Thomas Cook in £20m blow from unrest

TOUR operator Thomas Cook warned yesterday that political unrest in holiday destinations Egypt and Tunisia would dent second-quarter profits by around £20m.

Cities in Egypt including Cairo, Alexandria, Luxor and Suez have become virtual no-go zones for tourists, starving the travel firm of valuable revenue from the area. The misery has been exacerbated after riots in Tunisia also took their toll.

Thomas Cook’s first quarter figures to 31 December showed revenues up seven per cent to £1.8bn.

The company sells a million holidays to Egypt and an estimated 600,000 to Tunisia every year.

Chief executive Manny Fontenla-Novoa said: “The situation in Tunisia and Egypt is fast-moving and our principal concern is for the well-being and safety of our customers.

“We continue to monitor the situation closely and contingency plans have been implemented to redirect our holiday programme to other destinations and help mitigate the financial impact.”

On a more upbeat note, the company said that summer bookings for 2011 were healthy. In the UK they are up six per cent and average selling prices up five per cent – the highest of any of its markets, it said.

The company recently announced plans to axe 500 back-office roles in the UK to help cut costs by up to £50m.

Rival and Thomson Holidays owner TUI Travel said last week that the disruption in the two countries could cost it up to £30m in lost earnings after it it was forced to cancel trips.

Thomas Cook’s merger with the Co-op’s travel outlets has been referred to competition watchdogs and is under review.