More Financial Troubles Ahead for Thomas Cook?

Thomas Cook Group plc, a UK-based travel company, may be in more financial difficulty following reports that France-based credit insurance company, Euler Hermes, has withdrawn credit insurance cover for the company’s third-party suppliers.

While Euler Hermes maintains insurance cover to some of Thomas Cook suppliers, it has written to several suppliers to inform them of its intention to cease their indemnity. In a statement, Euler Hermes has cleared its position by saying, ‘(it) continues to write significant levels of cover for Thomas Cook and other major operators within the travel industry.

It is never in a credit insurer’s interests to see a company fail, and we closely monitor the performance of all companies to help us protect our policyholders within the supply chain.

It is not unusual for levels of cover to be reviewed, upward as well as downward, as our assessment of risk evolves. We enjoy a healthy and constructive dialogue with Thomas Cook’s senior management and advisers and continue to review all information about its current and future position.’

Thomas Cook, in a statement, has expressed its awareness of the Euler Hermes decision, and said, ‘This has zero impact on Thomas Cook customers. We confirm that no product has been removed from sale and no supplier has stopped trading with us.

We are a large group. This would affect only a very limited number of third-party travel providers to Thomas Cook in the UK.’

The company’s stock price has fallen following the Euler Hermes decision, and the beleaguered company is in talks for a two-year extension of its debt facilities, and an additional £1.2bn credit expansion.

The company statement reads, ‘Thomas Cook Group plc confirms that it is in advanced discussions with its banking group about extending its financing arrangements. In addition to the revised financing arrangements, the previously announced asset disposal programme and the sale of Thomas Cook India, the Group is exploring a possible sale and leaseback of certain aircraft.’

Thomas Cook to expand into the Middle East

Debt hit UK tour operator Thomas Cook plans to expand it’s brand across the Middle East next year, bidding to be the second largest tour operator in the Middle East

Al Futtaim Travel confirmed that they will launch Thomas Cook Holiday shops in Dubai as well as on line booking channels and expand the operation over the Arabian peninsular over the next three years.

Samantha Watson, marketing and sales manager, Al-Futtaim Travel said Thomas Cook would become a serious contender in the market to Emirates Holidays – the tour operating arm of Emirates Airlines.

The news comes as Thomas Cook confirmed it is to close 200 – or almost one in six of its 1,300 travel agents in Britain, resulting in up to 1,000 job loses as part of a cost-saving UK restructure plan.

The embattled tour operator was forced to arrange a £200million credit facility with 17 bank lenders as it seeks to recover from an annual net loss of £521 million.

Watson said Middle East consumers would still have confidence in the Thomas Cook brand despite the company’s recent financial troubles taking into account that Thomas Cook’s 150-year history has weathered many economic global crisis.

Thomas Cook blamed poor sales on a series of unforeseen events such as the Icelandic volcanic ash cloud and uprisings in the Arab world. The tour operator said it plans to ramp up holiday packages to the UAE in 2012 in an attempt to offset losses caused by political unrest in the region.

Thomas Cook reassures customers after bank bail out deal

Troubled holiday firm Thomas Cook have reassured customers that their holidays are in ‘safe hands’ following news of an extra £100million lifeline loan from its banks last week.

 

The firm however may still be axing 200 of its 1,100 UK shops and slash 1,000 jobs in a bid to cut its huge debt.

 

This week the company launched a publicity drive after negative headlines may have stopped holidaymakers from booking with the firm.

 

UK bookings plunged by 30 per cent last week following fears over the group’s future.

 

Sam Weihagen the interim chief executive for Thomas Cook will publish a letter in national newspapers telling potential customers it’s safe to book holidays with them.

 

The letter will begin: “What a week it has been for Thomas Cook”, adding that it is now “an even stronger and confident company” and customers “can be sure that your holiday really is in safe hands”.

 

He claims the company is the “recognised and established name in the industry”, and his words play on the 170-year-old company’s history.

 

Last week the company’s share price dropped by a staggering 75 per cent following fears of a possible collapse.

 

However company shares rose by 30 per cent yesterday after the announcement of an extra £100million lifeline given to them by their banks Friday night.

 

The company’s group of banks approved the £200 million funding plan, which includes: Barclays, HSBC, RBS and UniCredit, which like last until April 30 2013.

 

This will replace the short-term facility of £100 million, which was announced on October 21 2011.

 

Mr Weihagen announced that new management had been put in place in the UK, where trade has been suffering.

 

“The UK business this year has not really performed as good as we had hoped and not as good as competitors have performed and that was a management issue so we have replaced the management team in the UK and started a turnaround plan”.
He added “I’m very confident that plan will make sure our UK businesses will return to a much better profitability over time”.

 

Article by Charlotte Greenhalgh

Financial crisis for tour operator Thomas Cook

British tour operator Thomas Cook is struggling for survival after the number of bookings had fallen and fears the company are having difficultly repaying bank loans of £1billion.

 

Yesterday shares in the German-owned company slumped by 75 per cent after the company revealed they were seeking new agreements with its creditors.

 

Three profit warnings were issued earlier this year after the company revealed bookings were down.

