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Thomas Cook sees later booking trend
Monday, 12 Feb, 2009
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Bookings for holidays this winter are coming in late, while summer sales from the UK remain ‘robust’, Thomas Cook reported today.
The group reduced its loss for the three months ending December by 52% to £27.4 million.
Thomas Cook revealed that its acquisition of a majority stake in Gold Medal is subject to European Commission approval and is expected to be completed in March.
The group has also entered into option arrangements which will enable it to acquire the remainder of Gold Medal from March 31, 2010.
Med Hotels, acquired from Lastminute.com, is to be combined with Hotels4U which was acquired in February 2008.
For this winter the company said it remained confident about its trading position.
“We have seen a shift towards later booking in all key markets. However, departed load factors have been at last year’s levels or above,” an interim management report said.
“The UK is performing strongly. Bookings for the winter season are down broadly in line with capacity and, whilst we have seen a later booking trend, departed load factors are ahead of the prior year.”
The company revealed that average winter selling prices from the UK were 7% ahead cumulatively and 10% ahead in the last four weeks.
“Our strategy to focus on medium haul destinations has ensured that we are well placed to take advantage of the strong demand we continue to see in those markets, particularly Egypt, where we have a leading position.”
For the summer, Thomas Cook said selling was well underway in the UK and the current position was good.
“Trading to date in the UK has been robust,” the company reported. “Cumulative bookings are tracking in line with capacity reductions of 11%. However bookings have been stronger over the last four weeks and are down only 6%.
“We have now sold 43% of our capacity, in line with the prior year, and have 10% less left to sell than last year overall and up to 15% less left to sell in the off peak months. Average selling prices are up 9%.
“Our ongoing strategy of increasing our medium haul focus is proving successful.
“Demand for medium haul, which now represents 69% of our total summer charter programme, is strong, particularly to Turkey where we are the market leader.”
Group CEO Manny Fontenla-Novoa said: "We are pleased with our results in the first quarter, which establish a solid foundation for the rest of the year.
"Trading for the winter 08/09 season continues to be robust. In all markets prices are ahead and load factors on departed flights are at least in line with last year’s level.
“In addition, bookings are broadly tracking our capacity reductions, except in Northern Europe where the impact of a later Easter has been more marked but where we anticipate to continue to achieve high load factors on departed flights.
“In Canada the peak winter charter market remains extremely competitive but we are benefiting from our market-leading presence in independent travel, following the acquisition of TriWest, which reduces our dependence on the charter market.
"For the summer ‘09 season in the UK we have sold 43% of available capacity. In our other major markets it is early days and clear trends have not yet emerged although we have seen a strengthening of bookings over recent weeks.
"We remain well placed to manage our business through challenging trading conditions. We have an asset-light and flexible business model which continues to enable us to adapt our plans, particularly capacity and destination mix, for changing demand."
by Phil Davies
Phil Davies
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