Thomas Cook halves losses as its own hotels lift holiday margins

LOSSES have halved at tour operator Thomas Cook after buoyant booking numbers and a less turbulent ride for its German airline.

Peter Fankhauser, the Swiss businessman who has been chief executive since 2014, has been working to improve the image of the business in the wake of the 2015 independent Justin King review into its health and safety standards, and increase profitability of the decades-old operator as part of his strategy overhaul.

Summer bookings were up 11pc for the group thanks to the surging popularity of destinations such as Greece and Bulgaria, both of which saw the number of travellers booking to go rise by a fifth.

The group said demand for Turkey had also recovered, and that it might start flights to Tunisia as early as spring on the back of the UK’S move to relax travel restrictions to the north African destination two years after 30 British holidaymakers were killed in Sousse.

Average group selling prices were only up 1pc, but the company’s move to launch more of its own hotels and sell these as part of package holidays is proving fruitful.

In its UK business, the largest by profits, it said package holiday prices were up 7pc. When customers opt for one of Thomas Cook’s own hotels it makes for better profits. Mr Fankhauser said demand from UK customers for such accommodation was evident in its winter booking numbers, which were up 5pc at prices 4pc higher than last year. He suggested this “reflects good demand for our own-brand hotels”.

The improved performance meant pre-tax losses fell by more than half to £31m, on the back of sales of £2.27bn, for the three months to June 30. This was taken as a positive by investors who sent the shares up 4.5pc to 107.7p.

Beyond its core business, Thomas Cook’s German airline, Condor, saw cash losses more than halve to £13m, leading Mr Fankhauser to predict the carrier would return to profit at the full-year mark in a couple of months’ time. The group’s net debt also fell by £96m to £404m, in yet another suggestion the tour operator is generating decent cash with which to strengthen its balance sheet.