Travel trauma

Thomas Cook, Europe's No. 2 tour operator behind German travel giant TUI announced that it was postponing publication of its full-year figures “as a result of deterioration of trading in some of areas of the business and of its cash and liquidity position since its year end.” Its annual earnings report was due out on Thursday.

The company has suffered a disastrous year, leading to the resignation of its chief executive, Manny Fontenla-Novoa, in August.

The profit warning sent the company's stock price into the cellar, with shares down 75 percent to 10.10 pence ($0.16, 0.12 euros) in early afternoon trading on the London Stock Exchange. Just over four months ago, shares of Thomas Cook were trading at 134 pence.

“Legitimate questions will be asked as to whether Thomas Cook can survive long-term,” said James Hollins, an analyst at Evolution Securities.

Wyn Ellis of Numis Securities said “Thomas Cook faces a difficult near-term future and a significant loss of market share.”

Trouble in Tunisia, Egypt, Thailand and Russia

Cook has lost bookings due to the unrest in Tunisia and Egypt, and flooding in Thailand. Disappointing sales in Russia have also added to the pressure on the company, which is again seeking new agreements with its main creditors just a few weeks after announcing that it had negotiated new funding arrangements to carry it through the slow winter months.

Interim chief executive, Sam Weihagen, insisted that the company was “a robust business with a great future. We are operating business as usual. Flights are leaving on schedule, shops are open and we're taking bookings.”

The company takes its name from a cabinetmaker named Thomas Cook, who, in a flash of inspiration while walking to a temperance meeting in 1841, began chartering railway coaches to help promote abstinence from alcohol.

Author: Gregg Benzow (AP, AFP, Reuters)
Editor: Michael Lawton