News World Heatwave takes toll on Thomas Cook as holidaymakers delay booking

Heatwave takes toll on Thomas Cook as holidaymakers delay booking

British travel company Thomas Cook Group said a summer heatwave kept holidaymakers from booking last minute trips overseas and warned that annual profit would come in at the lower end of expectations.

But Thomas Cook said its airline business was growing strongly, particularly in Germany where it had added capacity, as it continues to benefit from the demise of Air Berlin last year, a trend also seen by German airline Lufthansa which also reported results on Tuesday.

The company denied a report in a British newspaper that it was considering splitting off its airline and selling a stake to an outside investor to reduce debt.

“We have no current plans to sell our airline,” CEO Peter Fankhauser told reporters on a call, although he did not rule out a future move.

“We have consistently said that we are open to play our part in the consolidation when it makes sense for our business,” he said.

Thomas Cook makes all its profit in the summer when its customers in northern Europe, including Britain, Germany and Scandinavia go on holiday, mainly to warmer destinations in southern Europe, such as Spain, Turkey and Greece.

But a heatwave has affected the company’s ability to extract higher margins from late bookings.

“Because of the weather, we have now in the market more capacity to sell for the late business,” Fankhauser said.

Thomas Cook said that as a result, full-year underlying operating profit would now be at the lower end of market expectations, from a 323 million pound ($424.26 million) to a 355 million pound range. In its last financial year, the 12 months to Sept. 30 2017, it made 330 million pounds.

Shares in Thomas Cook gained 3.9 percent to 100.7 pence at 0843 GMT. That represented a slight reversal of the 21 percent fall in the company’s stock over the last three months due to worries about the warm weather, compared with the mid-cap index which has risen 3 percent in the period.

Thomas Cook’s bigger rival TUI Group is due to report its third-quarter results on Aug. 9.

Jefferies analysts, who rate Thomas Cook a “buy”, cut their forecasts for annual earnings per share by 10 percent, but said the story remained positive in the longer term.

“This year’s abnormal weather does not affect our longer-term investment thesis, which remains unchanged,” they said.

Top Stories

Rain on the way all across Cyprus, snow on Troodos mountain

Rain all across Cyprus is on the way and so is snowfall on Troodos mountain, according to the Mediterranean island’s Met Office. The depth of...

Cyprus’ municipal solid waste per inhabitant among highest in EU

Cyprus' municipal solid waste per inhabitant is one of the highest in the EU, according to data released on Tuesday by the island's Statistical...

New contact details for “CyprusFlightPass” platform’s help desk

The contact details of the help desk for passengers who intend to travel to Cyprus from abroad and may have queries regarding the use...

UK to unveil hotel quarantine plans, public told not to book vacations

Britain will announce on Tuesday whether it will bring in mandatory quarantine in hotels for some or all arrivals, the country's coronavirus vaccination minister...

Sokratis joins Olympiakos after Arsenal exit

Former Arsenal defender Sokratis Papastathopoulos has joined Olympiakos Piraeus on a deal until the end of the 2022-23 season, the Greek Super League champions...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...