Britain’s Thomas Cook sticks to outlook despite Turkey disruption

LONDON-Reuters

REU Photo

British travel company Thomas Cook stuck to its annual profit guidance on Sept. 27, after strong demand for summer holidays to destinations other than Turkey helped offset pressure on the group.

Exposure to Turkey, the group’s second most popular destination in 2015, has dragged on Thomas Cook this year as holidaymakers have been put off by an attack on tourists in Istanbul in January and a failed coup in July.

For the twelve months ended Sept. 30, Thomas Cook is expecting to post operating profit of 300 million pounds ($389.4 million), an outlook it reconfirmed on Tuesday, with bookings excluding Turkey up 8 percent this summer.

Customers changing their plans to travel to Spanish destinations rather than Turkey had forced Thomas Cook to lower its profit guidance range by 3-10 percent in July, adding to difficulties after the group warned about delayed bookings in March on worries over security.

Thomas Cook’s larger rival TUI Group has so far weathered the disruption connected to Turkey better as it is less exposed to the country. It is due to issue a pre-close statement on Wednesday.

Including Turkey, group bookings for the summer, when Thomas Cook makes all its profit, were down 4 percent, with customers opting for holidays in the Balearic and Canary Islands and the United States.

Summer bookings from the UK were higher than last year despite concerns that the devaluation of the pound after the Brexit vote in June would lower British appetite to travel abroad.

Bookings for this winter were broadly in line with last year, Thomas Cook added.