Shock departure of Thomas Cook chief executive
Thomas Cook Group chief executive Manny Fontenla-Novoa has resigned with immediate effect.
The shock announcement came in a statement to the London Stock Exchange this morning as the Group released its interim management statement.
Sam Weihagen, currently chairman of the Northern European segment and deputy to the Group CEO, will take over the role of chief executive until a permanent successor is found.
Chairman Michael Beckett said: "The Board would like to thank Manny for his contribution to the Group. He leaves with our very best wishes for the future.
"In Sam Weihagen, we have a highly successful and experienced executive and the Board has every confidence in his ability to lead the Group until a new CEO is appointed."
Fontenla-Novoa added: "Thomas Cook and its people have a sound heritage and I have been proud to have been part of the company."
Fontenla-Novoa has led Thomas Cook since 2007 following its merger with MyTravel, having joined the company upon the acquisition of Sunworld in 1996, but in recent months he has come under increasing pressure from the Group's institutional investors to step down.
Some have blamed Fontenla-Novoa for the company's plunging share price and shrinking profits and they have questioned his decision to merge Cook's retail operation with The Co-operative Group and Midlands Co-op to create the UK's largest high street travel retailer.
In his interim statement to the Stock Exchange today, Beckett said: "The Board is focused on restoring market confidence in the Group, which has been impacted by concerns over debt levels and the poor performance of our UK business.
"We are taking actions to strengthen the balance sheet, including a disposal programme that we expect to realise up to £200m. In addition, Sam Weihagen's extensive experience in the travel industry will be invaluable in guiding the UK through its strategic and operational review."
Cook's underlying operating profit for the three months to June 30 was £20.1m, compared with £25.8m in the same period last year. The Group said its results were impacted by a weak performance in the UK and the impact of the Middle East uprisings, which it estimates cost it £25m in the quarter and it expects a similar impact in the fourth quarter.
In the UK, its average selling price for summer 2011 is up 4% year on year but margins are still lower. Its capacity has been reduced by 1% and it has 5% fewer holidays left to sell than this time last year, it said. Its winter 2011/12 programme is 22% sold.
The Group estimates its full year underlying operating profit to be in line with expectations at around £320m.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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