Thomas Cook plans to sell 77% stake in India unit

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Thomas Cook plans to sell 77% stake in India unit

Holidays firm Thomas Cook said on Wednesday it was managing to hold onto market share, rebuffing claims by TUI Travel that it has been benefiting from its arch rival's financial difficulties.

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Holidays firm Thomas Cook said on Wednesday it was managing to hold onto market share, rebuffing claims by TUI Travel that it has been benefiting from its arch rival's financial difficulties.

The British firm, which secured a rescue package from lenders last November, said it continued to be adversely impacted by economic uncertainty across Europe and political upheaval in the Middle East and North Africa and expects 2012 to be challenging.

But the world's oldest travel company said that it had been encouraged by trading in its home market.

"I have been encouraged by how our bookings have developed, particularly in the UK where our market share for both the winter and summer seasons remains broadly stable," acting Chief Executive Sam Weihagen said in a statement.

Shares in the company were up 5.8% at 13.75 pence by 0948 GMT, when shares in TUI Travel were up 0.4% at 6.43 euros.

TUI Travel, which owns Thomson and First Choice, had said on Tuesday it significantly outperformed rivals in Britain during January, highlighting the uncertainty surrounding Thomas Cook.

On a conference call with reporters, Thomas Cook's Weihagen challenged that assertion, noting that TUI Travel was referring specifically to January, in which he said Thomson and First Choice had ramped up promotional activity.

Weihagen said for summer 2012 as a whole, Thomas Cook had sold 42% of its holidays compared with TUI's 35%.

"With statistics you can prove almost anything. January, yes, they took share. Before that, in December we took share" Weihagen said.

"Had we taken December we would have been hugely ahead of TUI because they were not doing much activity in the market place. They did a lot of activities in January when we were managing more for margin," he added.

Indian sale 

Europe's second biggest travel firm by sales also said it planned to sell its 77% stake in Thomas Cook India as it looks to bring down its debt of 890 million pounds.

Shares in Thomas Cook India rose by 20% to Rs 53.85 in Mumbai following the news, valuing Thomas Cook's stake at around USD 180 million. Shares in Thomas Cook Plc were up 3.9% to 13.5 pence at 0850 GMT.

Thomas Cook's future has been in question since it asked lenders to come to its rescue twice in five weeks, sending its shares into freefall, after it warned of a possible debt default.

Thomas Cook issued three profit warnings last year, culminating in the departure of Chief Executive Manny Fontenla-Novoa in August.

It has been hit hard by tough trading conditions, especially in Britain, where its core customers base of families with young children has been particularly affected by tough economic conditions. It has also been affected by unrest in popular destinations such as Egypt, Morocco and Tunisia.

Weihagen said the company expected to appoint a new chief executive by the end of March.

Thomas Cook said it made a loss of 91 million pounds in the last three months of 2011, it fiscal first quarter, compared with a loss of 37 million pounds the year before. Tour operators normally make a loss in the half year that doesn't include the summer.