Thomas Cook, the German-owned tour operator, yesterday ruled out a fire sale of its eponymous UK holiday company in response to its losses doubling last year.
The group, which sacked its chief executive, Stefan Pichler, in November, sought to dispel speculation that it planned to abandon the UK and French markets because it was struggling to cope with slack demand for package holidays. Wolfgang Besser, the chairman, said: "Significant changes in group structure are not on the agenda. We are not selling Thomas Cook UK. Nor will we be disposing of our activities in France, or any of the group's main other units."
Instead the group, which is jointly owned by Lufthansa and the German retailer, KarstadQuelle, hopes to build on recent signs that the market is picking up by slashing €150m (£101m) from its operating costs. It is axing 500 jobs in Germany - some 10 per cent of its German workforce - in an attempt to save €50m.
Mr Besser said bookings with Thomas Cook operators in early March had risen by 3.7 per cent against the previous year, prompting him to declare "that demand has bottomed out". He predicted his group would outperform the anticipated 2 to 4 per cent growth in the European package-tours market, although it is not forecast to make a profit in 2004. Full-year losses in 2003 rose to €251m from €120m on sales down 10 per cent to €7.2bn.
Much of Mr Besser's optimism was pinned on the recent recovery in demand for holidays in Majorca, the group's most important destination. He said summer bookings for the island soared 15 per cent after falling for two years. "Majorca is well on the way to clearly becoming Europe's most popular holiday island again," he said, hailing its decision to scrap the unpopular "eco-tax", which made it harder to entice holidaymakers.