A combination of factors are dampening demand at the tour operator as consumers “sit on their hands”.
As its rival TUI reports that its margins are being hit by a continuation of the problems the tour operator sector saw in 2018, Thomas Cook has also warned that consumers are not booking holidays this year.
Like TUI, Cook is pointing to the ongoing impact of last year’s heatwave on the travel sector. But it is also blaming anxiety among consumers in the UK due to Brexit and the weak pound, Sky News reports.
As a consequence, the operator says it is considering selling off its fully owned airline business, Thomas Cook Airlines, as it looks for ways to increase resources to carry out broader restructuring.
Thomas Cook Airlines Scandinavia, Thomas Cook Airlines Belgium, Condor and Thomas Cook Airlines merged into a single operating segment of the Thomas Cook Group back in 2013.
Thomas Cook has already said it is cutting capacity, which it claims has helped stabilise prices for the summer ahead.
However, it is also taking a hit from falling demand for winter trips to sun and sea, which it blames partly on last summer’s record temperatures and also on high prices in the Canaries.
Chief executive Peter Fankhauser added: “Bookings for summer 2019 reflect some consumer uncertainty, particularly in the UK.” In addition, Cook faces “highly competitive market conditions”.
As one analyst tells Sky News, it appears that this combination of factors has dampened demand as consumers in northern Europe “sit on their hands” this year and wait before booking trips.
The company needs, in Fankhauser’s words, “greater flexibility and increased resources” to prepare for a transformation programme of cost-cutting and a focus on higher-quality holidays. A subsequent strategic review of its airline business is in its early stages.