SHOCK RESIGNATIONS AT THOMAS COOK

EUROPE'S second largest travel firm Thomas Cook saw a dramatic change in management yesterday after its chief executive and finance head resigned in the face of poor results expected for the full year. A spokesman for Lufthansa, which co-owns the firm with KarstadtQuelle, said new top management would be appointed soon and a new budget established to ensure Thomas Cook's competitive position in the battered tourism industry. Thomas Cook Chief Executive Stefan Pichler and Chief Financial Officer Norbert Kickum resigned with immediate effect in a surprise move late on Thursday that followed a “mutual and amicable agreement with the shareholders”. Earlier that day KarstadtQuelle dropped its 2003 profit goal, citing weakness at Thomas Cook as the main reason and sending its shares plummeting as much as eight percent. “According to the current information, during 2002/2003 as a whole the tourism group will not be able to make up as planned the earnings shortfall recorded after the third quarter,” Karstadt said in its third-quarter report. In September Thomas Cook lowered its full-year profit forecast, saying it would reach, not beat, last year's earnings before interest, taxes and amortisation of 64 million euros. A spokesman for Thomas Cook was not immediately available for comment yesterday.
Pichler has led the travel firm, formerly C&N Touristic, since January 2000 and had been considered a possible successor to Lufthansa CEO Wolfgang Mayrhuber, who replaced Juergen Weber in June. Pichler's contract was to run out at the end of 2004.
Thomas Cook and German rival TUI have battled low demand this year as a tough economy, the war in Iraq and the SARS virus kept tourists at home.
But a recent upturn in bookings has created hope for a better year in 2004.
Thomas Cook's supervisory board appointed KarstadtQuelle management board member Peter Gerard as interim CEO and Lufthansa CFO Karl-Ludwig Kley as Thomas Cook's interim CFO. A Lufthansa spokeswoman said the interim appointments underscored the two shareholders' commitment to the travel group.
Both men will relinquish their positions on Thomas Cook's supervisory board, but will remain members of the management boards of Karstadt and Lufthansa respectively. Thomas Cook bosses said in Palma on Monday that it will reduce the number of flights between the UK and the Balearics, if summer holiday sales do not show any signs of recovering. Summer 2004 bookings are down 36% on this year and if demand for holidays in other destinatiosn rises, then planes on UK to Balearics routes, will be used to meet rising demand on routes to the Caribbean, the United States ot North Africa, This year, Thomas Cook brought 750.000 British holidaymakers to the Balearics, a target the tour operators wants to hit again next year.
One of the concerns aired on Monday by Thomas Cook bosses was the strength of the Euro, but a forecast rise in the strength of the Pound will help ease pressure on the holiday market.