The Peterborough Evening Telegraph
Turbulent times for troubled Thomas Cook
It has been a dismal couple of weeks for Thomas Cook, the holiday giant that is responsible for the livelihoods of more than 1,000 people in Peterborough.
Two profits warnings in as many weeks, followed by the revelation that it had plunged into the red with losses of £163 million and had debts of £368 million have shaken investors.
It triggered a dramatic fall in the share price and the world’s oldest tour operator was turfed out of the prestigious FTSE 250. Its removal takes place on Christmas Eve.
Spurred into action, senior directors showcased their confidence in the company and bought tens of thousands of shares.
But profit warnings and battles in the boardroom are not new to Thomas Cook and the company has moved on. Senior figures say the problems are different now.
Seven years ago, the then chief executive Manny Fontenla-Novoa issued three profits warnings in one year.
The company was forced to secure extra funding of £100 million from its 17 banks and it even postponed the release of its annual trading figures, which had been expected to reveal a 31 per cent fall in profits. Its debts stood at £900 million.
The situation was so grave that the Prime Minister David Cameron called for a government review into the health of Thomas Cook, which he described as an iconic business. If that review was ever drawn up, it was never made public.
Mr Fontenla-Novoa resigned in 2011 after 11 years at the helm and was replaced by travel industry newcomer Harriet Green in 2012 who embarked on a transformation plan.
During her two years at the top of a company widely regarded as disjointed, bloated and with no internet strategy, she oversaw a £440 million cost saving programme that resulted in 2,500 job losses and 400 branch closures, but also a rising share price.
A boardroom fallout seems to have led to her sudden resignation in 2014 to be replaced by travel industry veteran Peter Frankhauser.
Thomas Cook, which this year took 22 million people on holiday - up two million on the previous year - says now the focus is on making its UK business more profitable
A spokesman said: “We found the hot summer meant people delayed booking until the most heavily discounted part of the year, which is the last quarter of the year but our annual results cover the 12 months to the end of September.”
A new strategy includes driving greater awareness of its own hotel brands, which attracted 1.2 million people last year and from which it makes more money, and ways of cutting back capacity risk.
It will also work on a greater integration of its financial services business with its 600 retail stores.
Mr Fankhauser said: “Given the critical importance of turning around the performance of the UK business, I have decided to hand back the leadership of the UK Source Market to Chris Mottershead for the time being. I am confident that his experience in running a British holiday company will help to accelerate the UK’s return to profitable growth.”