Thomas Cook

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Britain's squeezed middle are cutting back on holidays to the Canary Islands and similar destinations, adding to the woes of Thomas Cook. The world's oldest travel company has seen a 10% drop in bookings for mainstream summer holidays – its core business of sending families off on package tours to such destinations as the Canaries and Balearics. The Association of British Travel Agents said it was an industry-wide trend, with a drop in "mainstream, squeezed-middle, bucket and spade in Spain-type holidays" as families cut back in the downturn. It is just one of the many problems faced by Thomas Cook, which also failed to announce a new chief executive on Wednesday, despite assurances someone would be appointed to the job by the end of March. Thomas Cook shares have slumped 86% over the past year as it issued a string of profit warnings, leading to the departure of former chief executive Manny Fontenla-Novoa. In November, it was plunged into a fresh crisis when grim trading forced it to turn to its lenders for financial help. The banks came through with a £200m lifeline but many of Thomas Cook's problems persist. The company has long suffered from the rise of online travel agents, as well as continuing pressure on consumer spending. Analysts say its well-publicised financial troubles have also damaged its reputation with hoteliers and customers. Investec, which rates the shares a "buy", said on Wednesday: "Thomas Cook is facing continued difficult trading conditions across Europe and it needs to rigorously address its cost base, particularly in the UK. This is made more difficult without a permanent chief executive and we are disappointed that an appointment has not been announced today." Overall bookings for summer 2012 were down 2% in the UK, with the drop in mainstream holiday bookings partially offset by a 14% increase in specialist and independent holidays. Thomas Cook said all-inclusive holidays were selling particularly well, because they helped...
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