Thomas Cook Regulatory News (TCG)

11 May 2012

Thomas Cook Group Plc

Aircraft Sale and Leaseback Agreed and Update on Current Trading

·; Aircraft sale and leaseback agreed, expected to provide proceeds of £182.9m;

·; Proceeds to be retained by the Group providing significant additional liquidity;

·; A circular seeking shareholder approval for HCV and the aircraft disposals is expected to be sent to shareholders shortly and will include an update on current trading which is summarised below:

o Summer bookings have improved in recent weeks;

o As expected, first half seasonal losses have widened;

·; Longer term financing announced on 5 May signed.

Sam Weihagen, Chief Executive Officer Thomas Cook Group plc:

"Today's announcement demonstrates the progress which we continue to make to strengthen the Group's financial position, with the aircraft disposals providing substantial additional liquidity. As expected, the first half seasonal losses have widened however, summer bookings have improved in recent weeks."

Aircraft Disposals

The Group has agreed to the sale and lease back of 11 Boeing 757 aircraft with Guggenheim Aviation Partners, LLC ("Guggenheim") and 6 Boeing 767 aircraft with Aircastle Advisor (International) Limited ("Aircastle"). The Group has also agreed in principle to enter into sale and leaseback agreements in respect of a further 2 Boeing 767 Aircraft with Guggenheim.

The Group expects to receive proceeds of USD 202.9m (£126.1m at the current exchange rate) from the sale of 11 Boeing 757s and 2 B767s to Guggenheim, and proceeds of USD 91.5m (£56.8m at the current exchange rate) from the sale of 6 Boeing 767s to Aircastle.

The net cash proceeds of these transactions, which will be used for general corporate purposes, will add to the Group's headroom of cash and available facilities. The leaseback arrangements will be treated for accounting purposes as finance leases. The transactions will reduce the earnings of the Group as a result of increased depreciation and the increase in finance costs in respect of the finance leases offset to a certain extent by a reduction in interest payable on borrowings. The Company estimates the full year effect to be approximately £10m.

Current trading

Winter 11/12

The winter season has closed and bookings were broadly in line with the last update to the market on 28 March 2012.

Note: Figures as at 5/6 May 2012. In Central Europe and West Europe, bookings represent all bookings including cars/overland, however capacity represents airline seat capacity only. Northern Europe winter season is October - March. The statistics reflect the transfer of the East Europe businesses into Central Europe.

Summer 12

Bookings have been broadly stable since our last update on 28 March 2012.

Note: Figures as at 5/6 May 2012. In Central Europe and West Europe, bookings represent all bookings including cars/overland, however capacity represents airline seat capacity only. Northern Europe summer season is April - September. The statistics reflect the transfer of the East Europe businesses into Central Europe.

Overall, UK bookings are only slightly lower than prior year. Mainstream bookings are down 9%, ahead of capacity reductions of 13% and we have 19% less left to sell compared to prior year. Average selling price is stable at +4% and our independent and specialist businesses continue to perform well, with bookings up 11%.

Central Europe bookings are ahead of planned capacity, with sustained improvement in the last four weeks. Pricing and margins remain stable despite the competition in the market.

Trading in West Europe remains challenging, particularly in France. Bookings in recent weeks have begun to improve and are now ahead of capacity. Pricing remains stable at +4%.

In Northern Europe, bookings are down 6% but have continued to improve and are trending towards capacity.

Bookings are up 4% in Airlines Germany and have seen a significant improvement in the last four weeks, up 25%. Yields are up 5%, partly driven by a higher share of intercontinental routes and the introduction of a fuel surcharge.

Interim Results

The Group is in the process of preparing its interim report for the six months ended 31 March 2012. In advance of the release of the interim report, the shareholder circular will include the following information on the results for the six months ended 31 March 2012, which has been extracted from the Group's management accounts.

The unaudited seasonal loss from operations before separately disclosed items for the six months to 31 March 2012 was £262.7m (2011: £165.8m). The segmental composition of the results was as follows:

Note: Results for the six months ended 31 March 2011 have been restated to reflect the transfer of the East Europe businesses from the former West & East Europe segment to the Central Europe segment.

The results reflect the continued difficult trading conditions being experienced in most of the Group's markets and particularly the impact of MENA on West Europe and the poor trading in the Canadian mainstream business following the loss of a key hotel supplier and overcapacity in that market. Central Europe now includes our Russian and Eastern Europe businesses. Whilst Germany has performed well, the Russian business, which was acquired in July 2011, reported a loss of £10.5m. The UK result includes seasonal losses relating to the Co-operative businesses of £14.9m which were acquired in October 2011.

In accordance with our accounting policies, the Group will separately disclose exceptional items, amortisation of business combination intangibles and IAS 39 fair value re-measurement in the income statement. Exceptional operating items before goodwill impairment are expected to result in a charge of approximately £70m, principally relating to the reorganisation and restructuring of our UK, North America and West Europe businesses, professional fees incurred in the amendment of the Group's financing package with its lenders and the revised forecast of the likely cost of settlement of a dispute with HM Revenue & Customs over place of business.

Following the announcement of a formal process for disposal of Thomas Cook India we will treat the Indian business as held for sale and consequently will review its carrying value to ensure it does not exceed fair value less cost to sell. In addition, following the poor trading in our North American and French businesses we will review the carrying value of the goodwill and deferred tax assets in those businesses. In total we expect these reviews to result in an impairment of goodwill in the region of £265m and the de-recognition of deferred tax previously recognised of approximately £45m.

The unaudited net debt at 31 March 2012 was £1,289.9m (2011: £1,094.2m) reflecting the increased opening debt balance, higher seasonal losses and the impact that planned reductions in capacity have on booking receipts.

The Group expects to announce its results for the six months ended 31 March 2012 following the announcement of results of the General Meeting to approve the disposals.

Outlook

We continue to expect this year to be challenging given the economic backdrop and difficult trading environment. The performance of our North American and French businesses has been particularly poor and is a major contributor to the increased losses in the first half. Whilst our booking position for the second half is more encouraging trading will be dependant on how well the Group performs during the important lates market.

Enquiries:

Analysts & Investors - Thomas Cook Investor Relations

Louise Bryant +44 (0) 20 7557 6413

Kathryn Rhinds +44 (0) 20 7557 6414

Media - Finsbury

Faeth Birch +44 (0) 20 7251 3801

+44 (0) 7768 943 171

Conference Call:

A conference call will be held for analysts and investors today at 9am (BST).

Dial in number : +44 (0)20 3003 2666

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Notes to editors:

1. Information on the Boeing Aircraft

As at 31 March 2012, the Group's fleet comprised a total of 90 aircraft (of which 46 are leased and 44 are owned) with an average age of 13.2 years.

Condor has agreed to sell 11 Condor 757 Aircraft to Guggenheim and 6 Condor 767 Aircraft to Aircastle. Thomas Cook Airlines ("TCAUK") has agreed in principle to enter into sale and leaseback arrangements in respect of 2 TCAUK 767 Aircraft with Guggenheim. The aircraft were delivered between 1992 and 2000. As at 30 September 2011, the total net book value of the aircraft owned by Condor was £185.1m and the total net book value of the aircraft owned by TCAUK was £23.9m.

2. Current trading comparators

Current trading data from 24/25 March (as reported on 28 March 2012) restated to reflect the transfer of East Europe into Central Europe.