Thomas Cook India has acquired brand rights of the iconic UK travel firm from its erstwhile promoters for Rs 14 crore. After the acquisition, Thomas Cook will not undergo a name change in India and will now focus on business consolidation and new technologies, said company chairman Madhavan Menon on Tuesday.
Thomas Cook India has seen changes in its ownership over the years but operated the brand name uninterrupted since 1881. In 2012 when Fairfax acquired Thomas Cook's business in India, Mauritius, and Sri Lanka, it retained the right to use the brand name until 2024 upon paying an annual licence fee of Rs 2 crore.
The closure of Thomas Cook UK gave the Indian entity an opportunity to acquire brand rights for the three countries, doing away the need for a name change. Last month, Chinese travel firm Fosun acquired Thomas Cook brand rights for all other markets.
"Thomas Cook brand name in India is here to stay," Menon said. He said the company will not pursue the brand transition plan that was due for rollout next month. “A new brand identity would have cost us Rs 40-60 crore and the acquisition mitigates the need for a new identity,” he added.
Menon said the focus will be on business expansion and cost efficiencies. The company's core travel business has been under pressure following the closure of Jet Airways and the collapse of rival Cox & Kings.
Cox & Kings’ closure created a trust deficit among suppliers and customers but Menon sees the crisis abating.
The company’s stock has declined 30 per cent on a year-to-date basis but the management is hopeful of a price recovery. The completion of business restructuring, it feels, should help price recovery.
"The worst is over. We did not enter 2019 anticipating these challenges. Business is now looking better than the first two quarters. Demand for travel next summer is looking good," Menon said, hoping to grab a bigger share of travel business with the shutdown of Cox & Kings.
The April-September quarter contributes 60 per cent to the company's top line and operating profit. While revenue growth is slower, Menon hopes to maintain profitability in line with last year.