Pre-close trading update

31 March 2015

Pre-close trading update

Trading in line with expectations

Highlights

· With the Winter 2014/15 season now almost fully sold, and Summer 2015 more than 50% sold, the Group is trading in line with management's expectations

· The UK business continues to trade ahead of last year, with significant bookings growth resulting from robust demand particularly for our Winter Sun holidays

· Trading in Continental Europe and Northern Europe, while still tough compared to last year's strong performance, has improved since we reported our first quarter results

· Demand for holidays to our Concept Hotels is growing, with bookings up by 20% versus prior year

· Bookings on thomascook.com are up by 10% compared to prior year, reflecting continued progress in our digital initiatives

· Airlines Germany continues to grow strongly, especially in the long haul sector

Peter Fankhauser, Chief Executive of Thomas Cook, commented:

"Our bookings for the full year are developing well, especially in the UK and Airlines Germany. The tough trading conditions we reported previously in some markets are showing early signs of improvement, and our New Product and Winter Sun initiatives are leading to growth. I am confident that, by continuing to rigorously implement our strategy, we will further improve business performance."

Current trading

Winter 2014/15

The Winter season is concluding in line with our expectations, with the UK continuing to trade well ahead of last year in volume terms, and booking trends improving in both Continental Europe and Northern Europe since we reported our last trading update with our first quarter results. Across the Group Winter is now 95% sold, 1% ahead of this time last year, while average selling prices are 2% lower due to product mix changes.

Airlines Germany continues to perform well with bookings up by 10% and load factors ahead of last year, while price pressure in the short and medium haul sector has led to an average selling price decline of 2%.

Note: Based on cumulative bookings as at 21 March 2015

* The Winter Season in Northern Europe runs from October to March, while in other segments it runs from November to April

Summer 2015

Summer 2015 trading is developing satisfactorily, with improving trends seen across most markets since our last update. The season is now 54% sold for the Group as a whole, 2% higher than this time last year. Total bookings are 1% lower than last year, with a similar decrease in average selling prices.

UK bookings are 4% higher than last year, in a continuing robust trading environment. Average selling prices are 1% lower overall due to an increased proportion of seat only sales reflecting our capacity management plans and customer demand for more flexible product. Within the product mix, charter risk pricing has improved by 2% compared to last year.

In Continental Europe trading for Summer has improved since we last reported, with Summer bookings now 4% lower than last year against a strong comparative, particularly in Germany. Pricing is in line with last year's levels and market conditions continue to show signs of gradual improvement, consistent with a later booking pattern this year.

Northern Europe bookings are 5% lower than last year due to a planned reduction in capacity to better manage yields, and due to continued macroeconomic weakness in Norway. As in Continental Europe, trading is gradually improving confirming a later booking pattern this year.

Airlines Germany continues to perform well despite intense competition in the short and medium haul sector. Bookings to date are 8% higher than last year, with prices up 1% and load factors in line with last year.

Note: Based on cumulative bookings as at 21 March 2015

Growth in web bookings and Concept Hotels

In line with our profitable growth strategy, our Concept Hotel model is expanding rapidly in most markets. Across the Group, bookings to Concept Hotels, which are mostly exclusive to Thomas Cook, are up by approximately 20% so far this financial year, with particularly strong growth in the UK, Germany, Netherlands and Belgium.

We continue to make progress online. For thomascook.com, bookings are up 10% overall compared to prior year, while conversion is up 19%, reflecting improved site efficiency. Our early investment in mobile is yielding results, with mobile and tablet bookings up 63% and conversion on these devices up 39%. Mobile and tablet bookings now represent one third of the total, up from around 20% last year, with bookings made on desktop computers comprising the remainder.

Fuel and foreign exchange

The Group operates a rolling programme of hedging to smooth fluctuations in the price of fuel and currency, in order to provide greater price certainty when planning for current and future seasons. The proportion of our forthcoming requirements for Euros, US Dollars and Jet Fuel that have been hedged are shown in the table below.

As at 21 March 2015

The Group's policy is not to hedge the translation impact of profits generated outside the UK. If current rates for Euro and Swedish Krona were maintained throughout the remainder of FY15, there would be a negative year-on-year translation impact of approximately £25 million.

Outlook

Although conditions remain tough in many of our markets, with pricing pressures caused by excess airline capacity and intense competition, trading in Continental Europe and Northern Europe is improving while the UK business continues to perform well. We are confident that our strategy of profitable growth through our new product and digital initiatives, supported by cost efficiencies, will lead to further improvements in business performance. We therefore continue to expect further growth in FY15, consistent with our expectations at our full year results in November, on a constant currency basis.

Forthcoming announcement dates

The Group intends to announce its results for the six months ended 31 March 2015 on 20 May 2015, and to announce its third quarter results on 30 July 2015.

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