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Thomas Cook is to return to European ownership after its Chinese owner agreed a deal to sell the UK travel company to a Polish rival five years after it collapsed.
Chinese conglomerate Fosun will sell Thomas Cook, except for its business in China, to eSky, a Poland-based search engine and reservation system provider for airlines, for a total of up to £30mn, Fosun said on Thursday.
Founded in 1841, Thomas Cook fell into insolvency in 2019 after failing to negotiate a £1.1bn rescue deal causing travel chaos around the world, leaving the UK government to repatriate 150,000 stranded customers. Fosun acquired Thomas Cook later that year when it paid £11mn for the company’s brand and intellectual property assets.
Fosun said in a filing to the Hong Kong stock exchange that “the online travel agency business in the United Kingdom . . . does not align with the core competencies and strategic focus of the group”.
With investment from Fosun, which was Thomas Cook’s biggest shareholder before it collapsed, the British tour operator was relaunched in 2020 as an online-only holiday brand. UK rival Hays Travel had acquired about 550 Thomas Cook outlets on the high street.
“eSky has got experience in flights, whereas we’ve got great experience in the sourcing of hotels,” Alan French, chief executive of Thomas Cook, told the Financial Times. “Bringing that together is clearly an opportunity as the package holiday business is maturing.” French will continue in his role.
Thomas Cook posted a pre-tax loss of £3.6mn in 2023, down significantly from the previous year’s loss of £13.5mn, as it “pivoted from a focus on growth to focusing on trading profitably,” according to a June filing to Companies House. French said he expected a full-year profit this year.
The eSky deal comes as the travel sector enjoys strong demand after the pandemic, even as inflation and the cost of living crisis has hit discretionary spending of consumers.
Fosun was among the Chinese conglomerates that aggressively expanded overseas before the pandemic, acquiring assets such as French resort group Club Med and the English Premier League football club Wolverhampton Wanderers.
However, the group has since been selling non-strategic and non-core assets since 2022 as high interest rates have strained its highly leveraged structure. The company plans to reduce interest-bearing debt to around Rmb60bn ($8bn) to regain an investment-grade credit rating.
“It’s essential to maintain strong cash flow and steady development for a stable future,” said chair Guo Guangchang during an earnings briefing last month. “Surviving today is key to seizing tomorrow’s opportunities. Therefore, we are focused on reducing heavy assets.”
Founded in 2004, eSky wants to grow its business from an online flight aggregator to a packaged holiday provider combining flights and hotels. Majority-owned by MCI Capital, a private equity firm focused on Central and eastern Europe, it operates in more than 50 countries.
The deal would provide Thomas Cook with “access to eSky’s superior flight inventory and will support its continued growth”, Thomas Cook said.
