Thomas Cook plans venture with Chinese company

Travel group Thomas Cook is looking to form a joint venture with a Chinese travel company to further its emerging markets strategy.

Chief executive officer Manny Fontenla-Novoa wants to move into the Chinese market by 2012, the Sunday Telegraph said.

The plans follow a deal announced by the tour operator last week to buy a 50.1 per cent stake in the former Russian travel agency, VAO Intourist.

China is the remaining part of Thomas Cook’s three-pronged emerging markets strategy. In 2008, the group bought back the Indian travel business it had sold to the Dubai Financial Group two years earlier.

The partnership with VAO Intourist will look to tap into Russia’s strong demand for beach and family holidays, particularly to Turkey and Egypt.

Thomas Cook will initially acquire the stake for a maximum of £28.5 million, with the option to purchase the remainder of the shares over the next five years.

Analysts expect today’s full-year results for Thomas Cook to show pre-tax profits down nearly 10 per cent at £278 million.