Interim Management Statement

11 February 2010

Thomas Cook Group plc

Interim Management Statement since 1 October 2009

Manny Fontenla-Novoa, Group CEO, said:

"We are pleased to report a £30.5 million reduction in seasonal loss before tax for the first quarter, as a result of lower exceptionals and finance charges. The operating loss before exceptional items of £41.3 million was £13.9 million higher than the prior year, mainly as a result of planned capacity reductions. The full year results are underpinned by our strong summer programme weighted towards higher margin, medium haul destinations. As a result of this and our cost reduction plans, we are confident that the Group will perform in line with Board expectations.

"Winter trading is trending towards our planned capacity reductions and prices have been largely stable since we last reported. In recent weeks, bookings for the summer 10 season have improved significantly, marking a positive response to our current marketing campaigns and highlighting the resilience of the summer holiday."

Overview of financial performance and position (Income Statement attached)

Revenue for the first quarter of the 2010 financial year was down 6% (12% on a constant currency basis), largely reflecting the planned capacity reductions in our winter 09/10 mainstream travel programme. As a result of the reduced capacity and higher fuel costs, the first quarter seasonal loss from operations before exceptional items increased to £41.3 million (2009: £27.4 million loss).

Despite higher average debt levels, net finance charges fell to £19.1 million (2009: £27.3 million). This resulted from the timing of income recognition on the marking to market of forward points on our foreign currency hedging of £6.9 million and reduced interest rates.

The Group incurred exceptional items of £14.2 million in the period, a significant reduction on £46.9 million in the prior year. The costs incurred largely reflect the restructuring programmes which commenced in 2009.

As a result of the lower finance costs and reduced exceptional items, the seasonal loss before tax was reduced year on year by £30.5 million to £81.5 million.

Our fuel and foreign exchange hedging is as follows:

·; For winter 09/10, we are hedged: dollar 97%; euro 95%; and fuel 96%;

·; For summer 10, we are hedged: dollar 91%; euro 96%; and fuel 79%.

Despite the capacity reduction, the operating cash outflow in the first quarter was broadly in line with last year. December is typically close to the cashflow low point in the year as a result of the normal seasonal working capital outflows. Nevertheless, headroom under the Group's facility, as at 31 December 2009, was a comfortable £326 million.

Outlook

We expect the winter season trading to trend towards reduced capacity levels. However, with full year results underpinned by a strong summer programme, weighted towards higher margin destinations, and cost reduction plans, we are confident that the Group will perform in line with Board expectations.

Recent bookings for both winter and summer have recovered well following the disruption caused by poorweather conditions across Europe and particularly in the UK, at the start of the January peaks period. We are underpinning our margins by reducing input costs across all our markets.

Winter trading has continued largely in line with previous trends, with bookings moving towards planned capacity reductions and prices in line with those reported at the beginning of the period. Aircraft utilisation was good, with average departed load factors across the Group broadly in line with last year.

Note: Figures as at 6/7 February 2010. In Continental Europe, bookings represent all bookings including cars/overland. However, capacity represents airlines seat capacity only. Northern Europe winter season is October-March. Excludes independent, non-risk businesses.

UK: The winter programme is now 77% sold, broadly in line with last year. Average selling prices are up 6% with an 8% increase in the last four weeks. Bookings are trending towards planned capacity. We have continued to rebalance capacity towards higher margin, medium haul destinations which now represent 82% of our winter programme. The proportion of customers opting for our more profitable all-inclusive holidays is up 11% and demand for 4* and 5* has also increased.

Continental Europe: Year on year cumulative bookings in the Continental Europe segment have improved overall since we last reported. While the average selling price is down 6%, margins are being maintained through a combination of input cost management and a shift in mix to higher margin holidays.

In Germany, our largest market in Continental Europe, cumulative bookings are down 7% but booked load factors are 3% ahead of the prior year. We are confident that bookings will trend to planned capacity. Average selling prices are down 9%, but margins are ahead of last year.

