Thomas Cook Group likely to sell entire airline business (Thomas Cook & Condor)

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One of the ex-Monarch A320’s acquired by Thomas Cook in a hybrid livery 

The UK based Thomas Cook Group has launched a complete strategic review, with the ‘almost certain’ outcome that it will sell its Thomas Cook and Condor branded airlines.

Thomas Cook is basically a holiday company, with a vast portfolio of own-brand hotels and resorts sold from the UK and Germany online and in retail outlets, for holidays in Europe (notably Spain), Canary Islands, Tunisia, Egypt, Turkey, Cyprus and Greece, along with the Caribbean and Mexico.

The airline was originally devoted to carrying British and German passengers to these resorts, but that part of the airlines business has become smaller over the years. Now, under 40% of Thomas Cook/Condor aircraft seats  are taken up with their own all-inclusive holiday destination passengers.

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The other 60% are sold on the open market to individuals who can book online passage to anywhere the airline flies – which includes New York in winter months and Las Vegas and Los Angeles seasonally. The remaining tickets are sold to other holiday companies.

The problem for the company is the intensive, competitive and costly operating environment of the airline, the need to modernise its aircraft and the fact that in the end, it’s not really doing what it was intended to do at anywhere the near level that it used to. And it never will again.

The holiday company arm is also making profits again, and it needs to invest in its hotels and resorts – another highly competitive area that needs constant attention to keep things fresh, new and exciting enough to drive new and repeat business, especially with notoriously demanding British and German families, both of which are well known for expecting a great deal for their money.

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The answer is to sell the airline and plow the money back into the hotels. Wether or not this will see the airline broken up, disbanded, or sold as a going concern to a larger group – easyJet and RyanAir (who have just established a new corporate Group to allow them to buy up just such airlines and keep them as a separate legal entity), is yet to be seen, but change is clearly coming.

Thomas Cooks fleet consist of 40 aircraft with 2 more due to be added in 2019. They are 29 A321’s and 10 A330-200’s along with a single 757-300 due to retire.

Condor operates 51 aircraft, 9 A320, 9 A321, 3 A330-200, 16 767-300 & 14 757-300’s.

 

 

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