Doubts grew over the survival of Britain's venerable tour operator Thomas Cook on Tuesday after the company, which took more than 22 million people on holidays in the latest year, revealed its financial problems had worsened.
Shares in Thomas Cook, 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 analysts note the financial troubles could scare away customers, darkening its prospects.
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 travelers and Egypt, flooding in Bangkok and disappointing sales in Russia have all added to the pressure on the company.
Thomas Cook Group shares were down 75 per cent at 10.10 pence in early afternoon trading in London.
Thomas Cook was due to report annual earnings for 2010-11 on Thursday, but it has put that off indefinitely as a result of deterioration of trading in some areas of the business, and of its cash and liquidity position since its year end. Sam Weihagen, Thomas Cook's interim Chief Executive, insisted it was business as usual. “Flights are leaving on schedule, shops are open and we're taking bookings.”
