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tleeds

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Re: Thomas Cook - Review Of UK Business Model

Thomas Cook faces a long journey back

The travel operator plans to review its UK business model after this year's operating profits fall £60m below City expectations.

Should news of tough trading in Britain, and a hiccup in France as the locals choose to avoid North Africa, cause Thomas Cook's shares to crash by 28%?

Actually, yes. The travel business is a game of big volumes and thin profit margins; it does not leave much room for setbacks. Last year, Thomas Cook carried 22 million passengers who paid almost £9bn for their holidays and flights, but the group made top-line operating profits of only £362m.

Source & Full Article: http://www.guardian.co.uk/business/2011 ... homas-cook

It seems like this Guardian article is illustrating the fact that the business and finance side of the airline is being reviewed and that 'drastic' action will be made - says a seperate news story...

Not good news at the best of times!
 

lbaspotter

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Its not at alll good Thomas Cook Group UK by looks of things. As there Bos has quit his job this morning according to the Travel Trade Gazzet midday update.

Source: http://www.ttgdigital.com/news/fontenla ... 99.article

Fontenla-Novoa steps down from Thomas Cook
3 August 2011 | By Rob Gill


Thomas Cook Group has announced today that chief executive Manny Fontenla-Novoa is to step down from his role with immediate effect.

Sam Weihagen, currently Fontenla-Novoa’s deputy, will take on the role of interim group chief executive. Cook said a search process is underway “to identify a permanent successor and an announcement will be made in due course”.

Cook chairman Michale Beckett said: “The board would like to thank Manny for his contribution to the group. He leaves with our very best wishes for the future.

“In Sam Weihagen, we have a highly successful and experienced executive and the board has every confidence in his ability to lead the group until a new CEO is appointed.”

Fontenla-Novoa said: “Thomas Cook and its people have a sound heritage and I have been proud to have been part of the company.”

Cook has seen its shares plunge by nearly 50% since it issued a profits warning on July 12 and Fontenla-Novoa’s management of the company has been questioned by investors and city analysts.

Fontenla-Novoa, 57, has been Cook’s chief executive since 2007 when the company merged with MyTravel. He was previously a founding director of Sunworld and first joined Cook in 1996 when it purchased Sunworld.
 

TheLocalYokel

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Thomas Cook axes six aircraft and 250 airline jobs

Thomas Cook Airlines will cut 250 jobs and axe six aircraft from its UK fleet this winter.

The Thomas Cook group told those at risk of redundancy yesterday and has begun a 90-consultation with affected staff.

The cuts amount to about one seventh of the company’s UK fleet and will fall most heavily on long haul, with five wide-body aircraft ceasing flying from the UK.

However, a group spokeswoman said: “We are not cutting long-haul all together. This is about the right fleet for the current capacity requirements. It is not about offering fewer holidays next summer.” She said the summer 2012 schedule had yet to be finalised.

The group’s UK long-haul programme this winter will make up 8% of the total, down from 13% last winter.

Thomas Cook will return three Airbus A330s to their leasing company, along with a narrow-body Airbus A320. A Boeing 767 will be reassigned to Thomas Cook’s German airline Condor and another A330 will transfer to Thomas Cook Northern Europe.

The spokeswoman said a review of the airline began in May, ahead of the group’s high-profile problems in July in August when a profits warning triggered a collapse of its share price and change of chief executive. This subsequently became part of the wider review of the UK business announced this summer.

She added: “The review will be about building the business as well as cutting costs.”

Ian Ailles, Thomas Cook UK mainstream chief executive, said: “The fleet reduction is one measure within our overall strategic and operating review of the UK business and demonstrates the decisive action we are taking to improve the profitability of our UK business.

“The airline review has focused on leases, seasonal capacity and mainstream tour operator demand, as well as operational efficiency and profitability.”
http://www.travelweekly.co.uk/Articles/ ... witterfeed

Oh dear, another airline cutting back with the loss of many jobs.

It seems it's the long haul that is taking the brunt of this, with mainly wide-bodied aircraft being cut from the fleet, though two will be moved to another part of the Group in Europe.
 

Aviador

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It just goes to show aviation tax (APD) isn't working with P&O Cruises cutting back long haul flights and now Thomas Cook following suit. Other airlines have revised their long haul plans, Monarch Airlines and Jet2 among the list of other airlines that have scaled back their long haul ambitions.
 

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It just goes to show aviation tax (APD) isn't working with P&O Cruises cutting back long haul flights and now Thomas Cook following suit. Other airlines have revised their long haul plans, Monarch Airlines and Jet2 among the list of other airlines that have scaled back their long haul ambitions.
Unfortunately, I cannot see APD being reduced - more likely it'll be increased.

The government has nailed its colours to the APD mast and no politican will ever admit to being wrong, even when they themselves know it.
 

tleeds

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Thomas Cook in talks with banks

Thomas Cook has announced it is in talks with banks about increasing the amount of money it can borrow.

The travel firm said it had seen a "deterioration of trading in some areas of the business in the current quarter".

It said it would delay releasing its full year results until it had concluded the discussions.

