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Thomas Cook/MyTravel to exceed euro 140m in savings
Thomas Cook expects to exceed the euro 140 million in savings originally earmarked through the merger with MyTravel.
But the newly-formed Thomas Cook Group said the recovery expected in the UK for summer 2007 “has not been as strong as we expected” – despite a 5% cut in capacity – due to high fuel costs and the impact of Air Passenger Duty.
The group’s first interim management statement said: “Cumulative bookings are currently tracking in line with this reduced capacity and average selling prices are 1% up year on year.
“While we continue to see an improvement in trading compared to summer 2006, we have not been able to fully recover the increased cost of fuel by charging higher prices.
“In addition, our customers are having to pay approximately euro 60m of additional Air Passenger Duty, which has acted as a brake on prices.”
Addressing the merger, which was completed two months ago, the statement said the group was “increasingly confident that the synergies achieved will exceed the euro140 million predicted in the prospectus for the merger.”
Details of the impact on jobs were not given.
Winter capacity is expected to be around 5% below last year as the company exits unprofitable programmes to enhance yields.
Cumulative bookings are 2% ahead of the prior year, and in the last four weeks bookings are 9% ahead of the prior year. As a result, 26% of our current capacity has been sold, 3% more than at the same time last year. But average selling prices are 1% down year on year.
For summer 2008 in the UK, the group is reviewing the combined programme “with regards capacity planning, exiting unprofitable programmes and optimising yield management.”
Early indications are good, with customers booking early to ensure they get the holiday of their choice, the company said.
*The group revealed it had entered the Czech Republic with the acquisition of local seven-branch agency and operator Travel Plus, for euro 3.1 million.
The purchase will act as the basis for establishing a new tour operator business in the country, described as a “promising market with good economic growth”.
by Phil Davies
Phil Davies
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