In the West and East markets within Continental Europe, the trading varies significantly by geography but is particularly strong in the Netherlands. Overall cumulative bookings are down 11% but average selling prices are down 4%, driven by a shift in mix away from long haul.

Northern Europe: Overall trading is going well. Bookings are trading ahead of planned capacity and average selling prices are up 11%, including a benefit from currency translation.

North America: Mainstream passengers represent around a half of total passengers in the peak winter season as independent is now such a large part of our business. Following a slow start, bookings have been improving.

Airlines Germany: Bookings are down 3%, but have improved over recent weeks and we are now 75% booked for the winter season compared with 73% last year. Yields are down 10%, reflecting competitive pricing and lower fuel surcharges following a fall in fuel prices. This is not, however, fully reflected in Condor's fuel costs as part of the fuel consumption was hedged 12 to 18 months ago.

Summer 10

Poor weather, particularly in the UK, led to a slow start in the early weeks of the January peak season sales. Bookings are strengthening and we are confident that they will continue to improve. Price negotiations with our accommodation suppliers are progressing well and will help underpin margins.

Note: Figures as at 6/7 February 2010. In Continental Europe, bookings represent all bookings including cars/overland. However, capacity represents airlines seat capacity only. Northern Europe summer season is April-September. Excludes independent, non-risk businesses.

UK: We have focused our summer capacity on higher margin medium haul destinations which achieve significantly higher margins than long and short haul.

·; Overall capacity cut by 3% representing an increase in medium haul offset by the decrease in lower margin short and long haul;

·; Cumulative booking position in line with capacity reductions;

·; Average selling prices also reflect the shift in mix away from higher priced long haul to lower priced but higher margin medium haul;

·; Booking trends in the last four weeks peaks period are up 15% at improved margins compared to pre-peaks and prior year, validating our sales intake strategy.

 As a result of these actions, we are in a strong position both in terms of product left to sell and margin as we move towards summer.

Our independent (non-risk) businesses, whose statistics are not included in the table above, are trading well ahead of last year with bookings doubled at Hotels4U and up around 40% at Gold Medal Netflights Retail.

Continental Europe: Bookings have been relatively resilient, with lower selling prices funded by reduced input costs. Load factors are up 2% in Germany and 8% ahead in the West and East European markets. Capacity planning reflects the appetite we are seeing. Nevertheless, we retain a high level of flexibility due to our asset light business model.

In Germany, bookings are down 3% and although prices are 3% lower, margins are holding up. In the West and East European markets, bookings and average selling prices are flat. France has recorded strong bookings following the launch of its new product, Club Jumbo.

Northern Europe: While Denmark remains particularly challenging and the later booking pattern persists, we are confident, as we move into our peak booking period, that bookings will trend to capacity which is planned to be down 1%. Average selling prices are up 8% including a benefit from currency translation.

North America: The summer programme launched only this month.

Airlines Germany: Bookings are down 2% compared with last year and booked load factors are also down 2%. Yields are down 3% reflecting competitive pricing and lower fuel costs.

Gold Medal

Following the purchase in April 2009 of a 50.01% interest in Gold Medal, a leading UK independent travel company, Thomas Cook agreed to acquire the remaining 49.99% in December 2009. The consideration payable is £47.5 million and comprises a £25 million non-interest bearing loan note redeemable between April 2011 and October 2011, and £22.5 million to be realised through a series of call and put options between January 2010 and October 2010.

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Group Income Statement

All revenue and results arose from continuing operations.

Notes to financial information

1. Basis of preparation

The information has been prepared using the accounting policies stated in the Company's report and accounts for the period ended 30 September 2009.

A copy of the statutory accounts for the period ended 30 September 2009 will be delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985.

2. Impact of exchange

At constant exchange rates, revenue is down 12%, gross profit is down 4% and other operating costs are broadly in line against prior year. Overall the impact of exchange translation on the loss before exceptional items is minimal.