Last month, Thomas Cook announced it had arranged a new £100m credit agreement with its bankers.

The company has stressed that it is not currently in breach of the terms of any of its loans, but that it wanted to "improve its resilience if trading conditions remain difficult".

It said last month that the terms of an existing £150m loan and an £850m credit facility have been amended to help cashflow.

It looks like Thomas Cook are in deep financial difficulty. Surely we cannot lose one of the top travel groups in the country.... It would be a huge loss! :cry:
 

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It's happened before Tomleeds so it could easily happen again. The last major travel company to go under must have been the International Leisure Group ILG, which was the parent company of both Air Europe and Intasun Leisure back in 1991. It was a huge company, probably on a similar scale to Thomas Cook.

Thomas Cook need to be quick and off-load their non-profit making parts of their business. It's no good clinging onto the long-haul business for instance if it's loosing them bucket loads of money.

I wish them well for the future and I sincerely hope they can make the necessary changes quick enough to satisfy the banks that they can turn things around.
 

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I'm trying to remain upbeat about Thomas Cooks prospects but looking back over the years at other airlines left in a similar predicaments, more often than not the associated bad press forces the company out of business. Weeks before FlyGlobespan went under the airline was in talks with the banks. Bad press caused so many booking cancellations the business couldn't be saved. If Thomas Cook goes under it will probably take the Co-op Travel arm of the business with it. From a consumer point of view, it is vital this company stays in business because without it, it will leave very little competition for the Inclusive Tour companies left.
 

lbaspotter

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Well it looks like the government may step in or have a look at Thomas Cook and its support from the Banks.

Cameron asks for report on Thomas Cook

Prime minister David Cameron has asked for the government’s business department to provide a report on Thomas Cook.

Cameron was asked about the beleaguered tour operator during today’s prime minister’s questions in the Houses of Commons by Peterborough’s Conservative MP Stewart Jackson.

He replied: “I have obviously asked the business department to give me a report on what is happening in terms of Thomas Cook because I think it is important to make sure that this business is in a healthy state.”

Cameron also called Cook an “iconic and important British business which has given people a lot pleasure over the years”.

Jackson said he was asking the question on behalf of the 1,600 staff based at Cook’s headquarters in Peterborough who were concerned about media coverage of the operator’s “difficulties” over the last two days.

“People can support the company by booking through Thomas Cook safe in the knowledge that they are protected by the Atol scheme and will have an excellent holiday to boot.”

In a separate development, it has been reported that business consultancy Ernst & Young has been appointed by Cook’s banks which has been interpreted as a sign that there could be a restructuring of the company.

Sourcehttp://www.ttgdigital.com/news/cameron-asks-for-report-on-thomas-cook/4682351.article
 

lbaspotter

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Well it now looks like Thomas Cook may get its extra funding and support from the banks. But the Banks may force the Thomas Cook Group into a Major financial restructure of its buisness

It is also worth pointing out that it's share's have again increased by about 20%. This morning when the Markets opened they were at about 12p but now stand at about 14.5p but it's still away down from the high off 41p on Monday evening before the news broke on Tuesday.

Thomas Cook heading for restructure?

Thomas Cook is being tipped for a major financial restructuring after asking its banks for a new loan facility this week.

The struggling tour operator saw its shares collapse by 75% on Tuesday in the aftermath of the announcement that it was postponing its annual results - originally due out today - as it conducted talks with its banks about securing another £100 million facility to see it through the end of the year.

This group of 17 banks has now reportedly hired accountancy firm Ernst & Young to advise them on their options regarding Cook which analysts believe could include a major restructuring. Although the banks are thought unlikely to want to take control of the company.

Cook’s shares stabilised on Wednesday - at one point they were up by more than 25% - before closing at 11p on the London Stock Exchange which was an increase of 9% on Tuesday’s close. The shares rallied again in early trading on Thursday when they rose by more than 20% to around 14p.

But the shares are still down 73% on the closing price of 41p on Monday before the company dropped its bombshell to the City on Tuesday morning.

During Tuesday’s massive sell-off, Cook’s biggest shareholder Lloyds Banking Group also cut its 8.96% stake to less than 5%.

Lloyds is included in the syndicate of Cook’s lenders but its shareholding in the company is through its Scottish Widows subsidiary.

Source: http://www.ttgdigital.com/news/thomas-cook-heading-for-restructure/4682354.article
 

lbaspotter

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Not good news at all. As it's just been announced Thomas Cook’s has had its ATOL insurance for flight-only sales temporarily withdrawn...

Trade reassured after insurance suspended on Thomas Cook flight-only

Advantage has rushed to reassure the trade after it emerged that insurance on Thomas Cook’s flight-only sales had been temporarily suspended.

The suspension means that anyone selling Thomas Cook seats on an Atol-to-Atol basis or as part of a dynamic package, will not currently be protected by scheduled airline failure insurance (Safi).

Advantage leisure director Julia Lo Bue-Said said the consortium had received a letter from Northern and Western Insurance Company on Tuesday confirming that the insurance would be temporarily withdrawn.

However she said: “This is a really small part of the overall business. I would reassure the trade not to be worried by this.”

