Tunisia's terrorist attack and Greece's crisis will cost Thomas Cook £20 million

TUI, the parent company of travel agents Thomas Cook and First Choice Travel, just confirmed that the terrorist attacks in Tunisia and the escalation of uncertainty over the fate of Greece is going to lose the company £20 million ($US31.2 million) this year.

The group said in its third quarter results statement that the attacks on holiday makers in Tunisia in June, which led to 38 people being killed when a man open fire on a beach, as well as the uncertainty over the fate of Greece just before its referendum in July, is going to hurt its bottomline.

TUI’s CEO Peter Long said in the group’s results statement:

This quarter was marked by the tragic events in Tunisia at the end of June. Supporting our customers, their families and our colleagues through this sad time remains our highest priority. We are very proud of the commitment and dedication our colleagues have shown throughout this unprecedented situation. Recent weeks have also seen continued economic uncertainty in Greece. Within our business model there is an inherent assumption that we will face a level of disruption as a result of external events.

We are continuing to deliver our growth strategy as the world’s leading tourism business. In spite of the events in Tunisia and Greece, we have continued to -deliver strong growth in underlying EBITA.

TUI has already stumped up £7 million ($US11 million) in repatriation and cancellation costs following the Tunisia tragedy. 33 of the people who died in the attack were on TUI holidays.

Long told the BBC this morning:

This is the most tragic event and loss of human life that I have ever had to deal with or my company and we remain deeply shocked in terms of the loss of life, those customers that were injured and all the trauma that our customers had to go through, through these terrible events.

We were 100% focused on making sure that our customers were looked after and that was our number one priority.

In terms of Greece, the company added that while Greece’s crisis is having a knock-on effect on its full year’s results, it has “seen an improvement in bookings in more recent weeks and cumulative bookings remain ahead of prior year.”

Overall, TUI reported a profit of €49.4 million (£35.2 million, $US54.9 million) for the third quarter, compared with a loss of €5.6 million (£4 million, $US6.2 million) in the same period last year. Revenue also rose by 6% to €5 billion (£3.6 billion, $US5.6 billion) from the same quarter last year.

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