Troubled tour operator Thomas Cook Group Plc (TCG.L,TCKGY.PK) said Wednesday it has experienced improvement in UK booking trends in the last few weeks, while Europe remains subdued. The travel firm continues to expect fiscal 2012 to be a challenging year, citing the economic backdrop and difficult trading environment particularly for winter.
Sam Weihagen, chief executive officer of the company said, "Trading across the Group has been stable since we last reported and in line with expectations. In the last few weeks we have seen an improvement in UK booking trends, helped by our recently launched advertising campaign and upgrades to our thomascook.com website."
Providing an update on bookings, the company said the winter season overall remains subdued, but bookings have improved in recent weeks. However, for summer, bookings are tracking capacity in the UK and in Central Europe, despite the difficult market backdrop, it noted.
Last November, Thomas Cook shares lost 75 percent of their value on a single day after the company said it will seek lenders to rescue it from the financial turmoil it suffered due to slow holiday period and continuing economic worries.
Last month, the company launched a sale process of its Indian subsidiary. "We have seen a good level of interest and the disposal process is progressing well," it said today.
There were reports last week that the company is getting interest from buyout firms including Carlyle Group LP and KKR & Co. (KKR) for its Indian currency-exchange business. As many as 10 bidders are reportedly vying for the unit, which has a market value of 167 million pounds.
Detailing its winter booking trends, the tour operator said cumulative bookings declined 4 percent from last year in the UK. It noted that the UK programme is currently 91 percent booked overall, which is broadly in line with last year. Overall pricing has remained stable.
In Central Europe, cumulative bookings were down 3 percent, while average selling prices increased 3 percent. The company continues to see stronger demand for car holidays and dynamic packages, offsetting pressure in short haul business.
In West & East Europe, cumulative bookings decreased 18 percent and average selling prices improved 4 percent. In Northern Europe and Airlines Germany, cumulative bookings grew 10 and 20 percent, respectively, with a 5 percent drop in average selling prices.
According to the company, Northern Europe margins are weaker due to lower average selling prices and higher costs, particularly fuel costs. Northern Europe winter season is from October to March.
North America's yields in the year have been poor due to overcapacity in the market and mild weather, the company added.
Updating on summer trends, the company said bookings are tracking capacity in the UK and in Central Europe, despite the difficult market backdrop. Overall, UK bookings are 2 percent behind prior year. Central Europe bookings are in line with planned capacity, and average selling price increased 1 percent.
Meanwhile, summer bookings are slower than expected in Northern Europe and West & East Europe, where the company is likely to reduce capacity depending on the demand. West & East Europe cumulative bookings declined 11 percent and Northern Europe bookings were down 13 percent.
TCG.L is currently trading at 24 pence, up 0.75 pence or 3.23 percent, on a volume of 8.14 million shares on the LSE.
by RTT Staff Writer
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