Can Thomas Cook conquer its debt mountain?
Following the recent losses announced by the UK holiday firm Thomas Cook earlier this week and news that it has whopping debts of £1.25billion, some city analysts have downgraded the companies worth. Among those were the number crunchers at investment bank Citigroup who said that one of the UK's oldest tour companies should be priced at zero pence! Warning that customers might be put off booking future holidays by the firm's drastic financial situation. These dramatic revelations from the city of London sent Thomas Cook's share price tumbling yesterday, loosing almost 40%
The group has put up its airline business for sale and says it has received significant interest, although no firms have publicly said they want to buy the whole lot, Lufthansa has confirmed an interest in buying Condor - the German holiday airline from Thomas Cook. Another name being mentioned by aviation commentators is Virgin/Delta which recently took on the loss-making Flybe. Indigo Partners, the investment firm behind Wizz and Frontier are another that are believed to have put in a bid, whilst IAG, the parent of British Airways, Iberia and Aer Lingus have ruled themselves out.
Travellers with holidays booked with Thomas Cook should not be worried, our chief aviation correspondent Jason Shaw believes, "Thomas Cook is a fully bonded tour operator, so even if the worst should happen, and I don't think it will, holidaymakers will still be covered. The company has a long history and is working hard to cutting down costs, including shutting down a number of loss-making retail travel agencies on the high street, getting rid of some back office and head office staff will also help. Plus, if it is true and there is great interest in the airline business, then the sale of that will plug the financial black hole, at least for the foreseeable future."
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