The merged Thomas Cook/MyTravel says UK summer trading remains challenging as the new Thomas Cook Group unveiled its winter trading performance.
Results for the six months ending April 30, traditionally a loss-making period, saw group operating losses reduced by seven per cent to 323.1 million euros.
The company has cut capacity in the UK by five per cent this summer but bookings still remain five per cent behind.
Almost three quarters of summer 2007 capacity has been sold, in line with last year, but with average prices flat.
“While conditions for the summer remain challenging in a number of markets, the board believes that in the absence of significant adverse events, such as were experienced last year, trading conditions in the UK for the remainder of the summer season should be significantly improved,” a statement said.
This would mean the financial performance for the full year would be in line with expectations.
Issuing the interim results the day after announcing the closure of 150 UK travel agencies, six sites and the loss of up to 2,800 jobs – a sixth of the workforce – to make savings of £95 million (see previous TravelMole story), joint chief executive Manny Fontenla-Novoa said: “Despite additional effort required by all those involved in the merger process, our first pro forma results show a seven per cent improvement on the same period last year on the pre-exceptional operating profit line, demonstrating our on-going focus on trading performance.”
A breakdown of the half year figures saw MyTravel reducing UK winter losses by 13.7 million euros to 152.2 million euros based on sales down from 638.6 million euros to 588 million euros, reflecting an 11% cut in capacity.
“Although selling prices achieved were 3% higher than the prior year, this increase was not enough to cover the increased prices of fuel, passenger taxes and other director costs,” the interim statement said. “As a result the gross margin in the UK was lower year-on-year.”
Thomas Cook in the UK saw losses come down by 4.4 million euros to 127.3 million euros, based on sales up by almost 70 million euros to 804.2 million euros helped by increased average selling prices and a higher number of passengers carried.
“Although the selling prices achieved in the tour operator were 2% higher year-on-year, this increase was not sufficient to cover the increased cost of flying,” the company said.
Meanwhile, the group has appointed former TUI supervisory board member and previous Amadeus chairman Hemjo Klein as a non-executive director along with former Stena Line chief executive Bo Lerenius.
*See linked story giving details of cutbacks and union reaction
by Phil Davies
