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Travel industry news

16 May 2019

BY James Chapple

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Thomas Cook confirms 'multiple bids' for airline business

Thomas Cook has confirmed it has received “multiple bids” for all, or part, of its group airline, which it put up for sale in February.

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Thomas Cook confirms 'multiple bids' for airline business

In a trading update on Thursday (16 May), Cook said it was making “good progress” on its “strategy of differentiation”, which includes selling its airline business.


Cook set a 7 May deadline for expressions of interest, with Virgin Atlantic, Lufthansa Group and private equity investor and Wizz Air backer Indigo Partners understood to be interested.


The operator declined to comment on the specifics of any of the bids, other than to confirm they concerned both all or parts of the airline business.


It was also confirmed Cook had agreed a £300 million winter 2019/20 “liquidity buffer” with its lenders to give it financial headroom in the event of any undue winter pressures.


However, its availability, said Cook, is “principally dependent on progress in executing the strategic review of the group airline”, meaning it is likely Cook must either complete a sale of all or part of the airline before the winter, or at least make demonstrable progress on the process, to access the cash.


“We are currently assessing the bids received, including for the whole, and parts, of the group airline,” said Cook. “We will consider all options to enhance value to shareholders and intensify our strategic focus and we will provide an update on this process in due course.”

 

Peter Fankhauser, Cook’s chief executive, added: "I cannot say much more but we are pleased with the progress we have made. We have received multiple bids – they are credible bids but we will not comment on names.

 

"We are not commenting on pricing or expectations. We will take the right direction for the business to enhance value for shareholders."


Cook’s airline will operate 105 aircraft this summer, excluding any wet leases.


Its first-half results announcement on Thursday (16 May) revealed the business took a £1 million hit in “external advisor costs” arising from the group airline preparing for a hard Brexit.


This month, speculation has surrounded likely bidders for all or part of the group airline.


Lufthansa boss Carsten Spohr confirmed a bid for Cook’s German airline Condor, with an option to extend this to the group’s UK airline.


Virgin Atlantic, meanwhile, has been linked with a bid for Cook’s long-haul operation at Manchester and Gatwick, and seasonally at Glasgow, which would complement its existing operations at Manchester and Gatwick.

 

Tui, announcing its first-half results on Wednesday (15 May), has ruled out a bid for Cook’s airline business.

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