Fitch downgrades Thomas Cook

Fitch Ratings said it downgraded Thomas Cook Group plc's long-term foreign-currency issuer default rating and senior rating to B from BB- and removed the ratings from Rating Watch negative. The outlook is negative.

The agency said it downgraded the ratings because Thomas Cook's business and financial risk profile is higher than initially anticipated. Fitch said Thomas Cook has a limited margin of safety given the deterioration in the business and economic environment and relatively high execution risks in tackling its balance sheet issues while addressing weak consumer demand and tough competition from other tour operators, online travel agents and low-cost carriers.

The negative outlook reflects the fact that Thomas Cook's performance for 2012 is likely to remain under pressure due to ongoing political turmoil in North Africa and the Middle East and weak consumer spending in western Europe while the eurozone debt crisis remains unresolved, Fitch said.

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