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 offshoot, which has 103 planes, 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 jump in 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 impacting summer holiday 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.