Thomas Cook tumbles after sickness bug strikes

Thomas Cook shares took a further battering on Monday after newspaper front pages revealed 18 British tourists were on IV drips last night after falling ill at one of its hotels in Cuba, which suffered a similar outbreak last year.

Shares in the company fell 5.23% by 3pm to 163p.

Holidaymakers reported under-cooked meals, birds in the restaurants and birds droppings in food, and filthy pools and toilets at Cuba's Hotel Playa Pesquero in Holguin.

Just last month Thomas Cook agreed compensation of £150,000 to 20 holiday-makers who suffered food poisoning at the same hotel last year.

Reports said 80% of residents at the 944-room hotel have been taken ill, with one person hospitalised according to the Foreign Office, but the hotel is taking bookings.

The holiday company is also under the cosh from potential strike action over job losses, which could hit flights in the summer. The level of stewards and stewardesses on its planes is going to be reduced by one person for each plane, taking manning to the minimum allowed under EU rules. The job losses will come from adjusting seasonal recruitment and natural attrition.

The cabin staff union, Unite, is balloting its members in a consultative ballot for strike action. It says that 74% regularly missed their breaks on flights last summer, and that despite reduced staffing levels, cabin crew will still be expected to deliver the same trolley sales targets as last year.

Thomas Cook revealed in March that it had sold around half of this year's summer holidays with bookings up 3%, with average holiday prices down 2% as shorter breaks have proved more popular.

The travel agent, under chief executive Harriet Green, is just past the half-way stage in a three-year turnaround programme aimed at reducing debt, having been saved by a £1.4 billion refinancing package from its banks in 2012.

Since taking over in 2012, Green has cut 2,500 jobs, hundreds of high-street shops and the scale of its airline. Further cuts are expected to come in its IT, HR and procurement departments.

First-quarter losses for the period to 31 December fell by £10 million to £56 million despite the impact of the Egyptian political situation on bookings, but it was solely the result of cost cutting as revenues were £15 million lower at £1.66 million.

Chartists have been noticing the stock's deterioration recently, saying its 21-day Price Crosses Moving Average is indicative of an established bear trend.