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No question they will survive but must facilitate supply and demand. The present issues are the creation of some '' wandering minstrel'' (city analyst) and the press looking for a headline and not understanding the consequences, damage now done. These problems are historic, not new, stemming from de-nationalisation. When the glut of expansion by acquisition reared its ugly head Cooks should have left those companies to manage themselves and not be brought inhouse to be lost and gather dust. More-so Airtours and Club 18/30, Whoever believed JMC could ever exist hopefully is now resting in a mental institute, a costly mistake.The reality is that the board must accept full responsibility the ostrich days are gone.I wish Cooks very well and good health.
Why is there no Question they will survive in today`s world with British Steelon the brink and other large corporations in poor shape.The company since acquiring/merging with My Travel has never got to grips with the debt or Business as a combined entity.Cook now are paying for that in a write off of good will thats been festering in their books since the merger in Feb 2007 so over 12 years!.The whole situation that Cook are in is due to the fact Manny did a rebound deal when Peter Long pulled out of a merger with First Choice and did a deal with TUIinstead.Manny as CEO and the Board should of been far brighter and left My Travel to go down and pick up the good bits (like Airtours did when ILG failed) instead his ego got the better of him (As it did with the disaster shop deal with coop and Mike Greenacre)and he did a bad bad deal with MY Travel both these huge errors have put Cook into the position they are today which is on intensive care..Harriet G may of got the share price up and managed to get investment from FOSUN but on the face of this write off it could be considered that many people have been misled over a 12 year period as to the real health of the company.It is clear that the big 4 Auditors are under extreme scrutiny with record fines beingafforded yesterday to one of them , as well as a raft of other calamities with Tesco Bhs Carillion etc etc... the list is long and thus partners in the big 4 will be very vigilant in their impairment testing and reporting to avoid more fines and claims.Cook could easily fail as a result of this backdrop make NO mistake about it theyneed a white knight and a radical model change with new equipped Managementto turn the Business around which has to mean breaking the Business up if thetime exists to do that..It is a very serious and acute situation for all the people the company employsi wish them all luck in getting FOSUN in with a 1 Euro coin to buy the lot and pump much needed cash and impetus to the BusinessThe city have valued the Business as worthless so anything more than nothingseems like a deal they will have to take.
The boss of TUI in Jan this year predicted a Tour Operator would fold with 1M pax bookings in the future and over 100,000 pax overseas.
Let's hope TC sells off the hotel chain and the airline to pay down some of their debt, or enter into a CVA
If they sell of the 'hotel chain' and the airline, what does that make them? A travel agency only?
That was an old article from 2009, and they are not looking to sell off there hotel chain, this is the area they want to expand, 22 new hotels this year
Yes, but they have no cash to do so - so its a pipe-dream. New hotel concepts, even as JV's are INCREDIBLY expensive.
pity they cant go back to 2009 and execute planWhat is the cost of further debt to burden Business with in buildingmore Hotels this is their problem they have moved from being a good retailer with no risk to a Retailer/Airline/Tour Operator and now Hoteloperator with ALL risk in value chainIf bookings dry up (as they are and will) the company will collapse like a ponzi pyramid as no money will be coming in to drive thistotally VI reliant model so debt cannot and will not be serviced
Madness...let Retailers run Retail (Hays and Barr head seem to be doing well )this is at expense of Thomas Cook who have lost their values and what they were good at ..They were ther best retailer in WorldThey are NOW too integrated and not in the market due to crazy transfer pricing and a lack of reality to what the person on street will pay and wants ,but more driven by spread sheets and nonsense internally driven politics as to what department can make the best margin
They need to go back to basics which is retail and sell the rest of the components to companies who are expert in that expert fieldthey dont and have not for 12 years had anything like the financialfoundations to be taking on ALL this risk and debt they are spread wafer thin in almost ALL areas.
They have become a "JACK" of ALL trades and a Master of NONE
Time to get real or end up bust.
I think the honest answer is that they are open to sell anything, its about cash at this point - they have none and although summer cash is round the corner, I doubt anyone realistically believes they can fund their position until that point, especially now all the card processors and merchants are holding back troves of cash (rightly so, as they carry significant exposure).
Realistically, they will not trade themselves out of this situation, their cost base is significant, they own very little of their own product to sell.
Their only real assets are the aircraft - but as Ryanair said yesterday - the assets aren't real - all the aircraft are leased and only cater to holiday-makers and at a higher cost than a standard budget airline, so there is no real value there. The only possible option would be a merger of the airline with another TO - but the aircraft are old and costly to maintain/run and with over-capacity in the market, I doubt anybody could fill the additional seats in any circumstance.
The TC Shops are significantly under-invested and although still represent much of their own high street market - they have been disappearing quickly over the years and will dwindle even quicker once the old Co-Op leases start to run out. The store cost model isn't productive and they will be carrying a large staff cost which will not be paying the stores enough of a return.
The TC website is awful, I think we can all agree - I understand under-investing in dwindling stores, but surely the website should be getting some serious cash to bring it more in line with modern design and operability standards. Also the product looks awful the way it is merchandised and the 'offers/deals/usps' baffling.
They are introducing new product such as Casa Cooks, but not at a cost that would allow them to rapidly roll this out, also whilst that proposition suits a certain demographic - that isn't the core TC demographic and therefore will just end up being discounted or over-marketed in unfamiliar territory like Instagram, where a typical millennial will not know what TC is or why it should buy from TC.
There is clearly over-supply in their Head Office too, there are a significant number of people working there and way too many layers of management, which is crippling for a large sized business as it means they are not nimble and certainly not able to embrace change at the speed they need to in order to survive. Also, it will be very expensive exercise to strip out layers when there is no money available to pay the vast redundancy costs that would be due.
The best option might be a CVA, which would allow them to drop the onerous leases on the older aircraft, exit shop leases at an accelerated rate, the redundancy costs would be footed by the government. However, persuading the CAA to give them a new licence and proving they have enough money in the bank to fund a new business and keep it running will be a real challenge without any external investment (probably £200m+). The sensible option would be to strike a deal with Easy/Ryan to take their slots and arrange more holidays with normal domestic flying through the budget brands.
Either way, its not looking good - and whilst we're all very fond of the brand and arguably the UK needs a stronger challenger brand to TUI to keep TUI honest and on its toes, its likely that they cannot exist in their current state - its clear that they have been rolling for 12+ years and the true financial health has been kept away from the spotlight. Whilst its good to see them still around for nostalgia, clearly as a viable business and one that can be trusted in the customers eyes - it is probably about time to close up shop. Real shame, but it's possibly RIP for TC.
If you know nothing about the airline and indeed the airline industry then best not to mention it. Pretty much all of your analysis of the airline side of the business is false. The airline turned a very respectable profit, hence, Thomas Cook being able to sell it for a decent price.
Whilst the aircraft are indeed leased, their short haul fleet is actually pretty new. But more importantly, they hold a large number of decent slots, especially in Gatwick and Manchester which is what is making the airline so valuable.
Armchair analysts do make me laugh. Thomas Cook will continue for years to come. Such a shame so many people have such an axe to grind.