Turkish terror attacks weigh on Thomas Cook profits

Thomas Cook will miss its full-year profit target after terror attacks in Turkey sent holidaymakers elsewhere.

Bookings in the three months to 30 June fell by 5% depressed by weak demand for Turkey.

Thomas Cook has increased sales in other areas, such as the western Mediterranean, while Bulgaria and Cuba have grown in popularity.

It now expects annual profit of £300m compared with between £310m-£335m.

Turkey was Thomas Cook's second biggest market in 2015, according to Hargreaves Lansdown. On Thursday, Turkey's Tourism Ministry said that the number of overseas visitors to the country dropped by a record 41% in June to 2.44 million people.

In June, 41 people were killed and 230 hurt in a gun and bomb attack at Istanbul's Atatürk international airport while a recent attempted coup against Turkey's President Erdogan has increased tensions.

Thomas Cook also said its third quarter financial results were affected by an attack in Brussels during March, where explosions at the airport and a subway claimed 32 lives and injured many others.

'Upheaval'

Thomas Cook said third quarter revenue fell 8% to £1.8bn and underlying profit shrank from £30m last year to £2m. Pre-tax losses grew from £44m in the third quarter of last year to £64m.

However, shares in Thomas Cook jumped by 9% to 65.27p in early trading as winter bookings were ahead of expectations.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: 'Thomas Cook is facing severe disruptions right now, with political upheaval, acts of terrorism, and the fall in the pound resulting from Brexit all serving to deter holiday makers from travelling.

"On a positive note bookings for this winter appear to be ahead of last year, though it's still very early days on this front. The company's falling revenues were greeted by a strong rise in the share price, which is testament to just how low expectations were."

Thomas Cook chief executive Peter Fankhauser, said: "We are operating in a challenging geopolitical environment, with repeated disruption in some of our key source and destination markets.

"In addition, while Brexit has had no noticeable impact on our bookings so far, it has added to a general sense of uncertainty - for our business and our customers alike."