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Winnipeg Free Press - PRINT EDITION

Travel firm's vacation hell

Stalwart British company suffers huge financial loss

By: Robert Barr

Posted: 11/23/2011 1:00 AM | Comments: 0 (including replies)

The Associated Press archives Thomas Cook�s woes may scare away travellers. (CP)

LONDON -- Industry analysts and anxious travellers expressed fears Tuesday for the survival of Britain's venerable tour operator Thomas Cook, after the company, which took more than 22 million people on holidays in the latest year, said its financial problems had worsened.

Shares in Europe's second-largest tour operator lost three-fourths of their already depressed value after the company said it was seeking new agreements with its main creditors, barely a month after announcing it had negotiated new funding arrangements to carry it through the slow winter months.

The company insisted flights would leave as usual and that it was taking new bookings, but Britons who have bought holidays through the firm were anxious.

In Canada, Halifax-based Jazz Aviation said it has launched its second season with Thomas Cook Canada earlier this month.

"From Jazz's perspective, it's business as usual," Jazz said in a statement.

Jazz Aviation has signed a five-year flight services agreement with Thomas Cook Canada to operate six Boeings 757-200 on their behalf to the Caribbean, Mexico and Central America. This winter season, Thomas Cook Canada will fly from Toronto, Calgary and Vancouver.

Several small British travel firms have gone under since the global economic crisis hit in 2008, but Thomas Cook is an industry giant, and a fixture of Britain's main streets.

Jamila Juma-Ware, 27, who has booked a holiday in Tenerife in the next three weeks for herself and her mother, said she is "praying it's going to be all right ... but I'm not confident."

"There are a lot of small independent travel agents around here, but I said I'd rather just book it through someone like Thomas Cook because they're big and there's more of a guarantee they won't go bust," Juma-Ware said. "And then this week this happens. "

Thomas Cook is, like many airlines and tour operators, suffering from weak consumer demand as Europe's financial crisis has people worried about their jobs.

Unrest in Tunisia -- normally the top winter destination for French travellers -- and Egypt, flooding in Bangkok and disappointing sales in Russia have all added to the pressure on the company.

Analysts said the financial troubles could scare away customers, darkening the firm's prospects.

"Legitimate questions will be asked as to whether Thomas Cook can survive long-term," said James Hollins, analyst at Evolution Securities. He added he believed the company could pull through on the strength of businesses outside Britain, but "a more flexible financial structure and massive turnaround are required."

-- The Associated Press

Republished from the Winnipeg Free Press print edition November 23, 2011 B7

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