Thomas Cook says 15 tour companies to fail

The travel company’s chief executive is predicting that 15 UK operators will collapse in the next three months.

Travel Insurance News - 18/12/2008

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Manny Fontenla-Novoa, the CEO of Thomas Cook, elaborated saying that traditional the months of January through March are the time of the year that cash flow for travel operators is at its lowest and companies struggle to survive during this period. The reason that he has predicted the failure of so many companies in the upcoming months is that the recent downturn in travel means they will not have the cash to make it through this slow period.

According to Civil Aviation Authority figures, 33 travel operators failed in 2008, as compared with 25 in 2007. In addition, 26 airlines collapsed this year.

"If companies can survive the next three months they should be fine, but this period is crucial," the company executive said.

Fontenla-Novoa added that it is likely a number of airlines will fail during the economic recession, but would not identify them.

Destinations hardest hit by the declining value of the pound have been Spain and Greece, as the pound approaches parity with the euro. Non-eurozone destinations, such as Turkey, have benefited from the weakened pound, with the number of British holidaymakers visiting Turkey increasing by 20 per cent over last year, according a Thomas Cook report.

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