With Thomas Cook Travel just entering the Aruba travel market from Canada this year, it is disappointing to see what was reported in the news this morning.
Here is an excerpt from the news article.
Over the long term, we are uncertain about Thomas Cook’s commitment to the Canadian mainstream holiday market, and believe its potential exit would have positive implications on the industry supply/demand balance,” said Poirier in a research note to investors.
LONDON—Industry analysts and anxious travellers expressed fears Tuesday for the survival of Britain’s tour operator Thomas Cook, after the company, which took more than 22 million people on holidays in the latest year, revealed its financial problems had worsened.
Shares in 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 Britons who have bought holidays through the firm were anxious.
In Canada, Halifax-based Jazz Aviation said it has launched its second season with Thomas Cook Canada earlier this month.
“From Jazz’s perspective, it’s business as usual,” Jazz said in a statement.
Jazz Aviation has signed a five-year flight services agreement with Thomas Cook Canada to operate six Boeing 757-200s on their behalf to the Caribbean, Mexico and Central America. This winter season, Thomas Cook Canada will fly from Toronto, Calgary and Vancouver.
Several small British travel firms have gone under since the global economic crisis hit in 2008, but Thomas Cook is an industry giant, and a fixture of Britain’s main streets.
Jamila Juma-Ware, 27, who has booked a holiday in Tenerife in the Canary Islands in the next three weeks for herself and her mother, said she was “praying it’s going to be all right ... but I’m not confident.”
“There are a lot of small independent travel agents around here, but I said I’d rather just book it through someone like Thomas Cook because they’re big and there’s more of a guarantee they won’t go bust,” Juma-Ware said. “And then this week, this happens. “
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 travellers, and Egypt, flooding in Bangkok and disappointing sales in Russia have all added to the pressure on the company.
Analysts said the financial troubles could scare away customers, darkening the firm’s prospects.
“Legitimate questions will be asked as to whether Thomas Cook can survive long-term,” said James Hollins, analyst at Evolution Securities. He added that he believed the company could pull through on the strength of businesses outside Britain, but “a more flexible financial structure and massive turnaround are required.”
Thomas Cook Group PLC shares were down almost 75 per cent at 10.41 pence (16.8 cents Canadian) in afternoon trading in London. On July 1, shares had closed at 134.5 pence.
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.”
Randi - I believe Thomas Cook primarily supported the flight portion for their own leisure brands such as Sunquest. This may be a bad news / good news story since it may finally prompt WestJet to get serious about direct fllights between Toronto and Aruba. Of course, a large travel company like Thomas Cook going down for the count, is not a good sign for those markets relying heavily on tourism (higher prices and thus fewer people travelling), especially in this economic climate.
Aquaman has a good idea to determine Canadian demand that we can present to ATA and the minister of tourism on Aruba to encourage WestJet to begin schedule direct service. PM him for details.