Thomas Cook Airlines Balearics (Palma de Mallorca) will not fly again. It is being dissolved. The plan to revive the airline again was abandoned after failing to attract new investors due to the on-going COVID-19 pandemic. The Spanish airline operated two Airbus A320s at the end.
The company was resurrected in May 2020 by PANAF Holding of Germany. PANAF decided it no longer wanted to invest in the company.
The airline declared bankruptcy on December 26, 2019, but it continued to operate some flights for Condor.
Thomas Cook Airlines Balearics was founded in 2017.
Thomas Cook Group made this announcement on its agreement with the Fosun Tourism Group:
Thomas Cook Group plc is pleased to announce substantial agreement regarding key commercial terms between the Company, Fosun Tourism Group and its affiliates, the Company’s core lending banks and a majority of the Company’s 2022 and 2023 senior note holders. Implementation of the proposed recapitalisation will involve a significant new capital investment and reorganisation of the Group.
Key commercial terms and next steps include:
Fosun contributing £450 million of new money to the Group and acquiring at least 75% of the equity of the Group Tour Operator (subject to the receipt of anti-trust approvals) and 25% of the Group Airline;
The Group’s core lending banks and noteholders targeting in aggregate £450 million of new money to the Group and converting their existing debt into approximately 75% of the equity of the Group Airline and up to 25% of new equity in the Group Tour Operator;
Implementation commitment targeted for early October 2019.
The execution of the transaction remains subject to a legally-binding agreement being reached amongst the parties to the recapitalisation plan and, where appropriate, the Group’s other key stakeholders. The proposed recapitalisation plan does not impact trade creditors or customers.
In its announcement of July 12, 2019, Thomas Cook stated that shareholders may be given the opportunity to participate in the recapitalisation by way of investment alongside Fosun and converting senior creditors on terms to be agreed. The Board continues to proceed on the basis that a recapitalisation, achieved with the support of shareholders, is the preferred means of securing the future of the Group for all its stakeholders (including customers, suppliers and employees), while at the same time enabling the existing shareholders to continue to retain an investment in the Company. However, the recapitalisation is expected to result in existing shareholders’ interests in the recapitalised and reorganised Group Airline being significantly diluted, subject to feedback from creditors, the new money providers and other stakeholders.
In order to obtain the necessary creditor consents to the proposed transaction, the Group will today launch three inter-conditional creditor schemes of arrangement of Group borrower companies to seek creditor consent to amend certain terms of the 2022 and 2023 senior notes indentures (the “Notes”) and the 2017 revolving credit facility (the “RCF Agreement”).
The key objectives of the amendments being sought pursuant to the schemes are to amend the consent thresholds to amend material provisions in the RCF Agreement and the Notes, including in respect of releases of relevant principal debt and/or subsidiary guarantees, and to make certain other technical amendments to facilitate implementation of the proposed transaction.
The proposed recapitalisation remains subject to certain matters, including credit approvals, investment approvals, agreement on Group performance conditions, due diligence, agreement as to risk allocation amongst Fosun and Group creditors with respect to the bridge financing during transaction implementation, agreement between Fosun and the Group’s core lending banks and noteholders on the separation of the Group into Airline and Tour Operator and timely execution of the separation, reaching agreement with a range of the Company’s stakeholders (including fuel and foreign exchange hedging counterparties, the pension fund trustees, noteholders, other financial creditors and approval of Fosun’s shareholders), licence renewals and receipt of regulatory and anti-trust clearances and approvals.
The current intention of the Board is to maintain the Company’s listing. However, the implementation of the proposed recapitalisation may, in certain circumstances, result in the cancellation of the Company’s listing.
Reflecting the extensive progress made on agreeing key commercial terms with the Group’s core lending banks and noteholders regarding the injection of £450 million of new money into the business in connection with the proposed recapitalisation, the mandate letter and term sheet for a £300 million secured bank financing facility announced in May 2019 will be allowed to lapse.
