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Thomas Cook Contemplating Airline Division Sale

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LONDON – It has emerged over the weekend that Thomas Cook may sell the airline division of the group in order to raise cash following significant losses last year.

This has ultimately sent the group’s shares 12% higher as a result, which could suggest that a significant buyer is on the cards.

The group said that the heatwaves across Northern Europe removed a portion of booking, especially on last minute deals, meaning that up to two profit warnings had to be sent out as a result.

The Thomas Cook Group is valued at around £540 million but holds net debts of £1.6 billion.

This has meant the group stating that it will consider any options for the entirety of its airline division.

Peter Fankhauser, who is the Group CEO of Thomas Cook Group spoke to Reuters about the airline division itself.

“Thomas Cook doesn’t need to own an airline outright to be a successful holiday company,”

He added that a review into the sale of the airline division is happening at this moment in time and that the group will retain links to the carrier if a sale was to take place or not.

Whoever takes over the airline division will have access to the subsidiaries in the division, such as Condor in Germany and mainline Thomas Cook across Britain, Scandinavia and Spain alike.

The potential buyer will also have access to 103 aircraft from airports including Gatwick, Stansted, Manchester, Frankfurt and Munich alike.

The airline is quite a lucrative part of the airline division, especially as it posted an increase of operating profits in 2018 by 37% alone.

Fankhauser also said that the review was brought up at the Annual General Meeting with the outcome not known for another couple of months at least.

Market analysts are showing concern over this move and some are showing positivity.

It could be suggested that easyJet, Lufthansa, IAG or Ryanair could place an interest in the airline division, with Credit Suisse valuing the airline between £1.8 billion to £3.2 billion.

Other analysts are looking to recent bankruptcies across the European aviation industry.

2019 has already seen carriers such as Germania go under, and the fact that the Thomas Cook Airline Division has 103 aircraft, it could be suggested that carriers may go for the slots instead of the aircraft, putting at risk the lives of the aircraft into storage or returned to lessors etc.

In terms of outlook for the airline itself, it is not looking particularly good.

Tour operator bookings decreased by 12% for the Summer 2019 schedule, with consumer uncertainty such as the likes of BREXIT had hit confidence in the market.

Underlying losses for operations in the fourth quarter of 2018 expanded to £60 million from £3 million, but said that bank covenant tests have been met in order to continue such operations.

It will ultimately be interesting to see what direction the Group takes and who the potential buyers could be.

Although Ryanair has been listed as a potential buyer, they may not focus on this sale as it has been busy dealing with the expansion of LaudaMotion, something it is now taking full stake in.

For IAG, it could be a hot contender, given the dropped interest in Norwegian, with Lufthansa and easyJet alike fighting over other carriers too.

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0-Feb-2019 11:09 PM

First Quarter Trading Statement 2019

Announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014

First Quarter Trading Statement for the three months ended 31 December 2018

2018/19 started in line with expectations; strategic review of airline announced


First quarter revenue up 1% to £1,656 million2

Q1 underlying operating loss increased by £14 million to £60 million against a strong prior-year period – loss from operations on a reported basis increased £7 million reflecting lower separately disclosed items

Strategic review of Group Airline to increase financial flexibility and accelerate execution of our core strategy

1. Comments are based on like-for-like comparisons

2. Includes adjustment for IFRS 15 accounting change for Group Airline and residual amounts relating to the transfer of the Thomas Cook Airlines Belgium to Brussels Airlines and as such is no longer part of the Group

Peter Fankhauser, Chief Executive of Thomas Cook commented:

“As expected, the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun. Where Summer 2018 bookings started very strongly, bookings for Summer 2019 reflect some consumer uncertainty, particularly in the UK, and our decision to reduce capacity which will both mitigate risk in our tour operator business and help our airline to consolidate the strong growth achieved last year.

“We’ve made further good progress in transforming our business with a rigorous focus on managing our cost base while innovating to deliver high-quality holidays for our customers. Our strategic alliance with Expedia is now live in all our key markets. In addition, we are set to open 20 new own brand hotels this summer, including three Casa Cooks and eight Cook’s Clubs, and have announced two new hotel projects with Fosun in China.

“At the same time, we recognise that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business. As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course.”


Group revenue was broadly unchanged in the first quarter, rising by 1% on a like-for-like basis to £1,656 million, led by strong customer demand for Turkey and North African destinations, offsetting weaker demand for Spain.

Gross margins were lower, reflecting a continuation of the highly competitive market conditions in the UK at the end of the summer season, and weaker demand for winter holidays in the Nordics.

As a result, the Group’s seasonal underlying loss from operations increased by £14 million on a like-for-like basis to £60 million. Currency translation movements during the quarter led to an impact of £4 million. On a reported basis, our loss from operations increased by £7 million, reflecting an improvement in separately disclosed items. The seasonal loss was led by the Group Tour Operator where a weaker performance in the UK and Northern Europe was partially offset by a good performance in Continental Europe. Our Group Airline continued to perform well, delivering a seasonal underlying loss in line with a strong comparative period last year.

Financial position

Net debt at 31 December 2018 was £1,588 million. The Group has kept a healthy level of liquidity headroom over the important winter cash low period, maintaining a minimum buffer within our targeted range of £150 million to £200 million. In addition, our bank covenant tests as at 31 December 2018 were met.


Winter 2018/19

Trading for the Winter 2018/19 season is largely unchanged from the last update. Total bookings are up 8%, supported by higher volumes in the Group Airline as a result of the full season impact of extra aircraft acquired last spring. We continue to see strong demand for Turkey, Egypt and Tunisia as customers seek alternatives to high hotel prices in the Canary Islands. However, average selling prices are 10% lower overall, reflecting a higher mix of short and medium-haul airline volumes.

