SHARES in Thomas Cook yesterday plunged almost 6% after it posted widening losses for the first nine months of the year and provided particularly gloomy assessment of the economy.
The travel giant, which is 53% owned by insolvent German retailer Arcandor, also warned that it would miss its 2010 operating profit target as the global downturn continued to deepen and holiday makers continued to tightened their belts.
Yesterday's grim news from Thomas Cook comes hard on the heels of a reported 21% decline in winter bookings earlier in the week from TUI Travel, Europe's biggest tour operator.
And adding insult to injury for the global tourism sector, InterContinental Hotels, the world's biggest hotelier, said on Tuesday that a recovery for the industry might still be two years away.
However, like TUI, Thomas Cook has also seen a sharp decline in bookings for winter holidays. The company said bookings for winter were down 27% in Northern Europe, compared with last year. In the UK, the decline was 13% - although it added that it had seen some improvement in the past month, with a decline of just 8% against last year.
Shares in Thomas Cook yesterday fell 4.8%, or 11p, to 219p.
Manny Fontenla-Novoa, the company's chief executive, said the 2010 expectation had been set as an "aspiration" than a target at the time of the group's formation prior to the economic downturn following a tie-up of Arcandor's travel unit and the UK's My Travel in 2007.
"That was put out there at the time we merged the businesses when there was no recession and the pound was much stronger against the euro and the dollar," Fontenla-Novoa said.
For the nine months to the end of June, group revenues climbed 11% to £5.9bn.
However, pre-tax losses widened to £286.4m, compared with £236.7m last time, following a £107.3m hit from costs related to its merger with My Travel and a £12.6m charge related to the swine flu outbreak.
Both Thomas Cook and TUI Travel have cut the amount of holidays they sell by more than a quarter in the past two years in response to drooping demand, enabling them to lift selling prices and avoid offering heavy late discounts to fill empty slots.
Fontenla-Novoa said he expected 2010 to be even tougher than 2009, with unemployment in the UK now at its highest rate for 13 years. Nonetheless, in spite of the losses, Thomas Cook insisted it remained confident of meeting market expectations for 2009 and 2010.
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