Thomas Cook considers selling airline to raise cash sending its share price higher
The travel company may sell its airline to increase capital and accelerate its core strategy to drive growth, with the news helping its share price soar more than 12% on Thursday.
Thomas Cook Group will conduct a strategic review of its airline business, with it considering selling the unit to raise funds to execute its core growth strategy that aims to address losses the travel company sustained in 2018.
The news helped its share price rise more than 12% on Thursday.
‘We recognise that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business,’ Thomas Cook CEO Peter Fankhauser said.
‘As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course.’
Thomas Cook Q1 results: key figures
Despite the Thomas Cook seeing its revenues increase 1% to £1.66 billion in Q1 2019, the company also saw an increase in its operating losses by £14 million to £60 million, with the prolonged summer heat wave and high prices in the Canaries hurting customer demand for winter sun.
‘Where Summer 2018 bookings started very strongly, bookings for Summer 2019 reflect some consumer uncertainty, particularly in the UK, and our decision to reduce capacity which will both mitigate risk in our tour operator business and help our airline to consolidate the strong growth achieved last year,’ Fankhauser said.
Thomas Cook intensifies strategic focus
The company’s willingness to sell its airline business reflects its commitment to its core growth strategy, with Thomas Cook eager to learn recoup losses it sustained last year in what was a challenging 12 months trading.
‘We’ve made further good progress in transforming our business with a rigorous focus on managing our cost base while innovating to deliver high-quality holidays for our customers. Our strategic alliance with Expedia is now live in all our key markets,’ Fankhauser said.
‘In addition, we are set to open 20 new own brand hotels this summer, including three Casa Cooks and eight Cook’s Clubs, and have announced two new hotel projects with Fosun in China.’
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