Thomas Cook profits impacted by rise in fake sickness claims

Thomas Cook profits impacted by rise in fake sickness claims

The boss of Thomas Cook has revealed a surge in fake holiday sickness claims has had a direct impact on the company’s profits.

The operator reported a group-wide rise in revenue of 9% to just over £9billion in its year-end results today, but said UK margins were down due to a more competitive market environment, especially for holidays to Spain.

Speaking after the results were announced, chief executive Peter Fankhauser admitted sickness claims had “influenced” the lower margins, along with cost inflation which led to higher bed costs and a weakened pound.

Fankhauser would not reveal the number of claims the business had received but said he did not expect to see the same level of claims next year.

“We’ve seen a massive drop in claims and the action we have taken to prevent this fraud is going to have an impact,” he said.

“We don’t expect to have the same (level of claims) next year but we still have work to do.”

He said the company had not received any fake claims from its German customers.

Meanwhile, holiday prices for Spain are expected to increase by up to 10% next summer.

Fankhauser said those looking for a cheaper alternative should look to Turkey and Egypt.

Just over 42% of all Thomas Cook holidays sold were to Spain this summer but Fankhauser said he expected this to go down as capacity was re-directed to other destinations such as Egypt. Historically, around 30% of its holidays sold were to Spain.

He said Cook’s Tunisia programme was selling “reasonably well” since it announced it was returning to the destination after the FCO relaxed its travel advice in the summer.

“We started with a small programme, the hotels are all handpicked, but it’s not as big as it was,” he added.

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