Shares in the troubled holiday firm plunged after pre-tax losses widened from £303 million a year earlier and it warned second half earnings would be hit amid tough trading over the key summer period.
Boss Peter Fankhauser said there was “now little doubt” that Brexit had caused UK holidaymakers to postpone their summer travel planning, with no pick-up since the EU withdrawal deadline was put back by six months.
He also confirmed the cash-strapped group has received “multiple” bids for its airline, which was put up for sale in February to help shore up its finances.
Thomas Cook is slashing costs further in the second half in the face of tough trading and higher fuel expenses, including axing 150 roles from its head office in Peterborough.
It also signalled possible further store closures, having already announced plans in March to shut 21 stores and axe 320 retail roles.
Mr Fankhauser said the group is keeping its 566-strong estate under review.
He said: “The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.
“The continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins.
“This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year.”
Thomas Cook now expects underlying earnings to fall over the second half and put pressure on full-year results as holiday firms cut prices to boost Brexit-hit demand and costs of fuel and hotels rise - marking its third profit warning in less than a year.
The debt-laden company has struggled recently, as a fall in demand for package holidays and intense online competition resulted in a string of profit warnings.
Mr Fankhauser said customers are “having a great deal this summer” as a price war rages in the sector.
But the group confirmed it had secured a new additional £300 million financing deal with its lenders to help boost its balance sheet.
Its interim results showed the steep losses came after it booked a £1.1 billion writedown on the value of its MyTravel business, which it bought in 2007, saying it revalued the business “in light of the weak trading environment”.
Figures also revealed a slump in customer numbers during the first half, down 295,000 to 2.9 million.
The firm has sold 57% of its summer holidays, while tour operator bookings are down 12% for the summer season.
Its airline bookings are down 6%.
The group remained tight-lipped on bidders for the airline business, but names in the frame include Lufthansa and Virgin Atlantic.
Russ Mould, AJ Bell investment director, said Thomas Cook’s mounting woes raise the prospect of a possible bid for the firm.
He said: “Times are tough for travel operators at the moment and the problem for Thomas Cook is that its ability to navigate a difficult market is hindered by its unwieldy borrowings.”
Thomas Cook’s latest trading statement makes for grim reading, according to Laith Khalaf, a senior analyst, Hargreaves Lansdown.
He said in a note: “ The travel operator was already reeling from last year’s warm summer, only to be hit by a downturn in consumer demand in Sweden and Germany. Trading in the UK market is also challenging, with consumers delaying holiday plans until there’s some clearer direction on Brexit.
Mr Khalaf added: “With last year’s heat wave fresh in the memory, many British holidaymakers will no doubt be thinking it’s best to stay put this summer. The one glimmer of good news is that the company has secured £300 million of fresh funding.”