A business is always subjected to conditions and events in the outer environment. Political decisions, international crisis, economic issues and legal implications, may all take a toll on a business’s future. Following the recent Tunisia shootings, and the financial crisis in Greece, several companies seem to have been hit negatively. One of these companies is Thomas Cook. The airline company is forecasting a fall of some £25m in its profits because flights to Greece and Tunisia are certainly far from being popular at this time.
Thomas Cook reported just a £3m as operating profit for its third quarter, compared to the £50m reported for the same quarter of last year. This is not a surprise following people’s fear in relation to the Tunisia shootings. There have been thousands of cancellations by would-be tourists over the past few weeks since the tragic shootings took place. This was further intensified following the British Government’s warning that another attack was likely. The company ended up evacuating more than 15,000 people on some 60 flights following the attack.
Thomas Cook has also ended up with a 13% fall in its share price because of the shootings. The company decided to cancel all trips to Tunisia until next October. To top this up, there have been very weak summer bookings by travellers who decided to travel to Greece, mainly because of the country’s financial crisis. Greece has yet to agree to a third financial bailout from international creditors. Moreover, with the effects of a weaker euro, additional damage on the company’s profitability is being expected.
This is certainly not a nice period for Thomas Cook, which is ending up struggling with these incidents, through no direct fault. Nevertheless, the company is still forecasting that there will be some profit growth in respect to the 2014/15 financial year. This is mainly attributed to the fact that there were some 78% of summer 2015 holidays sold. The company is still hoping that the Tunisia situation will improve a bit in the coming months.
As the CEO of the company, Mr. Peter Fankhauser commented, Thomas Cook was certainly being impacted to significant shocks. However, he was still maintaining a positive attitude for the firm’s future because after all terrorist attacks could happen anywhere. A few weeks ago it happened in Tunisia, and it is normal for people to be frightened and understandably reluctant to travel to that country. However, in time it will pass. Just as other terrorist attacks happened in Paris, Madrid and London, and there was a fall in tourists to those countries at the time. But Tunisia will still manage to recover after some months pass because it is a holiday destination that gives value for money, and people are well aware of that. In the meantime, the company will surely try to come up with ways to make up for the fall in flights to Tunisia and Greece by focusing on other avenues. This is what a responsive and adaptable business is all about – and that is one of the main reasons behind any business’s success.
