Reporting on underlying earnings for the year to September, U.K. travel giant Thomas Cook has reported a 40% plummet in earnings as it struggled to cope with a ‘challenging market and weakness of the devalued pound. Earnings at £56 million (US$73 million) were down from £86 million (US$114 million) for the same period in 2016, with rising hotel prices and intense competition in the Spanish market also to blame, the latter being partly responsible for the demise of the smaller carrier, Monarch Airlines, in October, and resulting in leaving its profit margins 1.3 percentage points lower at 22.1%.
The Group also cited the dramatic rise in fraudulent illness claims and support offered to 10,000 customers who had been affected by the hugely destructive Hurricane Irma. Shares in the Group fell 13% after the results were announced.
On a more positive note, the Group confirmed it has launched action to return its UK division to profitable growth once more by slashing costs, taking legal action against illness fraudsters, and focusing on the fast-growing holiday destinations of Turkey and Egypt. Since the drop of popularity on these two destinations after the bombing of a plane out of Sharm el-Sheikh in Egypt and the attempted coup followed by terrorist attacks in Turkey, bookings for these destinations, which are more-profitable, had increased noticeably, contributing to a rise of 5% in the carrier’s overall bookings, and a 1% rise in U.K. bookings.
Thomas Cook Group Airlines, part of Thomas Cook Group, is one of Europe’s leading airlines, and comprises three sun- and beach-focused leisure airlines: Thomas Cook Airlines UK, Thomas Cook Airlines Scandinavia and Condor. In spring 2018 Thomas Cook Airlines Balearics will join the group in Palma de Majorca.
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