Thomas Cook plans publicity drive
Monday 28 November 2011
Ailing Thomas Cook will this week launch a publicity drive in a bid to reassure customers that their holidays are "in safe hands".
The holidays firm, which saw its share price slump by 75% in one day last week amid fears of an imminent collapse, will publish a letter from interim chief executive Sam Weihagen in national newspapers from tomorrow saying it is safe to book breaks with the group.
Thomas Cook's shares rose 30% today after it announced an extra £100 million lifeline from its banks on Friday night.
But although Thomas Cook claims it is now on a sound financial footing, fears persist that the negative headlines may have scared holidaymakers away from the company. Bookings fell 30% last week amid uncertainty over the group's future.
Rival TUI Travel has run full-page adverts for its Thomson brand that claimed: "Another holiday company may be experiencing turbulence, but we are in really great shape."
Mr Weihagen's letter will begin: "What a week it has been for Thomas Cook," adding that it is now "an even stronger and more confident company" and members of the public "can be sure that your holiday really is in safe hands".
His words will play on the 170-year-old company's history and will claim it is the "most recognised and established name in the industry".
The letter will add: "I have no doubt that we will still be in another 170 years and beyond."
The deal with its bankers, just one month after it increased its loans by a similar amount, came after it said its French and Belgium markets saw bookings fall by up to 20% in recent weeks, while a move into the Russian market had "got off to an extremely slow start".
The group has suffered from the impact of the Arab spring, which has hit bookings to Tunisia and Egypt, destinations popular with France and Russia respectively, as well as UK holidaymakers.
It is understood the firm could axe up to 1,000 jobs by closing 200 of its 1,100 UK travel shops as it slashes costs and sells hundreds of millions of pounds of assets to help reduce its debt mountain.
James Hollins, an analyst at Evolution Securities, said the new lending facility had secured its short-term survival.
He added: "The increased facility pushes current gross debt to £1.5 billion but fortunately all the bad press has come at a low point in the booking cycle and the group has the funds and time to restore partner and consumer confidence in its brand and survival."
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