Thomas Cook (LON:TCG) Group earnings have fallen sharply in its third quarter as a result of ongoing terrorist incidents across Europe have waded in on holiday booking numbers.
Recent terror attacks in Turkey and Brussels meant that Group revenue dropped 8% to £1.85bn from £1.95 as of June 2015. The biggest hit to the company was a 5% overall fall in summer bookings due to a weak demand for destinations such as Turkey despite it being the groups second largest area of sales in 2015. Sales instead are now increasing in Mediterranean areas such as Cuba and Bulgaria. In total, the airlines summer programme is 81% sold, a 3% reduction from the same period in 2015.
Underlying profit for the company was reported at £2m, a £22m fall from 2015.
The fall in profits for the airline means that Thomas Cook has had to change its annual profit outlook reducing it from £310m-£335m down to £300m.
Despite the damaging results from the report, shares in Thomas Cook were beyond stable rising 9% to 65.27p in early morning trading as an influx of early winter bookings took point rising 19% in the groups season calender.
Chief Executive of Thomas Cook, Peter Frankhauser said:
“Since the half year, we’ve taken action to further reduce our capacity to Turkey and increased sales of holidays to other areas, including the Western Mediterranean and long-haul destinations such as the USA. Growth to smaller destinations such as Bulgaria and Cuba is also strong.
“We are operating in a challenging geopolitical environment, with repeated disruption in some of our key source and destination markets. In addition, while Brexit has had no noticeable impact on our bookings so far, it has added to a general sense of uncertainty – for our business and our customers alike
At 11:47am BST Thomas Cook Group traded at 63.80 + 3.80 (6.33%)
