Thomas Cook shares slump on day Egyptair jet goes missing

Shares in Thomas Cook plunged 19% yesterday as it said its summer bookings fell as security concerns meant more holidaymakers opted for breaks in Spain over Turkey, Tunisia, and Egypt, outstripping its efforts to adjust flights.

The drop in the shares to a three-year low of 72 pence came as it released its first-half results, on the day travel stocks fell after the disappearance of an EgyptAir flight.

Despite shifting 1.2 million airline seats from the eastern to the western Mediterranean, the British travel operator said bookings were down by 5% and full-year profit would now be at the bottom end of market forecasts.

Chief executive Peter Fankhauser said Turkey, its second most popular destination last year, had not recovered as he had hoped after an attack on tourists in Istanbul in January.

“This has had a particular impact on our German airlines business, which is the market leader into Turkey,” he said.

The last update from Thomas Cook in March, which sent its shares to a previous three-year low, came on the same day as explosions in Brussels.

Mr Fankhauser said holiday bookings in Belgium had come “to a standstill” as a result.

Thomas Cook shares have now slumped 40% since the start of the year.

Shares in its much bigger European rival, TUI, fell 2.5% yesterday. Its shares are down 17% this year.

TUI said last week it plans to sell a collection of adventure travel activities, tightening its focus on mass-market holidays to lift profitability.

Bookings at TUI were up 1%, with demand strong, it said.

Other travel shares also eased slightly yesterday, with IAG — the owner of British Airways, Aer Lingus, Iberia, and Vueling — down 1.7%. Experts said that inbound tourism to Ireland was unlikely to be affected.

“In the past, other big European city destinations had been affected by outrages in Paris and Brussels, but Ireland was not affected. We do not expect an effect on inbound tourism from the US,” said Conor McMahon of Travel Extra.

Tourism chiefs said that Ireland had benefited in the past because the island was seen as a safe destination.

Thomas Cook shifted airline seats from Turkey, Tunisia, and Egypt to the Canaries, Balearics, and mainland Spain where it had found extra hotel rooms, but it was not enough to compensate.

Holidaymakers could turn to Turkey at the last minute, Mr Fankhauser said.

“There is no late market in Spain, because Spain is filling up extremely fast, and then there may be a shift back into Turkey,” he said.

“We are suffering a bit more (than rivals) because we are much bigger (in Turkey) than other competitors,” Mr Fankhauser said.

“We are happy with the demand outside Turkey, we are up 6% if you take Turkey out,” he said.

Thomas Cook said operating profit for its year to end-March 2017 would be between £310m (€398m) to £335m. Analysts have forecast a range of £310m to £359m.

First half revenue grew slightly to £2.67bn, it said, and an underlying operating loss narrowed by 5% to £163m thanks to an improvement in margins.

It said it continued to expect to pay a dividend this year.

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