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Thomas Cook ‘to return to profit in 2005’
German travel group Thomas Cook AG has predicted a return to profit in 2005 after almost halving operating losses in the first nine months of the year.
While bookings improved by 5% in Germany, UK numbers dropped by 2.7% in the period to July in what the group described as a “sharply declining market”.
The UK slump was sharper at 3.7% at the beginning of September compared with an increase of 4.3% in Germany and 3% in Western Europe (Belgium, France and Holland).
Group losses were reduced by more than 47% at the end of the first nine months to the financial year to give a deficit of Euro121.4 million (£82 million).
Staff expenses remained unchanged across the group despite the workforce being cut by 6.4% with savings in salaries being offset by an increase in severance and pension obligations, the company said.
Overall passenger carryings across the group’s tour operators rose marginally to 7.1 million year on year with sales up 2.5% to Euro4.8 billion. The average holiday price was up Euro1 to Euro599 but the average length of holiday taken dropped by 2.1% to 9.1 days.
The group said it expected to achieve a break-even at the end of the financial year, once August, September and October figures are included.
Chairman Wolfgang Beeser said: “To get back into the black and stay there we must now focus on our main task and that involves making our core business more profitable.”
The group had a “good chance” of reporting a profit as early as next year.
“The management has been concentrating first and foremost this year on assuring Thomas Cook AG’s survival,” admitted Mr Beeser. “To this end, hard decisions had to be made and implemented.”
The group sited a recovery in package holidays sold to Majorca as “particularly pleasing”.
A statement said: “The popular holiday island that is so important for the leisure travel industry as a whole recorded an increase in customers of 13% for bookings with the various Thomas Cook AG tour operators.”
Report by Phil Davies
Phil Davies
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