Source: http://www.ttgdigital.com/news/general-news/trade-reassured-after-insurance-suspended-on-thomas-cook-flight-only/4682360.article
 

lbaspotter

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Well like I've been saying all along this morning it has been confirmed that the Banks have agreed to lend the extra £100million to Thomas Cook Group.

Here's the official press release from the Thomas Cook Group

http://online.hemscottir.com/tools/insite/jsp/download_file.jsp?cms_system_id=2294966833&fundamental_id=6901389&article_type=thoc-press&componentId=31242058

Thomas Cook Group Plc
Amendment to existing bank facilities and new £200m bank facility signed


Thomas Cook Group is pleased to announce that we have reached agreement with our banking group to provide the Group with a new facility that significantly improves the robustness of the Group’s financial position.

Our banks, led by Barclays, HSBC, RBS and UniCredit, have agreed to provide a new £200m facility available until 30 April 2013, which replaces the £100m short-term facility announced on 21 October 2011. In addition, they have agreed a further relaxation of the financial covenants under the existing facilities. This provides the Group with much increased headroom to deal with unexpected events and the effects of an uncertain economic environment.

As previously announced, the Board is taking steps to reduce the Group’s debt and reach a more appropriate capital structure over time. The Group will also undertake a strategic review.

The Group will announce its preliminary results for the twelve months ended 30 September 2011 during the week commencing 12 December 2011.

Sam Weihagen, Group Chief Executive, Thomas Cook Group plc said:
“I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly. Over the last few days, we have been overwhelmed by the messages of support from our holidaymakers, suppliers and partners and I would like to thank them for their good wishes and our employees for their hard work and dedication. For over 170 years Thomas Cook has provided customers across the world with fantastic travel experiences. Today they can look forward confidently to holidays with us for many years to come.”
 

Aviador

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That's excellent news Lbaspotter. Let's hope they can make the necessary changes to ensure the long term success of the company.
 

channex 757

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Does anynoe know if anything is wrong with the a321 G-DHJH because it hasn't flown since the 5th January. Has it gone for a C-check or something like that?

I was just wondering because I have flown on this aircraft recently
 

Jordan-34092

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I Think Channex 757 that it will be having maintenance and checks done before the summer seasons begins and when the majority of aircraft will be needed, although i can't exactly state what checks could the aircraft be having done.
 

channex 757

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I Think Channex 757 that it will be having maintenance and checks done before the summer seasons begins and when the majority of aircraft will be needed, although i can't exactly state what checks could the aircraft be having done.
It could be seen as January is probably the quietest time of the year so it would be a time when the aircraft is least needed
 

lbaspotter

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I see Thomas Cook have been rasing yet more money by selling upto 17 aircraft (Boeing 757' & Boeing 767's) and then leasing them back.

Source: http://www.ttgdigital.com/news/cook-aircraft-sales-to-raise-1829m/4683970.article

Cook aircraft sales to raise £182.9m

Thomas Cook has agreed to sell or lease back 17 aircraft, which is expected to raise £182.9 million.

The company said it would sell and lease back 11 Boeing 757 aircraft with Guggenheim Aviation Partners and six Boeing 767 aircraft with Aircastle Advisor International Limited.

Guggenheim has also agreed in principle to enter a sale and leaseback agreement for a further two Boeing 767 aircraft.

Thomas Cook said it expected to raise £126.1 million from the sales to Guggenheim and £56.8 million for the sale of the six Boeing 767s to Aircastle.

All of the money from the aircraft sales will be retained by the company, which it said would “add to the group’s headroom of cash and available facilities”.

Sam Weihagen, chief executive of Thomas Cook Group plc, said: “Today’s announcement demonstrates the progress which we continue to make to strengthen the Group’s financial position, with the aircraft disposals providing substantial additional liquidity.

“As expected, the first half seasonal losses have widened however, summer bookings have improved in recent weeks.”

Thomas Cook has been disposing of assets in order to reduce its debt.

This has already seen it part with hotels in Europe and put its Thomas Cook India subsidiary up for sale.
 

Aviador

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[textarea]Thomas Cook sees losses widen as it struggles with debt

Thomas Cook has seen its half-year losses increase sharply after a "difficult" six months, but says it is taking "decisive action" to improve its position.

The travel group reported a pre-tax loss of £713m in the half year to 31 March, up from a £269m loss last year.

The company has struggled with high debt levels and the wider downturn in the global travel sector.

Earlier this month, Thomas Cook secured a £1.4bn refinancing package.

This deal gives the company a further three years to repay its debts.

Read more: http://www.bbc.co.uk/news/business-18246207[/textarea]

Another news source says the Thomas Cook brand was hit hard by the near-collapse of the company last year. This will have in turn have had a significant effect on the company's profitability during the last half year.
 

lbaspotter

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Thomas Cook has just dropped a major bomb shell for its staff based at its Bradford offices.

As Thomas Cook have just announced that it is to close its Bradford office by March next year. The site is staffed by more than 500 people and the company has said that 468 will potentially be affected, with 69 moving to a new site.

http://www.itv.com/news/calendar/update ... -bradford/
 

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