Thomas Cook blames Brexit uncertainty as it announces £1.5bn loss

Shares in holiday giant slump by more than 17 per cent after results announced

Peter Stubley
Thursday 16 May 2019 08:42 BST
Thomas Cook puts in-house airline up for sale after increased losses

Thomas Cook blamed Brexit uncertainty as it announced a £1.5bn loss and confirmed that multiple bids had been made for its airline.

The tour operator claimed UK customers were delaying their holidays for the summer because of the political deadlock.

Last summer’s heatwave also reduced customer demand for winter sun and contributed to the “weak trading environment”, according to chief executive Peter Fankhauser.

Thomas Cook shares slumped more than 17 per cent after its results for the six months to 31 March were announced.

More than two-thirds of the pre-tax losses, £1.1bn, related to a revaluation of the company’s merger with MyTravel in 2007.

“The first six months of this year have been characterised by an uncertain consumer environment across all our markets,” said Mr Fankhauser.

“The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.”

The company said in a statement that “political uncertainty related to Brexit over recent months has led to softer demand for summer holidays across the industry.”

In February, the tour operator put its in-house airline up for sale after announcing first-quarter losses of £60m.

It has since received bids for all or part of the business, said Mr Fankhauser. “As we assess these bids, we will consider all options to enhance value to shareholders and intensify our strategic focus,” he added.

Thomas Cook, which employs 21,000 people, said it was making further “cost efficiencies” including the closure of 21 retail stores in the UK as it attempted to establish itself as major beach hotel company in Europe and expand into China and Russia

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Mr Fankhauser said: “It’s clear that the continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins.

“This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year.”

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