Terror And Unrest Hit Thomas Cook's Results

Thomas Cook (Xetra: A0MR3W - news) has slashed its yearly profit forecast - blaming falling sales on unrest in Turkey and terror attacks in Belgium.

The British travel operator said bookings were down by 5% because of continued weak demand in Turkey, prompting the company to shift its capacity to other routes.

March's bombing of Zaventem Airport and Maalbeek metro station in Brussels, which killed more than 30 people and injured hundreds, also had an impact on Thomas Cook's finances.

In a statement, Thomas Cook said it made an operating loss of £25m in the three months to the end of June, compared to a modest profit of £3m in the same period last year.

The company added that the disruption caused revenues over the quarter to fall by 8% to £1.85bn.

It is now forecasting an annual operating profit of £300m - considerably less than the estimate of £310m to £335m given back in May.

However, there has been growth in other routes as customers seek alternative destinations - with smaller countries such as Bulgaria and Cuba becoming more popular.

Bookings to Spain's Canary Islands are up by 18%, with a 30% increase in bookings for holidays in the US.

Peter Fankhauser, the chief executive of Thomas Cook, said: "We are operating in a challenging geopolitical environment, with repeated disruption in some of our key source and destination markets.

"In addition, while Brexit has had no noticeable impact on our bookings so far, it has added to a general sense of uncertainty - for our business and customers alike."

Thomas Cook's results followed updates from other companies in the travel sector.

In the aftermath of the Brexit vote, Ryanair said earlier this week it was planning to trim capacity from its airports in the UK later this year - and although there are no plans to close any routes, availability is expected to fall by about two million seats.

Meanwhile, Air France (Paris: FR0000031122 - news) has warned its finances could suffer after terror attacks in the country, as some people now have a "special concern" about travelling there.

As it unveiled its half-year results, the company said the attacks had reduced the attractiveness of France as a travel destination - meaning there could be challenging times ahead for its business (Other OTC: UBGXF - news) .