Thomas Cook streamlines management structurePosted: February 16, 2015
Thomas Cook’s chief executive Peter Fankhauser has streamlined the company’s management structure as it looks to improve the “execution” of its strategy.
Fankhauser, who took over as Cook boss from Harriet Green in November, has created a smaller top management team to “take the decisions”.
This four-strong executive committee includes Fankhauser, chief financial officer Michael Healy, chief airlines and hotels officer Christoph Debus, and chief corporate officer Craig Stoehr.
Fankhauser said that Green previously had more than 20 people reporting directly to her and this structure needed to be streamlined.
He added that this did not mean that he had “cleared out people” in his first three months as chief executive, although he has removed the role of chief operating officer – a position Fankhauser held before his promotion.
Fankhauser has admitted that the company is relying on the “robust” strength of its UK division to meet profit expectations for the current financial year which runs to the end of September.
He said that the UK business was helping to offset a downturn in sales in Germany and the Nordic regions. Although sales have picked up in recent weeks.
The UK division made its highest underlying profit margin of 3.7% since 2009 during the last 12 months, which compares with a margin of 2.3% for the corresponding period in 2013-14.
But the UK still made an operating loss of £62 million in the quarter to December 31, 2014 – although this was a £7 million improvement on last year’s quarterly loss of £69 million.
Fankhauser expects this momentum in the UK to be maintained by stronger demand for long-haul holidays helped by the decision by the government to axe Air Passenger Duty for children under 12 for flights from May 1.
He added that the relaunch of Cook’s premium brand, Signature, in the UK had already seen sales increase by 20% for this summer compared with last year.
“We are seeing increasing demand for long-haul holidays as we are improving our offer in the market which is driven by our inhouse airline,” said Fankhauser.
“Customers will also have the advantage of the cutting of APD for kids – this will give us a tailwind because a family with two children will have to pay £140 less tax for their holidays.”
Fankhauser said the three key strategies for Cook would be: improving the quality of holidays through more differentiated or exclusive resorts (such as its Sentido and Smartline brands), selling through all channels, and “running the business as efficiently as we can”.
Cook made an operating loss of £73 million for the quarter compared to a deficit of £122 million for the same period in 2014. Revenue was up by 1.6% to £1.52 billion on a “like for like” basis but was down by 8.3% overall year-on-year.
Analysts are expecting Cook to make an underlying profit of £375 million before interest and tax in 2015, compared with a profit of £323 million last year.
Sourced from TTG Digital