Yesterday, Fitch downgraded Thomas Cook’s rating to B from BB-. The ratings were placed on Watch Negative in November 2011. The outlook assigned to the current B rating is Negative. The downgrade reflects Thomas Cook’s higher operational and financial risk profile given the deterioration in its business and economic environment as well as relatively high execution risks in tackling its balance sheet issues amidst weakening consumer demand.
The Negative outlook reflects Fitch’s view that the company’s performance for 2012 is likely to remain under pressure due to on-going political turmoil in MENA, weak consumer spending in Western Europe and the Eurozone debt crisis.