Facing media storm, Thomas Cook expresses regret for death of children

(Refiles to amend grammar in headline)

* CEO expresses regret for deaths of children

* Sees (Shanghai: 600481.SS - news) no impact from calls for consumer boycott

* Says could restart dividend payments next year

By Sarah Young

LONDON, May 20 (Reuters) - Travel firm Thomas Cook (Xetra: A0MR3W - news) expressed regret on Wednesday for the deaths of two British children on one of its holidays in 2006, seeking to end damaging headlines over its handling of the case.

Social media users have this week called for a boycott of the company following reports that the parents of the children had not received an apology and that the company had received more in compensation for the children's deaths than their parents.

"First (Other OTC: FSTC - news) of all I want to say that I feel deeply sorry about the tragic death of these two children," Thomas Cook Chief Executive Peter Fankhauser said in an interview on Wednesday.

"In the past it is obvious that there have been a lot of mistakes in regards to managing the relationship with this family," he added.

But the attempted boycott was not yet biting, he added.

"So far we don't see any impact on our bookings," added Fankhauser, who replaced predecessor Harriet Green in November in a move which surprised investors.

The media storm over the children's deaths, back in focus after an inquest in Britain last week returned a verdict of unlawful killing from carbon monoxide poisoning, threatened to overshadow Thomas Cook's otherwise positive trading update.

The company signalled its return to robust financial health by saying a new debt facility meant it could restart dividend payments for its financial year ending September 2016. It has recovered from a crisis in 2011 when tough trading combined with a heavy debt load conspired to almost bring the world's oldest travel company to its knees.

It also repeated previous guidance that on a constant currency basis it expected growth in full-year earnings.

Bookings for its fourth quarter, when Europeans take their summer holidays and Thomas Cook makes 90 percent of its profits, were going well with improved margins, the company said, offsetting some weakness in third quarter bookings.

Panmure Gordon analyst Karl Burns called it "a good set of numbers" and said that news on the dividend would open the company up to a new shareholder base.

Shares (Frankfurt: DI6.F - news) in Thomas Cook traded down 0.5 percent to 156.6 pence at 0950 GMT, having earlier traded down as much as 2 percent, which Cenkos analyst Simon French said could have been a result of the recent media attention.

"They referred to a bit of booking weakness for the third quarter and I guess that coupled with the recent negative PR has just got some investors a little bit concerned," he said.

For the six months ended March 31, Thomas Cook reported an underlying operating loss of 173 million pounds ($268 million), narrowing a seasonal loss when fewer customers holiday from 187 million pounds in the same period last year. ($1 = 0.6455 pounds) (Reporting by Sarah Young; editing by Paul Sandle)