Holiday giant Thomas Cook survived the turbulence from chief executive Harriet Green’s shock departure but has been hit by new payouts to passengers whose planes are delayed.
The benefits of cheaper fuel and its own cost-cutting were countered by lower holiday prices and the extra compensation in the final three months of last year, the company said.
After a court ruling in the late summer, European airlines were made to include mechanical delays among factors forcing them to compensate delayed passengers.
Thomas Cook said this was now costing it around £1.5 million a month.
“We have cut lengthy delays by around 50% and are continuing to improve our on-time record,” said new chief executive Peter Fankhauser.
“But this legislation is hurting us badly.”
That showed in gross profits flat on a like-for-like basis at £327 million in the quarter on revenues up 24% at £1.5 billion. Gross profit margins were 0.3 percentage points lower at 21.6%.
Bookings from UK customers for both winter and summer holidays are ahead of last year particularly on premium packages and holidays to the US but trading conditions in Europe remained tough.
The shares fell 4.5% to 127.2p.
