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Brexit uncertainty weighing on travel industry, says Thomas Cook amid £1.5bn loss



Brexit uncertainty is dragging down the fortunes of the travel industry, according to the giant travel firm Thomas Cook.

Revealing sharply increased half-year losses, the company said: “In the UK, the political uncertainty related to Brexit over recent months has led to softer demand for summer holidays across the industry.”

The chief executive, Peter Fankhauser, said: “Since the announcement of a delay to Brexit, we have seen no material and real change to booking patterns.

“That is a cloud that is still above consumer confidence in the UK.”

Referring to the number of discounted holidays available, Mr Fankhauser said: “For the customer it is paradise.”

Thomas Cook lost almost £1,000 a minute selling holidays during the winter season. In the six months from October 2018 to March 2019, the underlying operating loss at the giant travel firm almost quadrupled from £65 million to £245 million.

The losses were hugely increased by a one-off £1.1bn write-down of goodwill from the balance sheet. It was related to goodwill acquired at the time of Thomas Cook’s merger with MyTravel in 2007.

The chief executive, Peter Fankhauser, said the intangible asset had been “re-valued in light of the weak trading environment”.

Mr Fankhauser said: “Our current trading position reflects a slower pace of bookings, against a strong first half in 2018, and our decision to reduce capacity in order to mitigate risk in the tour operator and allow our airline to consolidate the strong growth it achieved last year.”

Winter sales to Egypt were strong, at the expense of the Canary Islands.

Average selling prices for summer 2019 are up 2 per cent, with 57 per cent of the programme so far sold. In terms of booking numbers, Spain, the consistent favourite, is in first place. But Turkey has taken over second place from Greece.

“Turkey is back to normal,” said Mr Fankhauser. “What we see also as an upcoming destination is Tunisia.”

Following the terrorist attack in the resort of Sousse in 2015, which killed 38 people including 30 British holidaymakers, Tunisia was placed on the Foreign Office “no-go” list for over two years.

Thomas Cook returned to the north African country in February 2018.

At the end of October 2018, Thomas Cook closed its long-established Club 18-30 brand. Mr Fankhauser told The Independent: “I’m happy that we have a concept with Cook’s Club that the 18-35s want: great food, great entertainment, having a great offer in the bar.

“What they want is really different from what previous generation wanted.” 

Thomas Cook has put its airline up for sale, and says it is considering “multiple bids”.

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The chief executive said: “Outside of Europe, we have taken an important next step in the development of our China joint venture with the announcement of two new hotel projects in partnership with Fosun, including our first Casa Cook in Asia.”

Thomas Cook has closed 21 travel agencies in the UK and will consider the future of others.

The company archivist, Paul Smith, is leaving Thomas Cook at the end of June.



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