Given the substantial agreement regarding the commercial terms of the proposed recapitalisation, the Company has also agreed a cost cover arrangement with Fosun, a related party, with respect to the costs and expenses incurred by Fosun with any professional advisors in evaluating and negotiating the proposed recapitalisation. The maximum costs to be covered by the Company under this arrangement shall not exceed an amount equal to £5.43 million (less any amounts paid by the Company to Fosun during the past 12 months). The cost cover is payable on a weekly basis beginning 12 July 2019 and ending on 30 September 2019 (with the period accrued to date being paid retrospectively), unless terminated sooner in accordance with its terms, and is subject to certain milestones being reached in connection with the proposed transaction. This arrangement falls within Listing Rule 11.1.10R and this announcement is made in accordance with Listing Rule 11.1.10R(c). Arrangements have also been made to meet the reasonable adviser costs of its core lending banks, bondholders, and other appropriate stakeholders in connection with the proposed recapitalisation.
Thomas Cook Group plc is a British global travel company. It was formed on June 19, 2007 by the merger of Thomas Cook AG.
The airline group includes:
Thomas Cook Airlines (UK)
Thomas Cook Airlines Balearics
Thomas Cook Airlines Scandinavia
Thomas Cook Group operates across 16 source markets, employs 21,000 people and has generated a total of £9.6 billion in group sales in the year ended 30 September 2018. Thomas Cook has around 200 own-brand hotels and resorts across seven brands – SENTIDO, Sunprime, Sunwing, SunConnect, smartline, Casa Cook and Cook’s Club.
For the 2019 summer schedule the group is making these changes:
Group Airline with a total of four additional short- and medium-haul aircraft compared to summer 2018
Three further Airbus A321s in service for Condor as of early summer, one additional A321 to take-off for Thomas Cook Airlines UK
105 aircraft in UK, Scandinavia, Spain and Germany
The Thomas Cook Group Airline is taking delivery of two additional Airbus A321 aircraft, which will be added to the Condor fleet for the 2019 summer flight schedule.
The jets will be in service for Thomas Cook Airlines UK from winter 2019/20 afterwards.
The Group Airline recently announced to include two further Airbus A321 for summer 2019, and will have a total of 105 aircraft then. Its short- and medium-haul fleet has been expanded by four additional own aircraft in total compared to the previous year.
Two Airbus A321s fly for Condor and are stationed in Leipzig and Hanover in summer 2019. In Leipzig, Condor is significantly increasing capacity with around 100,000 additional seats to the Mediterranean, the Canary Islands, Turkey and Egypt. Another A321 is flying in Germany as well, the fourth airplane completes the A321 fleet of Thomas Cook Airlines UK.
Top Copyright Photo: Thomas Cook Airlines (UK) (Avion Express) Airbus A321-211 LY-VEC (msn 3267) TFS (Wingnut). Image: 946248.
The Thomas Cook Group has stated it is conducting a review of its airline division. The group wants to concentrate more on its hotels division.
The group also stated it would consider all options including a possible sale of the individual airlines.
The Thomas Cook Group airline division consist of three sun and beach focused leisure airlines: Thomas Cook Airlines UK, Thomas Cook Airlines Scandinavia, the German airline Condor Flugdienst GmbH and Thomas Cook Airlines Balearics.
The group issued this full financial report:
Fiscal first quarter trading statement for the three months ended December 31, 2018:
2018/19 started in line with expectations; strategic review of airline announced
First quarter revenue up 1% to £1,656 million2
Q1 underlying operating loss increased by £14 million to £60 million against a strong prior-year period – loss from operations on a reported basis increased £7 million reflecting lower separately disclosed items
Strategic review of Group Airline to increase financial flexibility and accelerate execution of our core strategy
1. Comments are based on like-for-like comparisons
2. Includes adjustment for IFRS 15 accounting change for Group Airline and residual amounts relating to the transfer of the Thomas Cook Airlines Belgium to Brussels Airlines and as such is no longer part of the Group
Peter Fankhauser, Chief Executive of Thomas Cook commented:
“As expected, the knock-on effect from the prolonged summer heatwave and high prices in the Canaries have impacted customer demand for winter sun. Where Summer 2018 bookings started very strongly, bookings for Summer 2019 reflect some consumer uncertainty, particularly in the UK, and our decision to reduce capacity which will both mitigate risk in our tour operator business and help our airline to consolidate the strong growth achieved last year.
