Thomas Cook Facing Difficult UK Environment

Tour operator Thomas Cook said it is optimistic about the state of its future business despite tough market conditions. Europe's second-largest travel operator by market capital said its net loss fell to $329.3 million from $346 million a year earlier, while revenue for the six months to March 31 climbed 3.7% to $5.61 billion, driven by higher prices and an increase in the number of people buying more expensive trips.

The company said it had been offering holidays at discounted rates in order to stimulate demand and that volatile oil prices are a concern. (The company runs its own fleet of planes.) Chief Executive Manny Fontenla-Novoa said that if high oil prices continue, Thomas Cook would raise holiday prices by 2 percent to 3 percent on average. However, the company would be unable to raise prices in the U.K. because "the hard hit consumer wouldn't swallow the increase," he said to the Wall Street Journal.

Thomas Cook also said its results "reflected disruption resulting from the unrest in Egypt and Tunisia and the later timing of Easter, which fell in the second half this year." The tour operator estimated that the Middle East turmoil cost the company around $36 million during the period.

The U.K., which accounts for about 30 percent of Thomas Cook's total revenue, according to Reuters, has continued to "face tough market conditions in a difficult economic environment, with negative news on inflation, unemployment and expectations of interest-rate rises all hurting consumer sentiment," the company said in a statement.

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