategy in both our airline and tour operator businesses,” it added in the statement.

“However, it is clear that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business.”

AFP