Thomas Cook puts airline business up for sale to raise cash

TUI and Thomas Cook seems to be losing ground to smaller rivals

Thomas Cook has said it is conducting a "strategic review" of its airline as it seeks to find funds to invest more in its hotels business.

"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".

Airlines across Europe are struggling amid fierce competition.

Tui has shocked investors with a profit downgrade and Thomas Cook has put its airline up for sale, underlining the pressures being felt by travel operators this year.

Last year's hot weather seems to still be hurting sales.

'This review, which could result in a sale of the division, is an acknowledgement that the company needs to take radical action to steady its performance and fix a fragile looking balance sheet, ' says AJ Bell's Russ Mould.

"Where Summer 2018 bookings started very strongly, bookings for Summer 2019 reflect some consumer uncertainty, particularly in the United Kingdom, and our decision to reduce capacity which will both mitigate risk in our tour operator business and help our airline to consolidate the strong growth achieved past year", said Peter Fankhauser, Chief Executive.

The company, which offers package holidays to northern Europeans looking for summer sunshine, has made a decision to focus more on hotels.

The embattled travel agent saw its operating loss increase by £14m year on year to hit £60m for the three months to the end of December as holiday bookings dropped, it revealed.

Net debt jumped to £1.59bn.

Credit Suisse said easyJet, Lufthansa, IAG and Ryanair could be interested in different parts of the airline business, which it said could be worth 1.8 billion to 3.2 billion pounds.

Thomas Cook operates planes in the UK, Germany and Scandinavia.

"We have been clear that Thomas Cook doesn't need to own an airline outright to be a successful tour operator". A quarter of the fleet flies long-haul.

In the first-quarter trading update, it said it would not change its outlook for the full-year. The firm earned "Neutral" rating on Wednesday, September 26 by Citigroup. In all, it operates 103 aircraft and posted a 37 per cent rise in operating profit a year ago to £129 million (S$225.8 million).

While the company blamed too many airlines chasing too few passengers, costs may be the real problem, industry experts said.

The oldest travel company in the world stumbled badly previous year when a heatwave in northern Europe deterred holiday makers from booking lucrative last minute deals, leading to two major profit warnings and talk of a need to raise funds.

Related News:



Most liked

6 year-old battling cancer sworn in as police officer
Abigail Arias, 6, who is battling cancer, stands on a chair and is sworn in as a Texas police officer - complete with a donut. Garivey first met Abigail in December, during the department's "Pancakes with Santa" event.

Western Alberta unemployment rate drops to 4.8 per cent
The Canadian dollar jumped more than a quarter of a cent in the moments after Statistics Canada announced the jobs numbers. The central bank stayed on the sidelines last month after five hikes since July 2017, and most analysts expect no action.

FDA: Additional cases of cancer linked to breast implants
The FDA also announced it will be sending letters to doctors, urging them to learn about ALCL. Those who already have implants should look out for new swelling, lumps, or pain around them.

Batch of 12,000 blood plasma found contaminated with HIV
South China Morning Post reports that "The faulty batch comprised 12,229 50ml bottles of plasma due to expire in June 2021". Shanghai Xinxing Pharmaceutical has been instructed to halt production of the vaccine and to initiate an emergency recall.

Amazon proposes regulatory guidelines for facial recognition
The technology is particularly prone to misidentify people of different ethnicities, civil liberties groups argue. The person shared details of the prompt with Buzzfeed anonymously.

Ocado warehouse fire in Andover finally out
And it said it had comprehensive insurance for the property, stock and equipment on site, and for business interruption losses. It will, we believe, issue a slow sales growth warning while it tries to source alternative solutions to fulfil orders.

Android vulnerability lets hackers wreak havoc using, er, a PNG file
Since Google hasn't released the technical details of the flaw, so it won't be easy for anyone to abuse this hacking method. The flaw found in Android specifically deals with three vulnerabilities.

Storm Erik leaves SNOW in its wake as temperatures PLUMMET back down
Storm Erik came with a status orange weather warning for Donegal, Mayo and Galway and wind gusts at times were really powerful. A separate yellow warning running until 3pm on Saturday for northern Scotland predicts heavy rain could lead to flooding.

Southampton’s Danny Ings out for three weeks with hamstring injury
But the two teams could flip situations if someone were to win this Saturday so let us see how each team could win on Saturday. They struggled bit to score against two teams that sat back having only scored one goal in the last two matches.

Boston Celtics confident Irving 'marriage' will still go ahead
Due to an National Basketball Association rule, the Celtics are not allowed to trade for Davis until Irving becomes a free agent. The former No 1 overall pick can opt out of the final year of his contract this summer and test free agency.

Violence mars yellow vest protest in Paris as unrest spreads to Rome
But last week's official estimates were disputed both by march organisers and an independent estimate carried out for news media. The protests have brought hundreds of thousands of people out onto the streets all over France.

Sportscaster arrested for damaging 'racist' Plantation Estates sign
The local ABC and CBS great was famous for his " Let's go to the videotape " catchphrase. He turned himself in to police Thursday and charged with criminal mischief.

Trump, Xi won't meet before March 1 tariff deadline
The president is headed to Asia to meet North Korean leader Kim Jong Un in Vietnam Feb 27 and Feb 28. Negotiations between Chinese and USA officials are still continuing, The New York Times reported.

Renault to alert prosecutors over ex-CEO Ghosn’s wedding costs
After his Nov 19 arrest, Ghosn was quickly ousted by Nissan and Mitsubishi Motors , the other Japanese partner in the alliance. Renault's board was told about the discovery as reported in Le Figaro on Wednesday , Reuters reported .

TSA confiscated record number of guns from carry-ons in 2018
That 2018 tally included 21 guns at Logan International Airport, nine at Bradley International Airport in CT , four at T.F. The pilot, Brian Andrew Machtemes , who lives in Minnesota, was arrested at Southwest Florida International Airport.