Thomas Cook's trading for summer 08 continues to be strong in all major markets with robust consumer demand as the tour operator reported in its results for the 6 months ended 31 March 2008, while winter 08/09 early trading in the UK and Northern Europe is encouraging. Manny Fontenla-Novoa, Chief Executive, Thomas Cook Group plc said: “I’m delighted with our performance over the winter and we are in a very good position for the summer. The rising cost of fuel and translational impact of the fall in Sterling against the Euro have made achievement of our Euro-denominated results more difficult, but I remain confident that we will achieve our goals for this year. For the longer term, our strategy is on track, our merger synergies are coming through, and we continue to target €620m of operating profit in 2009/10.”

Other highlights of Thomas Cook performance:

• Group currency adjusted pro forma loss from operations for the 6 months to March 2008 reduced to 193.6m euro (28% improvement).
• Group fuel requirements for remainder of this financial year hedged to 100% for crude and 90% for jet fuel. Group foreign currency requirements for remainder of year 100% hedged.
• 2008/09 fuel and foreign currency requirements hedged in line with policy - crude - 80%; Dollar - 65%; Euro – 56%.
• On track to achieve merger synergies in excess of 200m euro by 2008/09, despite depreciation of Sterling against Euro of 15%.
• Strategic acquisitions of Thomas Cook India, businesses in the Middle East, Hotels4U.com and Elegant Resorts.
• Despite the higher cost of fuel and the translation impact of the weakening Sterling, and assuming no further deterioration in the Sterling:Euro exchange rate, the Board remains confident that the business will meet its expectations for the current financial year.

Current trading - Summer 08

Trading for summer 2008 has been strong in Thomas Cook's main markets and the Group has started the season with an excellent capacity left to sell position which puts it in good stead for the rest of the financial year.

In the UK, capacity is currently 10% lower. "We currently have 18% fewer holidays to sell than at this time last year, which should stand us in good stead in the lates market. We are particularly encouraged by our much lower level of stock left to sell in short haul and long haul. Average selling prices are currently 3% ahead," said the Group.

The reduction in capacity in long haul is largely due to the increase in the aircraft seat pitch. In addition, the Group has exited unprofitable routes to China and other long haul destinations as part of our review of flight programmes.

Northern Europe summer 2008 trading has continued well, with bookings currently 7% ahead year on year on capacity up only 2%. Average selling prices are 9% ahead. In Continental Europe, summer 2008 trading to date is strong. Total bookings are up 3% with average selling prices now 3% higher year on year.

In Germany, through improvements in capacity management, Thomas Cook now has significantly fewer holidays on risk to sell than in the prior year. Trading in Belgium has also continued well. Bookings are currently slightly behind the prior year but selling prices are well ahead. In the Netherlands, bookings are ahead of the prior year with average selling prices in line.

Trading in France, where volumes are much lower, is very strong with increasing bookings and average selling prices. In the Eastern markets (Poland, Hungary and the Czech Republic), Thomas Cook continues to grow the businesses and trading is in line with the Board's expectations.

In North America, where the summer season is the low season for the charter market and capacity is therefore limited, trading is satisfactory.

Airlines Germany capacity overall is 9% lower, with the largest reduction the result of eliminating unprofitable city routes. The booked load factor is up 2%.

Winter 08/09

Winter 08/09 holidays are now on sale in the UK and Northern Europe. In the UK, bookings are currently 4% ahead of the prior year, and margins are encouraging. Consumer demand appears to be robust. In Northern Europe, Thomas Cook has seen a strong start, with bookings 11% ahead and average selling prices 2% ahead year on year.

Acquisitions

Thomas Cook has made three significant acquisitions, with a major entry into new emerging markets and two smaller acquisitions to further develop its independent travel business. All these acquisitions are expected to meet the Group’s acquisition criteria in respect of of earnings accretion by year two and exceeding the cost of capital by year three.

In March, the Group announced the acquisition of up to 74.9% of the issued share capital of Thomas Cook India Limited, 100% of Thomas Cook branded business in Egypt and licences for the Thomas Cook brand in 15 Middle East countries. The total cash consideration for these acquisitions will be between 208 million euro and 249 million euro subject to the outcome of an open offer process for up to 20% of Thomas Cook India shares which will commence on 16 May 2008 and close on 5 June 2008. The acquisition of 54.9% of Thomas Cook India shares has already been completed in a private transaction with Dubai Financial Group LLC.

As a result of the above transactions, the Group now has global control of the Thomas Cook brand, which is one of the world’s most widely recognised travel brands. India is one of the fastest-growing travel markets, expanding by 15% per annum. Thomas Cook India is already the largest foreign exchange business and the second
largest travel company in India. Thomas Cook is confident that as part of the Group, this business will be a significant contributor to profits growth.

In February 2008, the Group announced the acquisition of Hotels4U.com for an initial consideration of £21.8 million, net of amounts to be reinvested by Haim Perry, Managing Director, and Jacky Bedlow, Finance Director. The management’s reinvestment is subject to earn out arrangements based on the profitability of Hotels4U up to 2013.

Through the acquisition of Hotels4U.com, the Group is able both to enhance its position in the independent travel sector and strengthen its mainstream business. Hotels4U is the UK’s largest independent bed bank. It sells exclusively over the internet, providing accommodation and resort transfers to over 500,000 customers per annum. It has access to more than 30,000 hotels internationally. In April, the Group announced the acquisition of Elegant Resorts Ltd, the number one UKbased luxury travel company, in a further move to develop our independent travel business.

Condor

It was announced in March 2008 that the Bundeskartellamt (Federal Cartel Office) had extended the deadline for completion of its primary evaluation of the merger of Condor Flugdienst GmbH, the Group’s German airline, and Air Berlin plc, until 9 June 2008. This extension was made in order to allow Thomas Cook and Air Berlin
to continue their discussions with the Bundeskartellamt case team with a view to agreeing appropriate undertakings from the parties in order to obtain the consent required for the merger to proceed.

The Group is currently evaluating its position in the event that the transaction we have announced does not receive the necessary clearance from the Bundeskartellamt.

Condor remains a strong business, which gives the Group a number of options in respect of the future development of the business.