UK costs hit Thomas Cook profits

28th Sep 2010 07:19

Travel company Thomas Cook has started a review of its UK cost base after softer than expected business over the summer and in view of the difficult market backdrop."Our cost experience in the UK has not been as favourable as expected, particularly in the airline, and this will result in a net impact of around £10m on the underlying operating profit," Thomas Cook said.Cook has had particular problems with its fleet of 44 planes, adding that the current year has proved tougher than 9/11. Its suppliers and all UK operations are being reviewed. It is the second time in just a few months the travel group has downgraded profit expectations.Thomas Cook said it continues to forecast broadly flat capacity in the UK and Northern Europe for winter, but has increased flight capacity in its West/East and Central markets to meet higher anticipated demand.The group added, "Whilst still early in the season, winter 10/11 bookings have got off to an encouraging start." In Germany, its tour operator and airline have continued to perform well with strong trading in recent weeks. "Pricing trends, bookings and booked load factors in most of our major source markets are currently ahead of last year," the group added.