Thomas Cook chief executive apologises for reaction to Corfu deaths as it trims losses with "substantially improved" performance

 
Joe Hall
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Fankhauser: "It is clear that there are things that we as a company could have done better in the past nine years" (Source: Getty)

The travel agent may have reported higher profits, but its reputation has taken a battering this week, after it emerged it had failed to apologise to the parents of Bobby and Christi Shepherd, the two children who died from carbon monoxide poisoning in a Corfu hotel in 2006.

Read more: Thomas Cook donates £1.5m Corfu compensation to children’s charity

But although the company's results did not allude to the tragedy, today its chief executive, Peter Fankhauser, went on a PR drive, telling journalists he was "deeply sorry" for the way the company had handled its reaction to the deaths.

"It is clear that there are things that we as a company could have done better in the past nine years," he told the BBC.

"In particular, the way we have conducted our relationship with the family and this is something that we are going to change.

"We did not handle our relationship with the family well. During the past nine years we failed to show the compassion that we should have shown to the family. That is probably the main mistake."

The figures

Shares in the travel company dipped as much as two per cent to 152.65p this morning as it reported narrowing losses, cutting its seasonal loss by 22 per cent.

Revenues rose 1.2 per cent, or £37m, to £2.7bn as its loss from operations were trimmed from £283m to £220m and overall pre-tax loss from £366m to £303m .

During the six months to the end of March, the group signed an £880m financing facility which it said will help it to create a "more efficient capital structure".

Why it's interesting

In the last year, Thomas Cook has benefited from the fall in worldwide oil prices, providing new chief executive Peter Fankhauser with a small helping hand towards the unenviable task in replacing Harriet Green in the role.

Fankhauser has helped continue the slow rise in the company's share price, which has grown from 137p to around 155p. He's now predicting a strong summer, with a higher percentage of Thomas Cook's summer programme sold compared with the same stage last year, and is leading the group into the growing Chinese tourism market by teaming up with local investment group Fosun.

Fosun owns Club Med, which could allow Thomas Cook further partnership opportunities.

What Thomas Cook said

Fankhauser said:

Thanks to the actions we have taken, both profits and like-for-like revenues have grown, and debt has been further reduced. We have formed a promising strategic partnership with Fosun, a leading Chinese investment group, under which we are developing further growth opportunities, both within and beyond our traditional European travel markets. In addition we have signed a new, significantly larger financing facility, giving us improved financial flexibility and liquidity for the future.

Our performance in the first half provides a solid foundation for the full year and beyond.

In short

Encouragingly for Thomas Cook investors, Fankhauser appears to have kept the company on the slow road back to profitability which Green left it on - but there is cause for concern over any lasting damage from its recent PR mishaps.

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