Thomas Cook unveils cost of Egypt and Tunisia protests

Protests in Tunisia and Egypt are expected to cost Thomas Cook around £20 million.

In its Interim Management Statement, the group said it has implemented contingency plans to help mitigate the financial impact by rebalancing the programme to other destinations.

Thomas Cook reported revenue up 7% to £1,810.4m in the first quarter, reflecting increased volumes and improved product mix.

It has reduced seasonal underlying loss from operations by 10% to £37.3m.

Group CEO Manny Fontenla-Novoa said: “Throughout Continental Europe, the economic environment continues to support demand, which is reflected in our bookings and capacity plans.

“In the UK, whilst the consumer outlook remains uncertain, we have seen an increase in summer bookings and the actions taken on costs will further strengthen the business.”

Outlining current trading, Thomas Cook said before the disruption in Egypt, bookings to Egypt from the UK for winter were already down 4% mainly as a result of the “disproportionate” increase in Air Passenger Duty.

It said UK winter bookings were relatively steady in the face of an uncertain economic environment.

“Average selling price increases of 2% are expected to trend upwards as the season progresses and mainly reflect a change in mix.

“Bookings over the Easter and Royal Wedding period are up on prior year, as consumers make the most of the extended holiday period. Capacity has been increased since our last update in December to meet this additional demand.”

Looking forward to this summer, the group said bookings have picked up in all markets since the New Year, underpinning its confidence to add capacity.

“The economic environment in Continental Europe remains supportive, whilst in the UK, we continue to remain cautious.”

It said UK bookings are strong and are ahead of planned capacity increases of 3%.

“Average selling prices are up 5%, but mainly reflect a further shift in mix towards all inclusive product.

“Bookings intake has been consistently good and in the last four weeks bookings were up 7% and average selling prices up 5%.”

By Bev Fearis