Thomas Cook to Slash a Tenth of Payroll amid Record Losses

Thomas Cook, Germany´s second-largest tour operator, will furlough ten percent of its workforce (as many as 5,000 employees) as a result of record-setting losses the company has endured for a second year in a row and that´s tallied 251 million euros ($341 million), the front office informed in Frankfurt.

Back in 2002, the company´s shortfall rose to 119.5 million euros ($149 million) following the crisis in the travel industry sparked off by the 9/11 terrorist attacks in the United States, the war in Afghanistan and the struggle against international terrorism.

One out of ten employees will get the ax in a process that will reach into 2005, company officials informed. Thomas Cook is run on a fifty-fifty basis by Lufthansa Airlines and Karstadt-Quelle, a chain of department stores specialized in catalog-oriented sales.

Executives of Lufthansa and Karstadt-Quelle (whose main trademark is Neckermann) have indicated no plans to dissolve Thomas Cook.

TUI, the world´s number one tour operator, is going through a similar situation. Its execs, though, have voiced intentions to give the company further autonomy and responsibility in pursuing better results in an array of marketing fields.

Alltours, Germany´s fourth-biggest travel agency, was the only company that put good numbers on the scoreboard during the 2002-2003 season. Thanks to a belt-tightening policy of cost and price handling, Alltours nicked a 43.8 percent spike (before tax deductions) for a grand total of 21 million euros ($26.5 million).

Alltours´s sales soared in double digits to 1.2 billion euros ($1.5 million). And the implementation of a luring pricing policy also edged the company past some of its top competitors with 6.2 percent more customers (1.37 million travelers).