The tour operator reported a loss before tax of £1.5bn for the six months to March 31, compared to a loss of £303mln a year ago.
The larger loss largely reflected a £1.1bn impairment related to the revaluation of the MyTravel business, which it merged with in 2007, following poor trading.
Revenue dropped to £3.0bn from £3.2bn last year with the tour operator business down 4% to £2.3bn and the airline division down 8% to £1.2bn.
On a like-for-like basis, revenue edged up 4%, with the tour operator unit down 91% and the airline arm up 98%.
"The first six months of this year have been characterised by an uncertain consumer environment across all our markets,” said chief executive Peter Fankhauser.
“The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer.”
Winter bookings rise, summer bookings fall
Bookings for the group’s 2018/19 winter programme were up 7%, driven by demand for trips to Turkey and Egypt.
However, average selling prices were down 9% due to more people taking short- and medium-haul holidays as opposed to higher margin long-haul trips.
For summer 2019, the programme is 57% sold while bookings are down 12% compared to a year ago but pricing is up 2%.
Thomas Cook continued to see strong demand for cheaper holidays to Turkey, Egypt and Tunisia for this summer but bookings to the Spanish Islands are lower following its decision to reduce its tour operator capacity there after being hit by tough competition.
In the UK, Brexit uncertainty led to softer demand for summer holidays across the industry. Continental Europe bookings are lower due to weaker demand in Germany.
Northern Europe bookings are also running behind capacity cuts due to tough market conditions in Sweden.
Weaker trading resulted in free cash outflows of £839mln, compared to £718mln a year ago. Group net debt at the end of the period was £1.2bn, up from £886mln last year.
The company has secured a £300mln bank facility to provide additional liquidity for the winter 2019/20 season, subject to the sale of its airline business.
'Multiple bids' received for airline business
In February, the firm announced plans to offload its airline business following a strategic review.
Fankhauser said on Thursday that the group has received “multiple bids”, including for the whole or parts of the airline business.
Lufthansa has said it would make an offer for the travel firm’s German airline Condor with an option to buy Thomas Cook’s remaining airlines.
“As we assess these bids, we will consider all options to enhance value to shareholders and intensify our strategic focus,” Fankhauser said.
The company has closed 21 UK retail stores in response to the growing shift online. As part of its efforts to cut costs, it is also reviewing its foreign exchange division, Thomas Cook Money.
Fankhauser said “a range of further cost efficiencies” are planned for the second half to allow for investments.
Second half earnings expected to fall
"As we look ahead to the remainder of the year, it's clear that, notwithstanding our early decision to mitigate our exposure in the 'lates' market by reducing capacity, the continued competitive pressure resulting from consumer uncertainty is putting further pressure on margins,” he said.
“This, combined with higher fuel and hotel costs, is creating further headwinds to our progress over the remainder of the year."
Thomas Cook now expects underlying earnings (EBIT) in the second half to be behind the same period a year ago.
In morning trading, shares dropped 15% to 19.5p.
"Thomas Cook’s latest trading statement makes for grim reading," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
"The travel operator was already reeling from last year’s warm summer, only to be hit by a downturn in consumer demand in Sweden and Germany."
The analyst added: "The measures Thomas Cook is taking to get itself back on track look sensible, but with so many challenging factors outside its control, it’s still a hostage to fortune.’"