28 Mar 2012 07:00
28 March 2012
Thomas Cook Group plc
Pre-close Trading Update
Prior to entering into a close period, Thomas Cook Group announces the following update on winter and summer bookings.
Sam Weihagen, Group Chief Executive Officer, said:
"Trading across the Group has been stable since we last reported and in line with expectations. In the last few weeks we have seen an improvement in UK booking trends, helped by our recently launched advertising campaign and upgrades to our thomascook.com website."
Current trading
Winter 11/12
The winter season overall remains subdued, but bookings have improved in recent weeks.
Year on year variation % | |||
Average selling price | Cumulative bookings | Planned capacity | |
UK - Total - Specialist & Independent - Mainstream |
- - -1 |
-4 +1 -9 |
- - -8 |
Central Europe | +3 | -3 | -4 |
West & East Europe | +4 | -18 | -18 |
Northern Europe | -5 | +10 | +10 |
Airlines Germany | -5 | +20 | +18 |
Note: Figures as at 24/25 March 2012. In Central Europe and West & East Europe, bookings represent all bookings including cars/overland, however capacity represents airline seat capacity only. Northern Europe winter season is October - March.
The UK programme is currently 91% booked overall which is broadly in line with last year. Mainstream bookings have continued to improve since we last reported and are now down 9% broadly in line with planned capacity reductions, whilst overall pricing has remained stable.
Bookings in Central Europe are ahead of expected capacity and pricing remains stable since the last update. We continue to see stronger demand for car holidays and dynamic packages, offsetting pressure in the short haul business.
Bookings have been stable in the West & East segment since the last update, and reflect lower bookings to the MENA region, particularly in France. Pricing is ahead year on year, reflecting a greater proportion of long haul bookings.
Bookings in Northern Europe are up 10%, in line with capacity increases which largely reflect growth in a competitive marketplace. Pricing has remained stable since the last update, but margins are weaker due to lower average selling prices and higher costs, especially fuel which has a more significant impact on the longer haul winter destinations.
In our German airline, capacity growth reflects greater short haul aircraft productivity and growth in our long haul business. Bookings are up 20%, in line with planned capacity increases. Yields are down in the short and medium haul business as a result of competitive pressure.
North America's key mainstream booking season is winter, when we operate a flying programme using aircraft from the UK. This year yields have been poor as a result of overcapacity in the market and the mild weather.
Summer 12
Bookings are tracking capacity in the UK and in Central Europe, despite the difficult market backdrop, but are slower than expected in Northern Europe and West & East Europe where we retain the flexibility to reduce capacity should demand not pick up.
Year on year variation % | |||
Average selling price | Cumulative bookings | Planned capacity | |
UK - Total - Specialist & Independent - Mainstream |
- - +4 |
-2 +14 -10 |
- - -12 |
Central Europe | +1 | Flat | Flat |
West & East Europe | +4 | -11 | -9 |
Northern Europe | +6 | -13 | -3 |
Airlines Germany | +5 | +2 | +7 |
Note: Figures as at 24/25 March 2012. In Central Europe and West & East Europe, bookings represent all bookings including cars/overland, however capacity represents airline seat capacity only. Northern Europe summer season is April - September.
Overall, UK bookings are 2% behind prior year. Mainstream bookings are down 10% and we have 17% 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 14%. Following recent improvements to our websites, mainstream online bookings have seen a substantial uplift and were up 19% in the last four weeks.
Central Europe bookings are in line with planned capacity, with the last four weeks' trading 10% ahead of prior year. Pricing has improved despite the competition in the market and margins are stable.
Trading across all markets in West & East Europe remains challenging, largely driven by lower consumer demand, and is particularly challenging in France. However, bookings in recent weeks have shown a better trend. Further capacity has been taken out as part of our actions to de-risk the business and turnaround the performance in these markets.
Bookings have improved in Northern Europe and are now trending towards capacity. Prices are up 6%.
Bookings are up 2% in Airlines Germany with capacity increasing 7%, predominantly on long haul destinations. Yields are up 5%, partly driven by a higher share of intercontinental routes and the introduction of a fuel surcharge.
Disposal of Indian Subsidiary
As announced on 8 February 2012, the Group has launched a sale process for its Indian business. We have seen a good level of interest and the disposal process is progressing well.
Outlook
As we stated in our first quarter results, we continue to expect 2011/12 to be a challenging year given the economic backdrop and difficult trading environment, particularly for winter. The trends which we saw in the first quarter have continued through the second quarter, but summer trading is more encouraging.
Enquiries
There will not be a conference call following today's announcement. For enquiries please contact:
Thomas Cook Group plc +44 (0) 20 7557 6413/14
Investor Relations
RLM Finsbury +44 (0) 20 7251 3801
Faeth Birch