Thomas Cook Group Plc said it would sell a distributor of long-haul scheduled flights as the world’s oldest tour operator pared its first-quarter loss by 15 percent amid a three-year turnaround program.

Thomas Cook sold the Dubai-based Gold Medal unit to air- travel services company Dnata for 45 million pounds ($74 million), the London-based tour operator said in a statement today. The deal is expected to complete around Feb. 27, it said.

Chief Executive Officer Harriet Green is refinancing debt under a turnaround plan to improve margins, closing underperforming stores, cutting costs and selling non-core assets, including the sale of Elegant Resorts this month for 14.3 million pounds. The company has gradually lifted a cost savings target to 440 million pounds by fiscal year 2015.

“This latest transaction represents another important step in the transformation of our U.K. business,” Green said in the statement. “It brings the total amount generated by our divestitures program to 125 million pounds.”

Dnata is part of Dubai-based Emirates Group, owner of the world’s biggest airline by international traffic.

Further Disposals

Thomas Cook had set a target of achieving 100 million pounds to 150 million pounds in disposals by the end of the 2015 fiscal year. Further disposals may come from the strategic review undertaken last year, Green said on a call today.

The company’s shares fell as much as 3.3 percent and were down 2 percent at 181.70 pence as of 8:57 a.m. in London.

Separately, Thomas Cook reported an underlying first-quarter loss before interest and taxes of 56 million pounds, narrowing from 66 million pounds a year earlier. Net debt fell to 1.29 billion pounds from 1.56 billion pounds. “Liquidity headroom” consisting of undrawn committed facilities and available cash at 31 Dec. rose 84 million pounds from a year earlier to 374 million pounds.

Rival Tui Travel Plc, Europe’s largest tour operator, said Feb. 6 it narrowed its loss in the three months through December after reducing its offering in France and to Egypt to reflect reduced demand. The company has been shifting more sales online where bookings gained 8 percent for the coming summer season.

Thomas Cook’s first-quarter sales fell 0.9 percent, or 15 million pounds, reflecting lower demand for winter travel to Egypt. Excluding Egypt, affected by political tensions, sales in the period advanced 4.1 percent year on year. A slow rebound in bookings from British, German and Russian travelers to Egypt was “encouraging,” Green said.

Thomas Cook plans to announce further cost cuts in May and will set its dividend policy at the end of its initial turnaround period in September 2015, Green said.

–Editors: Robert Valpuesta, Alastair Reed

To contact the reporter on this story: Robert Wall in London at

To contact the editor responsible for this story: Benedikt Kammel at

Photo Credit: Thomas Cook aircraft are seen parked on the tarmac at Manchester airport in Manchester, northern England, November 22, 2011. Phil Noble / Reuters