Thomas Cook puts airline up for sale

[ORAC]

https://www.independent.co.uk/travel/news-and-advice/thomas-cook-airline-sale-debt-brexit-losses-profit-peter-fankhauser-a8767126.html

[Livesinafield]

Unfortunatly its a sign of what is to come, a downturn, we had the mass expansion and now we are paying for it

[skydler]

The airline still made £129m profit last year. If TCG looking to sell it it's to save the wider Group businesses, not because it's also doomed.

[The Dragon Rapide]

As a Thomas Cook shareholder, I personally attended the Thomas Cook AGM in Aldersgate, City of London today.
Chairing the meeting was Thomas Cook Chaiman, Frank Meysman, and sitting to his right, was CEO Peter Frankhauser.
There were about another ten directors there, all totally mute. They may even have been shop front mannequins.
An underwhelming lot, as I have ever seen.
Questions from the shareholders were poorly answered...if at all...(come and talk to us later, outside, over coffee, etc).
One poor chap got shot down for asking three questions in one of 'The Board'.
The matter of the airline sale came up.
In view of how profitable the airline is, a value of just over £1 Billion has been put on it....which has caight the board's attention...given the precarious financial state of the rest of the company.
So a 'review' of the Airline's place is about to commence.
Let's watch and see what happens....
BRING BACK HARRIET, I SAY........

[Andy_S]

The airline still made £129m profit last year. If TCG looking to sell it it's to save the wider Group businesses, not because it's also doomed.

That's my understanding as well. The airline is profitable, it's the rest of the group that's struggling, specifically with a debt pile that's restricting it's ability to invest in the business.

[PA28161]

As already said, they have a massive debt pile of around 1.5 billion and a share price barely scraping 34p. The debt for TCG is greater than the value of the company and they need to build shareholder value and confidence. Like all hatchet jobs it's the profitable sectors of a company that get sold off, in this case the airline, although it has to be said that TCX did make a Q1 loss on like for like basis.
There are a lot of wasteful, money haemorrhaging practices in TCX that could have/should have been addressed earlier before the rot set in; for example the iniquitous 7/5 contracts. Paying pilots to stay at home for 5/12 for the first two years (those on NTR entry). I understand, however, that BALPA have challenged this issue and the period of 5/12 has been amended to one year for NTR pilots. (to sit at home and watch day time TV.)

[Asturias56]

Never understood that - selling the bits that are making cash to support the bits that aren't..........

Capitalism is about backing winners not losers IMHO

[TheEdge]

There are a lot of wasteful, money haemorrhaging practices in TCX that could have/should have been addressed earlier before the rot set in; for example the iniquitous 7/5 contracts. Paying pilots to stay at home for 5/12 for the first two years (those on NTR entry). I understand, however, that BALPA have challenged this issue and the period of 5/12 has been amended to one year for NTR pilots. (to sit at home and watch day time TV.)

Never understood how a Company, any Company, could maintain and allow for such a waste of money.

[Skyjob]

Never understood how a Company, any Company, could maintain and allow for such a waste of money.
It allows those in longer employment to earn more during times when flights are sparse and those who've only just joined to take the brunt of it.
Essentially it is all about keeping longer serving employees happier, LIFO principle works the same.
If redundancies are required, and they loose those last joined pilots, the ones that were joining just prior to them are now becoming couch potatoes. A very bad practice imho, instead better to share the lower work load keep everyone a little bit happy, rather then only those in longer employment.

[Mr Angry from Purley]

That's my understanding as well. The airline is profitable, it's the rest of the group that's struggling, specifically with a debt pile that's restricting it's ability to invest in the business.

As one bean counter said "left hand right hand" it's money from the same place....

[Wickerbill]

You are dead right, Angry, the airlines does OK because of the underpinning of business from the tour operations.

[Andy_S]

Never understood that - selling the bits that are making cash to support the bits that aren't..........

I think the idea is that by strengthening the balance sheet, the remainder of Thomas Cook will then be able to invest in the business rather than service the debt pile. I'm not saying it will work, but in business terms it does make sense.

You are dead right, Angry, the airlines does OK because of the underpinning of business from the tour operations.

The airline also carries passengers booked on other tour operators holidays.

[safelife]

Lufthansa seems interested in Condor’s long haul...

[beamer]

And there was I thinking that the airline was considered to be a necessary evil by management whilst the parent tour Company made the money which subsidised the airlines very existence - that was the clear message from the rival outfit that I used to work for.....

[Hotel Tango]

Lufthansa seems interested in Condor’s long haul...

Is this another one from your rumour mill safelife? ;)

[bumpy737]

Is this another one from your rumour mill safelife? ;)

https://www.sueddeutsche.de/wirtschaft/thomas-cook-verkauf-condor-lufthansa-1.4320431

Article in german, but LH is looking into it...

[SOPS]

Didn’t LH used to own Condor?

[His dudeness]

Yes, they did.

[SpringHeeledJack]

Ditto

https://airwaysmag.com/best-of-airways/condor-boeing-747s/

It wouldn't surprise me if a Far-Eastern or Middle-Eastern investor would step into the fray for the middle and short-haul operations.

[CargoOne]

Why would anyone buy TCX/Condor? There is no market space left to independent charter airlines.

[SOPS]

Thanks for that very interesting article 👍

[Kerosene Kraut]

Where would be the value of the airlines for a potential buyer without the tour operator providing the future passengers? The fleet looks to be aging, Brexit might cut a lot of the traffic rights and interoperability? They know to operate long range to remote places, that's certainly some capability not many others might have. But who will need that without the package passengers? And how will TC carry it's own customers in the future?