 

In the past year the firm sold 22million trips to families in Britain and 20 other countries.

 

Yesterday executives insisted that trading would continue and there is no danger to its customer’s holidays or travel plans.

 

James Hollins, an analyst as investment bank Evolution Securities said, “Legitimate questions will be asked as to whether Thomas Cook can survive long-term”.

 

In cost cutting measures bosses plan to close more than 200 of its travel agent outlets on high streets, axing thousands of jobs.

 

In the summer the company – Europe’s second biggest tour operator – parted company with chief executive Manny Fontenla-Novoa.

 

Sam Weihagen the new interim chief executive said that trading had declined in the recent months, with bookings for the winter and next summer being poor.

 

The chief executive blamed the lack of bookings on the Eurozone crisis, which has resulted in financial turmoil, meaning families have cut on luxuries including foreign holidays.

 

Mr Weihagen said the company is a “robust business that has a great future”. This is following the collapse in share price, which since January is down 93 per cent.

 

He insisted the company had not fallen behind with bank repayment and the talks with its lenders were an act of ‘prudence’.

 

Travel industry trade body ABTA reassured Thomas Cook customers that flights and package holidays sold by the firm were protected.

 

 

Victoria Bacon, a spokesman for the company said, “the key thing is that anyone who has booked a holiday with them is protected. People can go ahead and book as normal”.

 

Article by Charlotte Greenhalgh

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thomas Cook Guarantee Seats at the London 2012 Games

With London 2012 fans now knowing if they’ve been successful in the ticket ballot, Thomas Cook, the travel company that offers holidays worldwide and Official Short Break Provider of the London 2012 Olympic and Paralympic Games, continues to offer guaranteed seats at the Games.

A spokesperson for Thomas Cook UK & Ireland said, “Last week was our busiest so far – with people unlucky in the ballot visiting our website, calling our hotline and visiting our stores to secure themselves a seat at the Games.

“Although some events are selling out we still have limited availability in some of the most popular sports that have been oversubscribed in the ballot, as we continue to guarantee the public tickets and hotel rooms to this once in a lifetime event that simply aren’t available to purchase separately.”

To date, Thomas Cook’s most popular breaks are for one night with one or two events with the most popular sports being athletics, gymnastics, volleyball, and water polo.

Thomas Cook’s Games Break Plus option, which guarantees some of the best events tickets available, includes stays at London’s top hotels – many of which are not yet available to book separately for July or August 2012 – and a host of exclusive offerings, such as a fully hosted service, meals at quality London restaurants and private coach transfers.

For further information or to book any of the below breaks:www.thomascook2012.com or Going Places store:

Beach Volleyball – £99 per person27th July 20121 night at the 2 star Ibis London HeathrowBeach Volleyball – Cat E tickets Shooting & Hockey – £249 per person29th July 20122 nights at the Budget Travelodge Covent GardenMen’s Shooting Ground Pass – Cat A Tickets & Men’s Hockey Cat D tickets Basketball & Trampoline Final – £279 per person2nd August 20122 nights at the Budget Travelodge SouthwarkMen’s Basketball – Category D tickets, Men’s Gymnastics Trampoline Final – Category E tickets Athletics & Volleyball – £294 per person8th August 20121 night at the 4 star Holiday Inn Heathrow M4Athletics & Men’s Volleyball Quarter Final – Both Cat D Tickets Diving – £299 per person10th August 20121 night at the 4 star Holiday Inn Heathrow M4Men’s 10m Diving Platform Prelims – Cat C Tickets – Code 1135 Water Polo & Beach Volleyball – £359 per person29th July 20122 nights at the 3 star Express by Holiday Inn Park RoyalMen’s Water Polo & Beach Volleyball – Cat C Tickets Athletics & Beach Volleyball – £669 per person2nd August 20122 nights at the 4 star Marriott Marble ArchAthletics – Cat B Tickets, Beach Volleyball Round 16 – Cat B Tickets

 

Brits stay at home forcing Thomas Cook to cut holidays

Brits are postponing booking their annual holidays because worries over the state of the economy, travel giants Thomas Cook have revealed. The holiday group have therefore cut the amount of holidays on offer this year, a move it can make without loss as it is not a big owner of aircraft or hotels in the UK.

A swift u-turn since February when they announced that they would in fact be increasing holidays on offer by three percent, not shrinking by one per cent. The firm said that compared to other European holiday markets, the rate of bookings by Britons has noticeably declined due to the growing economic uncertainty in the country.

Thomas Cook chief executive Manny Fontenla-Novoa confirmed that while strong growth with the company’s German airline and tour operator had been seen for summer holiday bookings this year, the same could not be said for the UK market. He predicted that the decrease in spending is a result of ‘fragile consumer sentiment.’

Cumulative bookings were reported to have made a six per cent jump in early February, but are now only one percent up on this time last year. Average prices are, however, still up four percent.

Fontenla-Novoa also said that the capacity cut backs were partly due to a proposed merger of Thomas Cook with the Co-operative Group travel agents. The deal has currently been delayed while it is referred to the Competition Commission.