Thomas Cook Group takes different route to rival TUI

Thomas Cook’s first-half results talk about its airline operations as a separate business unit, and claims that by carrying 17 million passengers a year it is one of Europe’s leading leisure airlines.

In the six months to end-March its airline – comprising Condor in Germany and Thomas Cook Airlines in the UK and Scandinavia – had a load factor of 88.6%. Airline revenues were up 3.4% to £1.2 billion but ended the half £16 million deeper in the red with an underlying EBIT loss of £82 million.

The earnings release noted that half of the airline passengers are flying on in-house tour operator package holidays, with the other seats sold to third party tour operators and via its own websites.

This is a strategic difference between it and rival TUI, which tends to use its fleet to fly its own tour operator passengers with very little non-TUI or seat-only business. However, this could change as TUI is currently in negotiations with Etihad to launch a dedicated low-cost airline for Germany.

In the presentation to analysts, a slide showed that the airline account for £45 million of the group’s £91 million capital expenditure during the half. IT accounted for £31 million.

Thomas Cook talks the talk in terms of its airline operations, with ancillary sales up by 14% in the half, thanks to “new systems [which] better integrate ancillary sales into the booking process… improving the way we present ancillary offers to customers.”

It is a bit more circumspect when talking about its overall online and digital footprint. The release says that online bookings in the half were up 15% in the UK and 35% in Germany.

A bit more detail came through in the Q&A with analysts. The “35% increase in Germany” comes from a low base, and the actual proportion of business in Germany transacted online is around 7%.  The UK is stronger, with around a third coming online. These percentages refer to package holidays sales and do not include its airline’s seat-only business.

Elsewhere, an update on Thomas Cook China, its joint venture with Fosun revealed that it has identified football as an inbound and outbound niche, “offering packages to watch European football teams playing at home, as well as inbound services to football clubs touring China for their summer pre-season.”

Click here for the earnings release.

Related reading from Tnooz:
TUI Group’s online business continues to mature, Germany catching up (May17)

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Martin Cowen

About the Writer :: Martin Cowen

Martin Cowen is contributing editor for Tnooz and is based in the UK. Besides reporting and editing, he also oversees our sponsored content initiative and works directly with clients to produce articles and reports.

For the past several years he has worked as a freelance writer, specialising in B2B distribution and technology.

Before freelancing, from 2000-2008, he was launch editor for e-tid.com, the first online-only B2B daily news service for the UK travel sector.

 

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