[RoyHudd]

Please be careful not to damage this airline's prospects. Although I mentioned that the A330 fleet is ageing, there is plenty of life left in their aircraft, and some very new A321's are included. The 3 country operation has an extensive scheduled route network (From MAN, the UK airline flies schedules to JFK, LAS, SFO, LAX, MCO, SEA, BOS, CUN, plus a host of Caribbean countries. And GOI. All schedules, not charters.

There are many good people working for this company, and they do not need to feel their livelihoods threatened by a host of ill-researched remarks on this thread by people who have little or no knowledge of aviation. And believe me, there are plenty of you out there!

[Kerosene Kraut]

I was thinking about Condor's 767 that are not exactly factory new anymore. And some company's sales perspective is certainly not formed by postings on bulletin boards.

[Andy_S]

But who will need that without the package passengers? And how will TC carry it's own customers in the future?

I think you might have answered your own question.

[763 jock]

Please be careful not to damage this airline's prospects. Although I mentioned that the A330 fleet is ageing, there is plenty of life left in their aircraft, and some very new A321's are included. The 3 country operation has an extensive scheduled route network (From MAN, the UK airline flies schedules to JFK, LAS, SFO, LAX, MCO, SEA, BOS, CUN, plus a host of Caribbean countries. And GOI. All schedules, not charters.

There are many good people working for this company, and they do not need to feel their livelihoods threatened by a host of ill-researched remarks on this thread by people who have little or no knowledge of aviation. And believe me, there are plenty of you out there!

Roy.

This place is a quiet backwater. The Thomas Cook forum might as well close. How this evolves will have nothing to do with any keyboard experts on Pprune.

Been here before with MYT and TCX.

[Max Angle]

and they do not need to feel their livelihoods threatened
Unfortunately their livelihoods ARE being threatened as I am sure they all too aware. Their employer is being put up for sale
in a cut throat market and it may well not be a happy result for some of them. Been there and got the t-shirt on that one, worked
out for me and most of the pilots but didn't for lots of the company's other staff.

[dirk85]

So who’s going to buy them?
VA (long haul) and Ezy (short haul)?

TCX slots are strategic.



The short haul fleet is way too old for easyJet to be interested, but the slots are in fact juicy.

[Asturias56]

Please be careful not to damage this airline's prospects. Although I mentioned that the A330 fleet is ageing, there is plenty of life left in their aircraft, and some very new A321's are included. The 3 country operation has an extensive scheduled route network (From MAN, the UK airline flies schedules to JFK, LAS, SFO, LAX, MCO, SEA, BOS, CUN, plus a host of Caribbean countries. And GOI. All schedules, not charters.

There are many good people working for this company, and they do not need to feel their livelihoods threatened by a host of ill-researched remarks on this thread by people who have little or no knowledge of aviation. And believe me, there are plenty of you out there!


Since just about every news paper, TV news and internet news in W Europe is carrying the news I don't think any comment on here will make the slightest difference to be honest

As ever it will be the accountants, the bankers and the financiers who will decide how this plays out and I suspect most of them wouldn't be able to tell an A380 from a Ju 52/3m

[oceancrosser]

Where would be the value of the airlines for a potential buyer without the tour operator providing the future passengers? The fleet looks to be aging, Brexit might cut a lot of the traffic rights and interoperability? They know to operate long range to remote places, that's certainly some capability not many others might have. But who will need that without the package passengers? And how will TC carry it's own customers in the future?

All valid points, this may not be the best of times for such a sale.

[WHBM]

Thomas Cook is an integrated organisation, of airline and holiday resort provision. How they divide up the revenue from an overall holiday between the different areas of the business is up to them. If they are minded to sell the airline part it looks good to divert the profitability in the accounts to that division.

Varying the dividing point between the different divisions of such an integrated business is not new. Back in the 1970s/80s when BA owned airline British Airtours, and tour operators Enterprise and Sovereign, all the margin was credited to the airline side, because the airline-oriented management did not want to give discounts to their own tour operators.

The principal asset of the airline side is the assured business from the holidays. If they sell off the airline that assurance is no longer there, and the continuing holiday operator would have no reason not to buy their airline capacity on the open market. If the airline side is so profitable then their pricing is presumably not the lowest.

Comments that the holiday airlines are a declining market ignore the likes of Jet2, who have made substantial, and financially worthwhile, expansion into exactly this market in recent years, doubtless having scooped up a lot of Thomas Cook's potential along the way. Just a different management style. People have not stopped going to the Mediterranean and elsewhere, far from it.

[RickNRoll]

Never understood that - selling the bits that are making cash to support the bits that aren't..........

Capitalism is about backing winners not losers IMHO

Capitalism is also about only buying the winning bits, not the losing bits.

[nowhereasfiled]

Cutting off the nose to spite the face springs to mind

[safelife]

German media reports Lufthansa as potential bidder for TC/DE long haul, and Ryanair for the remaining parts now.

[USERNAME_]

German media reports Lufthansa as potential bidder for TC/DE long haul, and Ryanair for the remaining parts now.

Ryanair saying they are interested in the slots only unfortunately. Hopefully it all works out for TCX, can't have another one bite the dust this year. Everything seems to have gone very quiet recently.

[UAV689]

Europe is going the same way as usa. There is only so many passengers. Growth will come via mergers.

In 5-10 years all there will be in europe is iag/af-klm/lufty/ryan/easy. Maybe the odd niche player.

Will be interesting to see how j2 is faring at the moment. Seeing lots of sales for them online at the moment on social media, guessing they are behind the bookings compared to last year