The unexpected consequence of the heat wave on Thomas Cook

Business

British tour operator Thomas Cook announced Thursday that it had fallen into the red in 2017-2018, citing a lower demand for southern vacations due to a summer heat wave in Europe.

In its annual financial year ending in late September, the group deplored a net loss of 163 million pounds (184 million euros), against a slight net profit of 10 million pounds the previous year, according to data. recalculated published in a press release.

"2018 was a disappointing year for Thomas Cook, despite significant progress being made in our model transformation strategy, and after a good start to the year, we experienced a decline in our margins as a result of a prolonged summer heat in our main markets, "said managing director Peter Fankhauser.

The tour operator, founded in 1841, sells vacations in southern countries, especially to customers in northern Europe – the United Kingdom, Germany and Scandinavia. The hot summer in these northern areas pushed potential tourists to stay at home rather than travel to the usual sunny destinations and this undermined the group's margins in fine.

Thomas Cook also put forward a higher tax score than the previous year to explain the deterioration in its bottom line.

However, he also mentioned a few positive points, including an increase in the popularity of destinations such as North Africa, Turkey and Greece, which offset lower revenues from Spain whose tourist appeal had soared. previous years.

Thomas Cook also highlighted the growth in the number of flights operated by the airlines – including the German Condor and the British Thomas Cook Airlines. Its aerial activities benefited from the bankruptcies of two companies competing last year, the German Air Berlin and the British Monarch, in a turbulent European aviation sector.

Its turnover, including all activities, rose by 6% to 9.584 billion pounds (10.8 billion euros).

The group has confirmed for the past year the suspension of the dividend usually paid to shareholders announced two days ago – at the price of a dip of more than 20% of its shares on the London Stock Exchange on Tuesday.

For the current fiscal year 2018-2019, Thomas Cook says he wants to continue his strategy to enhance its range of travel, both via its airlines and hotels it offers. It ensures that it can raise its operating profit, which has been cut by a good half in the past financial year.