Daily Mirror (Northern Ireland)
Plane future up in the air Thomas Cook needs to slash debts
HOLIDAY giant Thomas Cook has put its airline up for sale to slash debts and turbocharge a turnaround.
The firm is looking at options for the of fsho ot, which has 103 pl an es, generated £3.5billion in sales last year and saw profits surge 37% to £129million.
Analysts say the airline, with its prized take-off and landing slots, could be worth between £1bn and £1.5bn, which dwarfs Thomas Cook’s £477m stock market value. The tour operator needs money to plough into hotels and online, and cut its near £1.6bn of debt which cost it £150m in interest last year.
CEO Peter Fankhauser said: “Thomas Cook doesn’t need to own an airline to be a successful holiday company.”
Around half the airline’s 20 million passengers a year are Thomas Cook holidaymakers. Having those guaranteed “bums on seats” is appealing for a buyer, with easyjet, Ryanair and British Airways owner IAG thought of as potential suitors.
The review triggered a j ump i n Thomas Cook’s share price yesterday, despite cut-throat competition leading to losses soaring by £14m to £60m in the final three months of last year.
Revenue rose 1% to £1.65bn.
Thomas Cook said “some consumer uncertainty”, including around Brexit, was impactin g summer ho li d ay bookings. Package holiday sales are down 12% in line with a cut in the number of breaks for sale, but prices are up 4%.
Shares in rival Tui fell yesterday after it cut its profit forecast due to last year’s “extraordinary hot weather” and the weak pound.
Oil = $60.83