“We’ve made further good progress in transforming our business with a rigorous focus on managing our cost base while innovating to deliver high-quality holidays for our customers. Our strategic alliance with Expedia is now live in all our key markets. In addition, we are set to open 20 new own brand hotels this summer, including three Casa Cooks and eight Cook’s Clubs, and have announced two new hotel projects with Fosun in China.
“At the same time, we recognise that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business. As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course.”
FIRST QUARTER PERFORMANCE
Group revenue was broadly unchanged in the first quarter, rising by 1% on a like-for-like basis to £1,656 million, led by strong customer demand for Turkey and North African destinations, offsetting weaker demand for Spain.
Gross margins were lower, reflecting a continuation of the highly competitive market conditions in the UK at the end of the summer season, and weaker demand for winter holidays in the Nordics.
As a result, the Group’s seasonal underlying loss from operations increased by £14 million on a like-for-like basis to £60 million. Currency translation movements during the quarter led to an impact of £4 million. On a reported basis, our loss from operations increased by £7 million, reflecting an improvement in separately disclosed items. The seasonal loss was led by the Group Tour Operator where a weaker performance in the UK and Northern Europe was partially offset by a good performance in Continental Europe. Our Group Airline continued to perform well, delivering a seasonal underlying loss in line with a strong comparative period last year.
Net debt at December 31, 2018 was £1,588 million. The Group has kept a healthy level of liquidity headroom over the important winter cash low period, maintaining a minimum buffer within our targeted range of £150 million to £200 million. In addition, our bank covenant tests as at 31 December 2018 were met.
CURRENT TRADING AND OUTLOOK
Trading for the Winter 2018/19 season is largely unchanged from the last update. Total bookings are up 8%, supported by higher volumes in the Group Airline as a result of the full season impact of extra aircraft acquired last spring. We continue to see strong demand for Turkey, Egypt and Tunisia as customers seek alternatives to high hotel prices in the Canary Islands. However, average selling prices are 10% lower overall, reflecting a higher mix of short and medium-haul airline volumes.
Group Tour Operator bookings are down 2%, with pricing 3% lower. Bookings from the Nordics and Continental Europe are lower than last year, in line with reductions in capacity. In the UK, charter risk bookings are in line with last year.
For the Group Airline, overall bookings are 8% ahead, in line with capacity increases. Bookings to short and medium-haul destinations are up by 10%, largely as a result of a growth in demand for Egypt. Long-haul bookings are up 3% with good demand for USA and Caribbean. Overall airline pricing is down 3% due to the mix effect of a shift towards short and medium-haul flying.
Our Summer 2019 program is 30% sold, slightly ahead of last year. Group Tour Operator bookings are consistent with the capacity reductions we have made across our markets to closely manage our risk capacity throughout the year. As a result, tour operator bookings are down 12%, helping to support pricing, which is up in all key segments, and 4% higher overall.
Group Airline bookings are below last year, as we have selectively reduced capacity in short and medium-haul destinations by taking in less wet-lease capacity. This is partially offset by good growth in demand to long-haul destinations. Average selling prices are up 6%, with higher yields in both short and medium-haul and long-haul.
We are addressing some of the challenges we faced in Summer 2018 by reducing our committed airline capacity for 2019 and increasing the focus on high quality, higher-margin hotels and destinations. In addition, we continue rigorously to drive down costs to give us greater operational flexibility, while remaining fully focused on our strategy, and managing our financial and commercial commitments.
We are making no changes to the full-year expectations set out in November 2018, reflecting the early stage in the year and limited visibility due to wider market uncertainty, particularly in the UK.
INTENSIFYING STRATEGIC FOCUS
Thomas Cook Group has undergone significant transformation over the last five years as we have streamlined our operations and focused on a clear strategy in both our Airline and Tour Operator businesses.
