Tunisia and Greece Hit Thomas Cook Profits

The Tunisian terror attack and concerns about the Greek economic crisis forced beleagured package holiday firm Thomas Cook to issue a profit warning yesterday.

Thomas Cook said it swung to an operating profit for the three months ended June 30, its fiscal third quarter, of 3 million pounds from a 50 million loss a year before, a 12th consecutive quarter of improved profitability, on revenue up 0.2 percent to 1.95 billion.

Chief executive Peter Frankhauser pointed to the evacuation of more than 15,000 holidaymakers from Tunisia and laying on special assistance teams.

Fankhauser said the company had learnt from the mistakes it made dealing with the parents of two children who died from carbon monoxide poisoning at a hotel in Corfu nine years ago. “I have every confidence that our progress will continue”.

However, now the financial fallout has also been examined, with Thomas Cook saying it had taken into account the impact of cancelled trips, rearranging the summer flying programme to alternative destinations and the cost of repatriating customers to the UK.

“However, although hard to assess at this stage, we believe that there may be some continued adverse impact on the group’s full year 2016 results, in the event that Foreign Office advice remains negative and demand does not return to former levels”.

Customer demand reduced during the period while it was uncertain whether Greece would remain in the Eurozone, the operator added. Although Thomas Cook had sold the holidays ahead of the crisis and bookings picked up once an agreement was reached, the events led to a higher level of discounting than anticipated.

Looking forward, Thomas Cook said summer 2015 is 78% sold, the same as this time past year.