Thomas Cook could sell airline
Travel group Thomas Cook says it is willing to sell its profitable airline business to raise cash and fund its fightback from a torrid 2018 and signs of a tough year ahead.
Travel group Thomas Cook says it is willing to sell its profitable airline business to raise cash and fund its fightback from a torrid 2018 and signs of a tough year ahead.
The world’s oldest travel company stumbled badly in 2018 when a heatwave in northern Europe deterred holidaymakers from booking lucrative last-minute deals, leading to two major profit warnings and talk of a need to raise funds.
The British group, with a market valuation of £540m and net debt of £1.6bn, said rather than launch a rights issue it will consider all options for the most successful part of the business.
“Thomas Cook doesn’t need to own an airline outright to be a successful holiday company, so long as we retain a strong relationship to provide our customers with the … service they need for their journey,” CEO Peter Fankhauser said.
A sale would enable the company to invest more in its own hotels, improve its digital sales offering and drive further cost savings.
Its airline, which fared much better in 2018 than the tour operator business, consists of Germany’s Condor and UK, Scandinavian and Spanish divisions. Operating 103 aircraft, it had £3.5bn in revenue and a 37% rise in operating profit to £129m in 2018.
The airline was insulated as the tour operator pledges to fill many of the airline’s seats and makes up the difference if prices have to be slashed to fill them.
Fankhauser said the review is at an early stage and will include all options.
Analysts at Credit Suisse said easyJet could be interested in Thomas Cook’s airport slots in Britain and Germany, as well as its Airbus sub-fleet.
Credit Suisse said that Thomas Cook’s airline business could be worth £1.8bn-£3.2bn, and that Lufthansa, IAG and Ryanair could all also be interested.