The troubled holiday firm Thomas Cook is trying to revive its dire trading with a price promotion that offers £170 off any summer holiday for UK consumers, following a rescue deal with its banks at the weekend.
The £200m loan sent shares in the tour operator soaring by 3.7p, or 21 per cent, to 21.73p yesterday – more than double its closing price of 10.2p last Tuesday. On that day, its shares crashed by 75 per cent after Thomas Cook – which has £900m of debt – warned it needed more money from its banks to help it through its seasonal low point for cash levels.
But yesterday the debt-laden holiday company launched an aggressive price promotion, which played on the fact it was founded in 1841.
In its travel shops, the advertisement said: "We've been delivering great holidays for 170 years – 2012 will be no different. Guaranteed: £170 off any of our summer 2012 holidays." However, customers must spend a minimum of £1,200 by 2 December to qualify.
The move is an attempt by Thomas Cook to boost flagging sales and reassure customers, who may have been worried about its financial position and therefore making reservations.
The promotion is also a response to the one launched by Tui, its biggest rival and the owner of Thomson, last week. Tui's advertisement said: "You can smile with Thomson because you're in safe hands. Another holiday company may be experiencing turbulence, but we're in really great shape."
Thomas Cook will unveil a radical restructuring in its full-year results in two weeks' time. This is expected to include exiting 200 of its 1,100 high-street travel shops, which will lead to job losses of at least 1,100.