To say that the travel industry has been under a lot of pressure the last few years is an understatement. Companies have been closing their doors left and right as fewer and fewer people have been travelling. At the very least, the people who are travelling are changing their travel habits to spend less money. For some companies, such as Thomas Cook, this has caused them not to turn a profit in a long time. However, Thomas Cook has announced that it has turned a profit for the first time since 2010. This could mean the start of a huge turnaround for the travel industry as a whole.
According to Thomas Cook, it was able to make an operating profit of £13 million in the year up to September 30. This is a huge improvement over the £170 million loss that it made in the prior year. Overall, the company is saying that its operating profit increased by 49 percent. This is a huge turn of events in less than a year’s time.
Harriet Green, the chief executive of Thomas Cook, said that the company has made huge progress. This is only the first year of its turnaround plan, and it is already announcing that it has turned a big profit. This is going to put the company firmly back on track to profitability.
For those who do not remember, Thomas Cook announced that it was coming up with a turnaround plan to save the company. This announcement came after its near collapse in 2011. Companies that did not have pockets as deep as Thomas Cook were unable to weather the storm.
Green added that the company has lowered costs quicker than it had originally planned. That being said, Thomas Cook has a lot more planned. Thomas Cook does not just want to return to profitability; it wants to stay there. Thus, it will continue implementing new strategies to make sure that it has the right recipe for sustainable growth.
In fact, since Thomas Cook was able to achieve such a huge profit, Green has already raised its cost-saving plan to £400 million by 2015. This is an increase of around £40 million. These savings will be achieved by making further reductions in costs in its overall business plan.
Of course, Thomas Cook did not just turn a profit because it was able to cut costs. It also turned a profit because more people have been travelling as of late. This is mostly due to the fact that the world economy has finally started to improve. This has caused people to change their spending habits, including how many trips they are willing to take every year.
One example of how much more people are spending on travel is seen by how much revenue Thomas Cook was able to make during this quarter. Its revenue rose to £9.3 billion. This means that revenue for the company is up 1.3 percent. This is a huge reduction considering the fact that it reduced capacity. Top this off with the fact that costs for the company are down 2 percent, and it is easy to see why the company was able to turn a bigger profit.