Bookings over the winter are holding up.
After issuing three profit warnings last year and needing to be bailed out by its lenders twice after fears of a debt default, the next big threat to Thomas Cook (LSE: TCG) was that scared customers would desert it in droves.
In fact, rival TUI Travel (LSE: TT) attempted to capitalise on that theme by releasing newspaper ads proclaiming that it is not in financial difficulty and it's safe to book with them.
But thankfully, it appears that has not happened. In an interim statement issued today, Thomas Cook revealed that bookings in the quarter ended 31 December have held up, and that revenue actually grew by 3%, to £1.86bn, from the same quarter last year.
Chief executive Sam Weihagen told us: "I have been encouraged by how our bookings have developed, particularly in the UK where our market share for both the winter and summer seasons remains broadly stable."
Seasonal loss
A winter season loss is always expected in the travel business, but investors might gulp when they learn that this quarter brought a loss of £91m, against last year's £37m loss. However, that was pretty much in line with expectations, and in a competitive low-margin business, small swings in fortunes can make big differences.
The UK turnaround plan includes the sell-off of 200 of the poorest performing high-street shops, and that appears to be going well, with a cost-saving of £35m expected in the current year.
In addition, the firm's majority stake in Thomas Cook India is now to be sold, so that should hopefully make a big contribution to chipping away at that mountain of debt.
The market seems a little more confident today in response, with the share price up 7% to 13.9p at the time of writing, though that's still more then 90% down since trading troubles came to light.
Not out of the woods
So, will it be make or break for Thomas Cook?
A month ago I'd have been just on the 'break' side, seeing the high-street trading model as anachronistic in these increasingly online days. But I am pleasantly surprised that bookings are holding up, as I was among those expecting something of a collapse. I'm starting to think they might just make it now.
But I do think the closure of those 200 shops needs to be just the start of a proper review of high-street business, as "walk in and talk" just isn't the way package holiday selling is going.
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