However, it is clear that we need greater financial flexibility and increased resources to accelerate the execution of our strategy of differentiation: to invest in strengthening our own-brand hotel portfolio; further digitising our sales channels; and driving greater efficiencies across the business. As a result, we are today announcing a strategic review of our Group Airline. We are at an early stage in this review process which will consider all options to enhance value to shareholders and intensify our strategic focus. We will provide an update on this process in due course.
Our strategy for the airline has been to profitably grow as a leading European leisure airline with a reliable, customer-focused service. This has involved a continuous review of our cost structure in order to stay competitive in a highly fragmented market. We currently operate a fleet of 103 aircraft, of which a quarter serve long-haul destinations. Our Group Airline delivered strong growth in 2018, despite facing industry-wide disruption.
We made good progress in strengthening our seat-only offer, and growing services to third-party tour operators. We carried over 20 million passengers and generated £3.5 billion in revenue, with underlying operating profits growing 37% year-on-year to £129 million.
Top Copyright Photo: Thomas Cook Airlines (UK) (SmartLynx Airlines Latvia) Airbus A320-214 LY-LCO (msn 1873) PMI (Ton Jochems). Image: 945605.
The new Spanish airline plans a start of flight operations this week.
Thomas Cook Airlines Balearics (TCAB) on March 20 was granted an AOC. This means that the new Spanish airline can formally operate as an airline. The AOC comes following months of preparatory work. The new Spanish airline will start flight operations on Saturday, March 24, according to current plans.
The new airline, Thomas Cook Airlines Balearics, is part of Thomas Cook Group Airlines’ growth plans, giving it a new base in its most popular destination from which it can provide flights to support its other airlines, according to seasonal demand. To ensure full integration the Board of Directors includes members of the senior team from Thomas Cook Group Airlines and is chaired by Paul Hutchings, Group Director of Flight Operations. Accountable Manager of Thomas Cook Airlines Balearics is Juan Manuel Gallego.
The new airline will commence operations with five Airbus A320 aircraft during summer 2018. These aircraft will initially take over short and medium-haul flights for Thomas Cook’s German airline Condor to replace third party aircraft leases.
This announcement of the new AOC follows the recent announcement of the granted AOC for Thomas Cook Aviation, the other new airline of Thomas Cook Group Airline, based in Germany, following the collapse of Air Berlin.
Top Photo: Thomas Cook Airlines.
Bottom Copyright Photo: Thomas Cook Airlines (Balearics) Airbus A320-214 EC-MTJ (msn 1954) PMI (Javier Rodriguez). Image: 941315.
Thomas Cook Group Airlines has launched a new airline, based in Majorca, to supplement its existing operations. Currently operating ongoing airlines in Germany, the UK and Scandinavia, Thomas Cook Group Airlines has applied for a new Airline Operator Certificate (AOC) in Majorca with the aim of scheduling the first flights from early 2018.
The new airline, Thomas Cook Airlines Balearics, is part of Thomas Cook Group Airlines’ growth plans, giving it a new base in its most popular destination from which it can provide flights to support its other airlines, according to seasonal demand. The new base in Majorca will provide the Group with greater operational flexibility at a competitive cost, while allowing it to maintain closer control over the quality and customer experience than its current third-party lease arrangements.
The new airline will commence operations with at least three Airbus A320 aircraft which previously operated for Thomas Cook Airlines Belgium. These aircraft will initially take over short and medium-haul flights for Thomas Cook’s German airline Condor to replace third party aircraft leases.
Christoph Debus, Chief Airline Officer Thomas Cook Group, said: “The new airline and base will provide us with the right platform to better manage the seasonal demand in our business, giving us more control at lower cost as we continue to expand the choice of destinations we offer our customers. With more than one million Thomas Cook customers flying into Palma every year, we have a strong existing infrastructure on which to build.”
This announcement of the new AOC follows the recent agreement with Air Transat for the exchange of aircraft on a seasonal basis to better balance the seasonal demand for short and medium-haul aircraft in the European and Canadian leisure airline markets.
Copyright Photo: Thomas Cook Airlines (UK) Airbus A321-211 WL G-TCDO (msn 7055) PMI (Ton Jochems). Image: 937660.