Copied from the MyTravel Forum:
"Lufthansa expects Thomas Cook AG to report an FY net loss of up to €300m, admitting that the tour operator’s performance in the last quarter will not improve its Q3 numbers despite a lift in booking levels.
The airline, which owns 50% of Europe’s second largest tour operator, gave the warning in today’s Q3s, updating Thomas Cook’s Nov02-July03 figures issued in September.
Lufthansa, which devoted a single page in its 24-page release to Thomas Cook AG, says that for the first nine months of its year the tour operator recorded an EBIT loss of €296m, adding that ‘although the level of bookings has picked up over the past months the deficit recorded up to July cannot be neutralised before the end of the business year. We expect for the full business year a segment result (pro rata earnings after taxes and goodwill) at the present level’.
Late last week, Thomas Cook AG’s chief exec Stefan Pichler and CFO Norbert Kickum resigned. The previous day Thomas Cook’s other 50% owner, retailer Karstadt Quelle, issued a profits warning blaming losses at the tour operator for its failure to hit FY targets.
Coverage in the German nationals over the weekend suggested that Thomas Cook will have to make huge writedowns relating to not only its fleet of Condor aircraft but also its purchase of Thomas Cook UK. An un-named analyst told leading financial broadsheet Handlesblatt that the writedowns could run to ‘several hundred million euros’ while top-selling tabloid Das Bild valued the writedowns at €1bn.
Thomas Cook UK’s performance is not separated out from the AG’s in Lufthansa’s statement. Earlier this month UK and Ireland chief executive Manny Fontenla-Novoa said at the ABTA Convention that Thomas Cook UK would report its best ever financial performance.
Fontenla-Novoa was a last-minute replacement for former CEO Stefan Pichler at this year’s Captains of Industry lunch at World Travel Market.
Travel Weekly’s ‘WTM Daily’ reported that he admitted that Thomas Cook is paying ‘three or four times the current market rate’ on its aircraft leases.
Shorter leases are favoured by tour ops as it allows them to manage capacity more easily than if the planes are owned or on long-term leases. However, Lufthansa’s Q3s point out that Pichler and Kickum spent €54m on two Airbus A320s which replaced two leased aircraft.
German trade title FVW, reporting on Pichler’s resignation, said that Thomas Cook Airlines is oversized for the German market and that it still hasn’t found buyers for 13 B757s.
FVW also suggests that the introduction of an upmarket Thomas Cook tour operating brand in Germany brand led to the loss of 300,000 clients. Fontenla-Novoa, on the other hand, has said that the introduction of Thomas Cook as the umbrella brand had been well received in the UK and has helped the bottom line.
Thomas Cook AG’s results for the year to end-Oct03 will be issued at the start of March04. "
Does the Daily Mail know about this?????