Travel operator Thomas Cook’s share price plummeted by 20 per cent today after warning of the impact of terrorism on holiday bookings.
The Peterborough-based tour operator said that demand for breaks in Belgium and Turkey is “significantly” down on last year.
I am confident that the actions we are taking... mean we’re well positioned to meet our existing growth expectations.Peter Fankhauser, chief executive
The news sent the company share price into near freefall to 71.35 pence per share - its lowest since March 2013.
Investors fears were made worse by the shock disappearance this morning of a passenger jet flying from Paris to Egypt.
Releasing its interim results for the six months to the end of March, Thomas Cook also revealed that summer bookings for this year are down five per cent on last year.
“The attack at Brussels airport in March has significantly impacted our Belgian business, due to operational disruption to our flying programme, a high level of cancellations and a significant drop in customer demand,” the company said.
It also said that demand for Turkey - its second largest market last year - remained significantly below last year’s levels.
Thomas Cook’s earnings will now be at the lower end of a range of £310 million to £335 million.
But despite the tough market conditions, chief executive Peter Fankhauser is still upbeat.
He said: “Thomas Cook has made significant progress in the last six months.
“Despite disruption in some of our key markets, we’ve managed to slightly grow our revenues on a like-for-like basis, having anticipated the shift in demand away from Turkey, Tunisia and Egypt and into the Western Mediterranean and long haul destinations.
“At the same time, we’ve increased our underlying gross margin by 10 basis points thanks to our focus on selling higher quality holidays.
“The launch of Casa Cook in Rhodes this month is a great example of how we are widening our appeal to independent, style-conscious travellers.
“Underpinning these results has been a fundamental change in our approach to our customers.
“The Corfu inquest was a turning point for Thomas Cook. It was clear to me that we needed to change our mindset and put the customer back at the heart of our business.
“I am proud of the way in which my colleagues across the business have embraced all the changes we have made.
“We’ve created a comprehensive new training scheme for all customer-facing staff, rolled out new software to better serve customers in resort, and introduced a 24-hour customer promise in 1,500 of our most popular hotels.
He added: “It’s early days and there is more to do, but we’ve already seen a positive reaction from our customers, with improvements in the net promoter score across all our markets.”
The tour operator, which already has debts of £825 million, also revealed it has signed a new £150 million additional bank facility to provide it with greater flexibility to refinance outstanding bonds.
Mr Fankhauser added: “I am confident that the actions we are taking to focus on customer excellence, strengthen our holiday offering, invest in omni-channel distribution, and bring our businesses closer together mean we’re well positioned to meet our existing growth expectations to FY18, creating value for both customers and shareholders.”