For the first quarter of 2019, Thomas Cook has reported revenue up slightly, by 1%, to £1.656bn but the company reported a widening underlying operating loss that increased by £14 million to £60 million. The group airline delivered a seasonal underlying loss in line with a strong comparative period last year. The group airline carried over 20 million passengers and generated £3.5 billion in revenue, with underlying operating profits growing 37% year-on-year to £129 million.
The company has confirmed that it has begun a strategic review of the group airline that would “increase financial flexibility and accelerate execution of our core strategy”.
Peter Fankhauser, Chief Executive of Thomas Cook commented that the “knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun” adding that customer uncertainty has resulted in slower summer 2019 bookings.
Fankhauser said: “We recognise 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. As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which 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.”
For the rest of this winter season, Thomas Cook states that for the airline, overall bookings are 8% ahead, in line with capacity increases. Looking further ahead into the summer period, Thomas Cook says that group airline bookings are below last year, as it has “selectively reduced capacity in short and medium-haul destinations by taking in less wet-lease capacity”.