Thomas Cook sells planes to boost cash position

Chief Executive Sam Weihagen said on Friday the aircraft disposals provided substantial additional liquidity against a backdrop of a difficult trading environment.

"As expected, the first-half seasonal losses have widened. However, summer bookings have improved in recent weeks," he said.

"Whilst our booking position for the second half is more encouraging, trading will be dependant on how well the group performs during the important lates market (short-notice bookings)," the group added.

Shares in Thomas Cook, which had net debt of 1.39 billion pounds as of March 31, were down 4.7% at 20.4 pence by 1146 GMT.

Shore Capital analyst Karl Burns said whilst the sale and leaseback deals would help its cash balance, debt ratios were unlikely to be affected, given that the leases would be capitalised.

"We retain our 'hold' recommendation, given the significant likelihood of an equity raising," he said.

The company, which appointed ex-Kwik-Fit finance boss Michael Healy as chief financial officer on Wednesday, said UK bookings for the summer season were down 9%, ahead of capacity reductions of 13 percent, while average selling prices were stable, with a 4% rise.

Trading in western Europe, and notably in France, was challenging, it said, while in northern Europe bookings were down 6% but had continued to improve.

The group's seasonal loss from operations for the six months to end-March widened to 262.7 million pounds from 165.8 million pounds.