Thomas Cook has announced another round of cost-cutting worth £50m to raise up to £150m by disposing off its non-core businesses and bringing the total savings to £350m in an effort to revive its loss making travel business. The travel group’s chief executive Harriet Green will be seen charting a turnaround strategy with a ‘high tech, high touch’ approach which will see the travel operator simplify its functionality and sharpen its focus on online sales of holidays.
The latest round of cost-cutting measures comes a week after Thomas Cook announced 2,500 job cuts and closure of 195 travel agencies across the UK. The turnaround strategy will see the world’s oldest tour operator place higher emphasis on online sales of holidays and introducing “flexible” new products and services. Harriet Green identified that some holiday types such as city breaks were only a small part of the Thomas Cook portfolio, a shortfall that Thomas Cook has vowed to address.
Thomas Cook chief has also charted out a goal of reaching an operating profit margin of more than 5% in Thomas Cook’s flagship UK business by 2015. Harriet Green, who took to reigns last summer, has already identified a further £160m of cost savings through initiatives such as merging the company’s UK, Belgian and German airlines.
Although details as to what businesses would be disposed off is yet to be disclosed, analysts opine that brands such as Luxury travel agent Elegant Resorts, long-haul specialist Gold Medal and Neilson, could become prime casualties. Thomas Cook is also selling its stake in NATs, the national air traffic control service, along with rival TUI Travel. Shares in Thomas Cook surged by 12% after the announcement of turnaround strategy.