I don't think Kestrel thinks this is good news! It just makes a point that MYT are not alone! Good luck to all at TC we know how you feel!

I presume that ownership by a big wealthy company like LH gives Thomas Cook an advantage that MT does not have? Another thoght: If the banks were inclined to pull the plug on MT, the time to do it would have been immediatly after the shareholder circular was issued on the 6th.

Who knows? Certainly no one on this forum! However LH don't seem to be that well off these days but all things are relative.

Thomas Cook
 

Looks like this lot pretty skint as well. Can we have at least 4 pages dedicated to the potential collapse of this company and give mytravel a rest.

If you are employed by TC and the answer to any of the following questions is yes, start worrying.
a. Has the Chairman been accused of snorting Coke?
b. Has he also been accused of consorting with Ladies Of Ihe Night?
c. Is BA getting worried about the competition from your airline?
d. Recruiting aggressively when everybody else is cutting back?
e. Ordered another type of aircraft with questionable economics, adding extra costs for maintainace and crewing?
f. Expanded the headquarters building to accomodate even more non-essential staff?
g. Waiting for a cash injection from a questionable offshore source in order to keep afloat?
If all the answers are negative, think positive and try to ignore the rumour mill.

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?????

In 2004, the following will happen:

EZY will grow its fleet of 319s and open new UK routes
FR will grow its fleet of 738s and open new UK routes
Jet2 will continue to grow and will be operating more a/c than in 2003
Flybe will be operating more leisure routes than in 2003
Britannia Express will be muscling in on the seat-only market
Now will start flying
BMI baby will continue its leisure-orientated growth
Monarch will grow its scheduled operations

Also
Interest rates will go up again

Result - fewer people on package holidays. Ergo the airlines dependent on the traditional package (BY, TCX, AMM, MYT etc) will struggle to attract passengers.

If the Tour Operator fails, the airline goes too. Which Tour Operator is weakest?

I feel for those who will be affected, but MYT seems to have run its course, unless some of the above doesn't happen, or unless it is rescued by brilliant management.

But with the above predicted significant expansion of the seat only carriers, are they not going to also struggle to fill seats? FR and EZY have both had trouble giving away seats let alone getting people to pay for them. With the rulings from Brussels viz pax compensation, the lo-cos are going to be under even tighter margins with increasing competition from their own business model.

I do agree that the Tour operating market is mature, but if the tour ops can adjust their business models to match the market demand, then they offer a positive advantage over the lo-cos as a one-stop-shop for your holiday, for which there will always be some demand.

It's all a case of balance.

A4 ;)

brakedwell - mostly for the enlightenment of the young'uns on here, your post above was a passing reference to the late great 'International Leisure Group' and Harry Goodman, right ?

Nb. ILG was one of the largest travel companies in the decade from the 1980 onwards. It was also the parent company of that fabulous airline, Air Europe.
The whole ILG group came crashing down in early March 1991, much due to the 1991 Gulf war effecting customer confidence in holiday and business travel ( to say nothing of a suposed BA dirty tricks capaign ).

The annoying thing about TCX is that it probably will not even make the papers in the UK as they are a German company. You can bet your bottom doller that MYT will be in all of them when the results are announced as lets face it, it ain't going to be pretty!

Stand 22,

The recent woes at TCX have indeed been highlighted in the national press in the last week. The UK arm is expected to make £30m this year while the German side of the operation is the problem area, hence the apparent dismissal this week of the CEO and his right hand man.

I hope MYT do survive as it does no-one any favours if they fold. Wanabees will find their chances diminished, the MYT staff will have a distressing search for new jobs and the terms and conditions for all pilots will undoubtedly be further diminished as managements can point to a surplus of trained pilots looking for work.

That said, the desperate cost-cutting employed at TCX UK post Sep 11 and reduction of capacity i'm afraid to say was not mirrored at MYT. Therein lies the current predicament they find themselves in.

If it's desperate measures that we are looking for, then I don't see any from MYT or TC.

They are not the firms advertising a million seats for didly squat in the hope of filling their new machines!

That maybe, but not to the same extent that MYTs troubles have been scrutinised.

Lets face it there is not an airline Europe that is not in or about to be in a mess. To think otherwise is burying ones head in the sand.

£30 million profit in the UK for TC is great but put it in context, many of MYT's tour operators make a lot of money but if the group is throwing money out the window then all the company's in the group are put under threat no matter how well they are doing in isolation.

This is a very bad time for the industry, be it seat only or package, don't forget MYT have been in the seat only market for a while now, it is not the cure all it appears. The seat only market is getting as saturated as the package holiday market.

:(

Of course the Mail know about it but they like bashing UK operators not German! Hope all goes well at TC and MYT.

seems TUI is doing quite OK, atleast the UK side.

Sadly not the German side!

in general german speaking countries including switzerland are very unflexible and inefficient in aviation business. They are suitable in manufacturing business. Flexibility is key to aviation.

Completely agree Kinsman. The intense competition in the air travel market which has given the travelling public fares that are within reach of most people is also subject to the troubles which have been spreading since 9/11. There is a worldwide malaise which has made people uneasy, and it has resulted in an economic downturn from which we appear to only just, very cautiously recovering from. The on-going world wide unrest however coupled with the growth of the low cost and increase in the seats available for a projected increase in bums which has failed to materialise is creating intense competition in a saturated market, Market forces will result in ' corrections' these will contain pain and inevitable hardships for some, in the meantime every little bit counts, and each company and it's personel will if they are sensible will be doing the best trying to simply survive and try to ensure that it will not be them that go under.

"At a substantial loss " what a load of poo given that TCX is a charter airline any loss ( thats assuming that there is any ) would be Canadian affairs as TCX would be paid if the flight is full or not .