HOLIDAY firm Thomas Cook’s shares surged more than 10 per cent after Lufthansa said it would make a bid for its airlines business.

The move by Carsten Spohr, chief executive and chairman of the German airline, to highlight its intention to bid for part or all of the travel agency’s airlines business was seen as significant after a series of .more speculative reports of interest.

Thomas Cook put its profitable airlines business up for sale earlier this year after a string of warnings last year.

It was claimed last week that Thomas Cook Group had moved to secure a £400 million back-up from its lenders as it prepares to report results it is feared will hit home the extent of the challenges facing the wider package tour industry.

Lufthansa has now said it will make an offer for Thomas Cook’s German airline Condor with an option to acquire the remaining airlines of the British travel group.

Mr Spohr added, however, that it was unlikely a single buyer could acquire all Thomas Cook airlines due to competition regulations and declined to comment on the offer price.

He said: “We decided yesterday in the meeting of the management board to bid for all of Condor with the option to be able to extend this (bid) to all Thomas Cook airlines.”

Thomas Cook put its airlines business up for sale in February after profit warnings in 2018 put it in the position of potentially seeking funding.

The travel group’s airlines business consists of Germany’s Condor, as well as British, Scandinavian and Spanish operations.

It was reported earlier this month that Indigo Partners and Lufthansa were those most interested in the business, with a deadline of May 7 set for expressions of interest.

Mr Spohr said earlier that the company will be an active player in consolidation among European airlines.

Lufthansa, which owns airlines including Swiss and Austrian Airlines, has also expressed its interest in Italian flagship carrier Alitalia. Mr Spohr said that Lufthansa would only be interested in the loss-making company if it were restructured and the Italian government left out.
Thomas Cook shares also responded positively on the announcement of the review in February, and a number of potential suitors were said to be considering a takeover of the company.

It was reported that several potential bidders had been circling the package holiday provider regarding a takeover of its tour operating unit and the entire company.

Thomas Cook said at the time it was exploring options to potentially sell its airline business amid concerns over the company’s future.

The travel giant said that in its strategic review of its airlines arm it will look at “all options to enhance value to shareholders”.

Its airlines in the UK, Scandinavia and Germany were all placed under review.

Thomas Cook was hammered by charges related to flight disruptions, write-downs on money owed by hotels and business change costs.

It was also hit by a change in demand for its tour holidays due to the summer heatwave.

Thomas Cook operates 103 aircraft, carrying more than 20 million passengers, and generated £3.5 billion in revenue last year, with underlying operating profits growing 37% to £129m.

As the review was announced Thomas Cook reported a 1% rise in first-quarter revenue to £1.65bn, which had been led by strong demand for Turkish and North African destinations, in turn offsetting weaker demand for Spain.

Condor employs more than 4,000 people and currently operates a fleet of 50 aircraft from seven operating bases.

Fresh reports suggested the firm was in negotiations with its bankers for £400m to help create room for maneouvre ahead of half-year results which are due later this month.

Thomas Cook shares rose 10% at one stage and closed up 6% at 23.01p.

Source: https://www.heraldscotland.com/business_hq/17623809.lufthansa-to-bid-for-holiday-firm-thomas-cooks-airline-business/