UK market now biggest contributor to Cook’s profits

The UK market has seen a remarkable turnaround and is now the largest contributor towards Thomas Cook’s profits, the tour operator revealed today.

Group chief executive Peter Fankhauser said growth in the UK reflects work to simplify its brands and invest in digital channels.

Cook has seen a three percentage point increase in the proportion of its sales on the web to 43%.

Asked if this is likely to breach the 50% mark, Fankhauser said: “That’s not something we can decide, that’s down to consumer demand and what the consumer wants to do.

“Our objective is to engage with the consumer wherever he wants to engage with us. We are ready to offer the best possibilities.”

Speaking to the media following this morning’s announcement of Cook’s full year trading, Fankhauser said the UK market’s performance “was no small achievement given it made nothing four years ago”.

Cook’s German tour operation was said to have delivered a “resilient” performance given  tough market conditions, but its German carrier Condor made no profit for the second year running.

“We have plans to address Condor’s performance,” said Fankhauser. “Condor was the market leader to Turkey.

“The shift in capacity caused major disruption together with weak demand meant we were having a tough year.”

Cook expects Condor to benefit from expected consolidation in the German aviation sector that might see less competition on mid-haul routes.

“I can hardly remember the last time Condor turned a loss,” said Fankhauser. “Our airline is an integral part of our offering.”

There has been speculation that Cook could merge its airlines, and while Fankhauser did not rule this out as a possibility for the future its plan is to make the carrier profitable in its own right.

Fankhauser said Turkey, where Cook had more capacity than any of its rivals, was 50% down year on year, forcing it to switch to the Spanish islands, Croatia, the US and Cuba.

A decision to pay a “modest dividend”, the first in five years, reflected the progress the company has made delivering on its strategy, added Fankhauser.

“It seems Thomas Cook has come a long way in the past 12 months delivering better holidays which is benefiting out financial performance.

“It’s early days but I am proud with the way our people have embraced the way we are putting the customer at our heart. I’m particularly proud of how we have made our holidays distinct from others.”

Fankhauser said 90% of guests opting for Cook’s new Casa Cook Bohemian hotel brand, one of six in-house brands, were new to the company. The year saw an 18% increase in own-brand hotel sales.

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