Thomas Cook makes a profit for the first time in five years

Thomas Cook has made a post-tax profit for the first time in five years, despite a £754 million drop in revenue.

“Despite turbulence in some of our destinations, the underlying business performed in line with our plans at the start of the year, demonstrating its greater resilience”, Chief Executive Officer Peter Fankhauser said in the statement.

The group posted profits after tax of £19m for the year to September 30, its first positive profit after tax since 2010, while underlying earnings rose 11% to £310 million. Thomas Cook has also suspended flights to Sharm el Sheikh in Egypt, along with other operators, after the downing of a Russian jet from the resort was blamed on a bomb. The company expects to return to dividend payments in 2017.

Thomas Cook has reported its first annual profit for five years.

Holidays from Britain to Tunisia had already been halted after the death of 38 holidaymakers in a massacre on a beach in June.

Four years ago, the 174-year-old company, which employs 1,300 people in Peterborough, had to be bailed out by lenders to the tune of £1 billion. Overall the company said that business has continued to grow with demand for their differentiated holidays increasing and it is confident on delivering its expectations for the current year. In early November we suspended our United Kingdom flying programme to Sharm el-Sheikh airport in Egypt following UK Foreign Office advice, and subsequently repatriated approximately 1,700 guests.

The travel company was forced to apologise last week over its handling of the case of Christi and Bobby Shepherd, who died from carbon monoxide poisoning on a Thomas Cook-arranged holiday in 2006.

That contrasted with a net loss of £118 million in the group’s previous financial year. I am clear that we need to learn from the tragedy and do things differently in the future.

As part of its efforts to refocus on customers, the group is this month rolling out the launch of a 24-hour satisfaction promise for key hotels, with front line staff given greater powers to resolve complaints on the ground.

But Thomas Cook said bookings in the new financial year had got “off to a good start” with “encouraging trading” for both winter 2015-16 and summer 2016.

“Customers are shocked about these incidents [terror attacks] of course and then we have a decline in bookings… but past experience shows that customer confidence is coming back quite quickly”, Mr. Fankhauser told reporters on a conference call.