The new boss of Thomas Cook pledged the company would turn a corner as the travel giant’s turnaround plan pushed it to an “unacceptable” loss of £590m.
The travel company is counting the cost of restructuring as it reorganises its UK business, cuts its aircraft fleet and sells off hotels.
But Harriet Green, who joined the company as chief executive earlier this year from Leeds-based electronics firm Premier Farnell, insisted the wider headline loss for the year to September 30 masked an improvement in the last three months.
Thomas Cook said that winter bookings are ahead of committed capacity in all markets at improved prices.
The group has been hit hard by the economic downturn, high fuel costs and social unrest in popular destinations.
It has had to renegotiate bank loans and make disposals to cut debt.
Underlying operating profit fell 49 per cent to £156m in the year to September 30, in line with forecasts. Revenue fell 3.2 per cent to £9.49bn.
Restructuring costs saw its pre-tax loss widen 22 per cent to £485m.
“These results reflect the major issues that Thomas Cook faced last year.
“They mask the material improvement that we made in the fourth quarter,” said Ms Green.
“Thomas Cook, in my opinion, is not broken. It is viable and working, and we have turned the corner.”
The group’s net debt fell £103m to £788m, much better than a forecast of little change.
The company said it would fall at least another £50m in its 2012/13 year.
Peel Hunt analyst Nick Batram said: “Net debt was lower than we had expected, and this should give some confidence that the new management team can deliver.”
He added: “Nevertheless, while the upside from getting it right is significant, the task remains substantial.”
Ms Green, who has said technology will be the group’s salvation with its online business set to be the key distribution channel, will unveil a full turnaround plan for the group in the spring.