LONDON • The world's oldest tour operator Thomas Cook said yesterday it was willing to sell its airline business to raise cash and fund its fight back from a torrid 2018 amid signs of a tough 2019.

The 176-year-old firm was brought to its knees last year when a heatwave in northern Europe deterred holiday makers from booking lucrative last minute deals, leading to two major profit warnings and talk of a need to raise funds.

The British group said that rather than launch a rights issue, it would consider all options for the most successful part of the business to enable it to invest in its own hotels, improve its digital sales offering and drive further cost savings. "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," chief executive Peter Fankhauser said.

The Group Airline comprises Germany's Condor, and United Kingdom, Scandinavian and Spanish divisions. It operates 103 aircraft and posted a 37 per cent rise in operating profit last year to £129 million (S$225.8 million).

Thomas Cook said it had made progress in managing its cost base but bookings for this summer reflected uncertainty, especially in Britain. Last year's winter trading was hit by the long hot summer, with fewer customers willing to book holidays and average selling prices fell 10 per cent. This summer, tour operator bookings fell 12 per cent though pricing was slightly higher.

Its underlying loss from operations in the three months to the end of December expanded to £60 million. Net debt stood at £1.6 billion and it said it had met its bank covenant tests. The group had a market valuation of £478 million at the close on Wednesday.

It reiterated its full-year outlook.

The airline business fared much better than the tour operator segment last year, and grew its profit by £35 million. The tour operator business profit fell £88 million.

REUTERS