Thomas Cook shares plunge amid weakening demand for summer bookings

Shares in Thomas Cook plunged more than 16% early on Thursday (19 May), after the tour operator warned that demand for holiday bookings remains weak in the wake of the terrorist attacks in Turkey and Belgium.

Concerns over safety in a number of destinations have led customers to postpone their summer holidays, Thomas Cook said, adding that its bookings for summer trips were 5% lower than in the corresponding period last year.

The FTSE 250-listed group said demand for holidays to Turkey was significantly weaker than in previous years, after a series of attacks on Ankara and Istanbul. The tour operator also forecast a decline in people travelling to Belgium, following the Brussels bombings in March and indicated it expects "a high level of cancellations and a significant drop in customer demand" in the third quarter.

Spain and the US continued to be destinations in demand, although the performance in both markets was not enough to completely offset the decline in bookings to Turkey.

"Thomas Cook is trading well to destinations other than Turkey, with particularly strong bookings to Spain and the USA," said group chief executive Peter Fankhauser.

"However demand for Turkey – our second largest market last year – remains significantly below last year's levels. This has impacted our German Airlines business in particular. We've also seen a sharp decline in demand in Belgium following the tragic attack at Brussels airport in March."

News of the decline in bookings came as the London-listed company announced revenue in the six months to 31 March declined, although losses decreased from £303m ($442m, €394m) to £288m.

Fankhauser said the company forecast underlying earnings before interest for the full year to be between £310m and £335m, adding it expects to continue to pay a dividend in respect of the current year's earnings.