Warm European weather takes toll on Thomas Cook’s profit forecast

Thomas Cook makes all its profit in the summer when its customers in northern Europe go on holiday, primarily in southern European destinations such as Spain, Turkey and Greece. (Reuters)
Updated 31 July 2018
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Warm European weather takes toll on Thomas Cook’s profit forecast

LONDON: British travel company Thomas Cook Group said its annual profit would come in at the lower end of expectations after hot summer weather in Europe affected late holiday bookings.

Thomas Cook makes all its profit in the summer when its customers in northern Europe such as Britain, Germany and Scandinavia go on holiday, primarily in southern European destinations such as Spain, Turkey and Greece.

But northern Europe has experienced warmer than average weather over the summer so far, affecting late bookings. Thomas Cook said that full-year underlying operating profit would now be at the lower end of market expectations.

The downgraded outlook comes after the company was reported by a British newspaper to be considering splitting off its airline and selling a stake to an outside investor to reduce debt.

The company runs both a tour operator business and an airline, and said in its third quarter statement on Tuesday that a strong performance from its airline, especially in Germany, had helped to offset the impact of a warm summer.

“The sustained period of hot weather in June and July has led to a delay in customer bookings in the tour operator, restricting our ability to drive margins in the ‘lates’ market,” Thomas Cook said in a statement on Tuesday.

Thomas Cook had guided in May that it was on track to meet analysts’ expectations of a 7 percent rise in its post-operating profit to £352 million ($462.04 million) for the 12 months to Sept. 30, on a constant currency basis.


VW to stop doing business in Iran: Bloomberg

Updated 26 min 15 sec ago
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VW to stop doing business in Iran: Bloomberg

  • VW will still be able to do some business in Iran under a humanitarian exception
  • VW has scrapped plans it announced in July last year to sell cars in Iran for the first time in 17 years

WASHINGTON: Volkswagen has bowed to American pressure stemming from the US rejection of the multi-party nuclear deal and will end almost all business in Iran, Bloomberg News reported Wednesday.
The accord was reached Tuesday after weeks of talks between the German auto giant and the administration of President Donald Trump, said Richard Grenell, the US Ambassador to Germany, according to Bloomberg.
VW will still be able to do some business in Iran under a humanitarian exception, Bloomberg added.
In May, Trump pulled the US out of the deal it reached with Iran and five other countries in 2015. That accord lifted sanctions against Tehran in exchange for restrictions on its nuclear program.
Now, the US is reimposing those sanctions.
Bloomberg said VW has scrapped plans it announced in July last year to sell cars in Iran for the first time in 17 years.