Peter Fankhauser, head of Thomas Cook UK, hailed the group’s turnaround in Britain following a reduction of winter losses in half-year results published yesterday.
Thomas Cook reported a return to profit in the UK business for the 12 months to March despite an operating loss of £154 million in the last six months.
Fankhauser, UK and continental Europe chief executive, said: “We made significant progress in transforming the business over 21 months, with the ability to overcome external factors such as Egypt.
“We more than doubled the UK EBIT [operating] margin despite the impact of Egypt to which 250,000 fewer customers travelled. The UK was making no money 21 months ago.”
The half-year operating loss in the UK was still the largest in the group, contributing 82% of the total winter-season losses.
However, Fankhauser said: “Our balance sheet is much stronger. We are driving ahead on all fronts.”
Thomas Cook comprises four businesses: the UK, Continental Europe, Northern Europe and Airlines Germany (which includes Thomas Cook Airlines UK).
Across Europe, he said: “We are transforming four distinct businesses into a fully integrated group.”
Cook reported UK bookings for this summer down 1% in line with capacity and average prices down 3% on a year ago up to the start of May. Group chief executive Harriet Green reported “some softness” UK summer prices.
Thomas Cook Airlines chief executive Christoph Debus attributed the average price fall to a change in the mix of products sold. He said: “It is mostly the mix and a move from 14-night to seven-night holidays. That is the main reason.”
Fankhauser said: “One third of our total revenue now comes from new products. Summer bookings at our concept hotels are up 44% on the same period last year and these hotels already deliver higher margins.”
He denied Cook took on more risk with its Concept hotels. Fankhauser said: “We help renovate the hotels. We share allocation through the whole group.
“It is a shift from non-exclusive, non-Concept hotels to hotels where we have a higher margin. I would say we are reducing risk.”
He noted the fall in customers booking holidays to Egypt and said: “We hope very much the democratic elections go well and stability is coming back.
“Egypt was one of our major destinations. As soon as political stability returns I’m sure our customers will want to go back.”
Sourced from Travel Weekly