Thomas Cook: Travel 'in safe hands'
Sunday 27 November 2011
Ailing holiday giant Thomas Cook is hoping to see trade pick up this week after its short-term future was secured by a £200 million lifeline from lenders.
The debt-laden firm saw UK bookings plunge by 30% between Tuesday and Friday before it announced its banks had agreed to amend its existing credit agreement.
But Sam Weihagen, group chief executive, sought to reassure customers that their holidays were "in safe hands" with the company and insisted it would live on for at least another 170 years.
Giving a bullish assessment of Thomas Cook's prospects, he brushed off suggestions that the publicity surrounding its financial problems last week would dent consumer confidence and prompt holidaymakers to look elsewhere.
"Now, when we are able to announce we have even stronger financial security in place, I don't see any reason at all why they should stop booking with us," he said.
"I think customers have great support for us and great trust in what we're doing."
The multimillion pound facility - which the company arranged after being hit by a deterioration in trade - might even have been repaid in full by this time next year, he suggested.
He admitted, however, that it "may take two to three years to come to an acceptable profitability".
Asked whether the banks and their representatives would be playing an enhanced role in the company after agreeing to the financial package, he said they had not requested, and would not have, any participation in the board.
But there will be close contact with the lenders over the coming months, he said, with a strategic review to be presented "in due course".
He refused to be drawn on possible shop closures and speculation about thousands of job losses within the UK.
He said only that the firm was evaluating its shop estate and making sure "the shops we do have operating are profitable".
In the meantime, he added, new management had been put in place in the UK, where trade has been suffering.
"The UK business this year has not really performed as good as we had hoped and not as good as competitors have performed and that was a management issue so we have replaced the management in the UK and started a turnaround plan," he said.
"I'm very confident that plan will make sure our UK business will return to a much better profitability over time."
He stressed that in the rest of the group, outside the UK, the company had seen bookings remain level.
The £200 million funding headroom was approved by the company's syndicate of banks, which include Barclays, HSBC, RBS and UniCredit, and will last until April 30 2013.
It will replace the £100 million short-term facility announced on October 21 2011.
In an open letter yesterday, Mr Weihagen wrote: "You can be sure that your holiday really is in safe hands with us and so we look forward to welcoming you to one of our stores, our websites, on board our aircraft and into one of our many thousands of resorts worldwide very soon."
He went on: "Our customers have trusted Thomas Cook with their holidays and travel experiences for more than 170 years, so we know just how much they mean to you ...
"We feel proud and privileged to have been part of the Great British heritage for nearly two centuries and I have no doubt that we will still be in another 170 years and beyond."
The firm, which sells more than 22 million holidays a year in the UK, was hit by a slowdown in trade due to weak consumer confidence and unrest in North Africa.
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