Calls to split Thomas Cook

THOMAS Cook could be broken up to revive its fortunes and eliminate its massive debt pile, it was claimed yesterday.

Analysts at Barclays suggested the travel firm’s airline and tour operator divisions should be split to raise cash to pay off debts, which are around twothirds of its £558m value.

Thomas Cook is preparing to report a £58m fall in full-year profits to £250m today after warning earnings would be lower than expected this week – the third time since July.

It blamed warm weather in the summer for denting sales as people delayed getaways or stayed at home. It also scrapped its full-year dividend after it debts spiked to £389m last year – 45pc higher than expected.

Shares have plunged by twothirds in the past six months to just 36.08p last night.

Analysts at Barclays warned that the company’s cheap price tag left it vulnerable. ‘Thomas Cook could split its tour operator from its airline, potentially leading to lower debt,’ it said in a broker note. ‘With concerns around the UK economy, earnings may continue to disappoint.’

But Chris Beauchamp, chief market analyst at IG, said Thomas Cook would still be vulnerable to competition posed by travel upstarts such as Airbnb.

‘It sounds like a good idea and would at least let them raise some cash to cut back on debt,’ he said. ‘But then you would end up with a travel business that faces the same problems as now – growing use of independent websites and a weak UK consumer environment.

‘Which sort of leaves you where you are now, without the benefit of the airline element.’

Thomas Cook declined to comment last night.