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Thomas Cook Reports £1.46bn Half-year Losses

Written by: Keith Tully

Reviewed: Thursday 16th May, 2019

Thomas Cook Reports £1.46bn Half-year LossesThomas Cook, the UK’s oldest package holiday business, has reported operating losses worth £1.46 billion for the six-month period to the end of March 2019.

The company has cited Brexit uncertainty as a key contributing factor in its disappointing performance as significant numbers of UK consumers opted to holiday closer to home instead of visiting EU countries in the upcoming summer months.

“The first six months of this year have been characterised by an uncertain consumer environment across all our markets,” Peter Frankhauser, the company’s chief executive, said in a statement.

“The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.”

Another major financial headache for Thomas Cook has been the necessity for it to write down much of the value associated with a package holiday company it acquired in 2007.

Indeed, that revaluation of MyTravel is said to account for most of the losses incurred by Thomas Cook during the first half of the financial year for the company.

The need to revalue MyTravel is described as having arisen because of “the weak trading environment” currently in evidence.

The number of tour operator bookings recorded by Thomas Cook were down 12 per cent in the six months to the end of March as compared to the same period of the year before.

Meanwhile, the company has only been able to sell 57 per cent of the holiday deals it made available for the summer of 2019, which is similar to the figures recorded fo6r the year before.

The Association of British Travel Agents (Abta) has made clear that trading is tough for travel agents across the UK at present in large part because so many people are waiting to see what happens with Brexit before making a holiday booking.

Thomas Cook has said that it expects to be faced with further operational headwinds in the coming months as Brexit uncertainty lingers and as the impact of “higher fuel and hotel costs” continues to be felt.

Keith Tully

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Keith Tully
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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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