Shares in tour operator Thomas Cook fell six per cent after a disappointing trading statement which reflected the uncertain economic climate across many of its UK and European markets. Bookings have been relatively stable, with improvements in some European markets being offset by flat or marginally negative performance elsewhere.
Indeed amid uncertain economic conditions ahead of the impending UK government's spending review, UK capacity is likely to remain flat into 2011. To compound this, costs are running ahead of expectation following problems with its airline fleet and this will impact operating profits to the tune of £10m. In response to this Thomas Cook is to review its UK cost base and "streamline operations" which signals job cuts. One bright spot was winter holiday bookings, which have picked up strongly in the UK in recent weeks.