Group Tour Operator bookings are down 2%, with pricing 3% lower. Bookings from the Nordics and Continental Europe are lower than last year, in line with reductions in capacity. In the UK, charter risk bookings are in line with last year.

For the Group Airline, overall bookings are 8% ahead, in line with capacity increases. Bookings to short and medium-haul destinations are up by 10%, largely as a result of a growth in demand for Egypt. Long-haul bookings are up 3% with good demand for USA and Caribbean. Overall airline pricing is down 3% due to the mix effect of a shift towards short and medium-haul flying.

Summer 2019

Our Summer 2019 programme is 30% sold, slightly ahead of last year. Group Tour Operator bookings are consistent with the capacity reductions we have made across our markets to closely manage our risk capacity throughout the year. As a result, tour operator bookings are down 12%, helping to support pricing, which is up in all key segments, and 4% higher overall.

Group Airline bookings are below last year, as we have selectively reduced capacity in short and medium-haul destinations by taking in less wet-lease capacity. This is partially offset by good growth in demand to long-haul destinations. Average selling prices are up 6%, with higher yields in both short and medium-haul and long-haul.


We are addressing some of the challenges we faced in Summer 2018 by reducing our committed airline capacity for 2019 and increasing the focus on high quality, higher-margin hotels and destinations. In addition, we continue rigorously to drive down costs to give us greater operational flexibility, while remaining fully focused on our strategy, and managing our financial and commercial commitments.

We are making no changes to the full-year expectations set out in November 2018, reflecting the early stage in the year and limited visibility due to wider market uncertainty, particularly in the UK.


Thomas Cook Group has undergone significant transformation over the last five years as we have streamlined our operations and focused on a clear strategy in both our Airline and Tour Operator businesses.

However, it is clear that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business. As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course.

Our strategy for the airline has been to profitably grow as a leading European leisure airline with a reliable, customer-focused service. This has involved a continuous review of our cost structure in order to stay competitive in a highly fragmented market. We currently operate a fleet of 103 aircraft, of which a quarter serve long-haul destinations. Our Group Airline delivered strong growth in 2018, despite facing industry-wide disruption. We made good progress in strengthening our seat-only offer, and growing services to third-party tour operators. We carried over 20 million passengers and generated £3.5 billion in revenue, with underlying operating profits growing 37% year-on-year to £129 million.


A conference call and webcast for investors and analysts will be held today at 08.30 (GMT):

Standard International Access: +44 (0) 20 3003 2666

UK Toll Free: 0808 109 0700

Password: Thomas Cook

This press release was sourced from Thomas Cook Group on 06-Feb-2019.

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A Condor já estava nos olhos da Lufthansa em 2017/18 mas com a aquisição parcial da Air Berlin os órgãos anti-Trust não aprovariam a compra dessa filial britânica,mas quiçá as demais filiais sim

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Viajei de Condor, um verdadeiro pau de arara voador. A iluminação da fileira de assentos do meio tava em curto e passou toda a madrugada piscando, parecendo luz estroboscópica.

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  • 5 months later...
China's Fosun considers $940m rescue for Thomas Cook

Club Med operator thinks it can revamp iconic British tour company

ERI SUGIURA, Nikkei staff writer

JULY 12, 2019 19:20 JST

TOKYO - China's Fosun Tourism Group is considering a combined 750 million-pound ($940 million) bailout for British global travel company Thomas Cook.

The travel arm of Chinese conglomerate Fosun International, which also owns the Club Med resort franchise, said Friday that it had received a proposal made by Thomas Cook in relation to a potential recapitalization and separation of the 178-year-old travel company.

The deal to convert Thomas Cook's external bank and bond debt into equity would see Fosun take a "significant controlling stake" in the iconic British company's tour business and a "significant minority interest" in its airline business, the company said in a statement.

Already Thomas Cook's largest shareholder with an 18% stake, the Fosun deal would significantly dilute the holdings of other existing shareholders. Final details are yet to be disclosed, with advanced discussions between Fosun, Thomas Cook and its banks still ongoing.

"While this is not the outcome any of us wanted for our shareholders, this proposal is a pragmatic and responsible solution," Thomas Cook Chief Executive Officer Peter Fankhauser said in a statement.

Thomas Cook has suffered at the hands of surging online travel agencies and low cost airlines, reporting a pre-tax loss of 1.5 billion pounds in May. The company has issued three profit warnings over the past year.

In May, Citigroup analysts said there was no longer any equity value in the travel company, after having accumulated debt equal to the combined value of its tour operations and airline business.

Fosun, on the other hand, sees Thomas Cook as a potentially valuable addition to its China operations, which could be revamped in the same way it breathed new life into Club Med after acquiring the ailing resort franchise in 2015 for 939 million euros ($1.1 billion).

"Thomas Cook is a well-known brand, and has a lot of resources in Europe, which have made very good synergies so far," Jim Qian, Fosun Tourism's chairman and CEO, told Nikkei Asian Review in May.

"Europe has been through many challenges, including financial crisis in 2008 and Brexit," said Qian. "But for us, we believe Europe is the world's largest leisure holiday market so it is interesting for us to know their business."

Fosun and Thomas Cook jointly founded Thomas Cook China in 2016, focusing on China's growing outbound and inbound travel markets. Thomas Cook China will also operate Thomas Cook-branded hotels in Fosun's developing China resorts portfolio.

In 2017, the two companies also jointly established a tour operator business for Chinese vacationers.

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Espero que saia, pelo menos com o Club Med eles pegaram a rede caindo literalmente aos pedaços e conseguiram fazer milagre! Resultados excelentes em 2018, retorno à bolsa e expansão agressiva programada para os próximos anos.



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