Europe’s second-largest tour operator, Thomas Cook, is in the black for the first time in four years thanks to a resurgent performance from its British package holidays arm. The German-owned group, which includes Club 18-30 and the ski specialist Neilson, made profits of €105m (£72.3m) in the 12 months to October, compared with a €176m loss the previous year. Britain contributed a 5% increase in sales to €2.5bn and turned in the best level of profitability across the group.

Thomas Cook took 13.2 million people on holiday last year, second only in Europe to Thomson Travel’s owner, TUI. The average holiday cost €515 (£350). But the group admitted yesterday that it needed to “realign its business” to compete with low-cost airlines and cut-price internet deals on hotels. Thomas Cook’s chairman, Thomas Holtrop, said: “We are gradually departing from the ideal of an integrated leisure travel group. Not because the model itself was bad but because it has outlived its usefulness. It no longer conforms to the needs of a time characterised by excess capacities and falling prices at airlines and hotels.”

He has set targets of increasing sales by 4% annually and raising earnings by 5%-10% a year. He said all Thomas Cook’s businesses needed to achieve a return on sales of between 3.5% and 4%.

The company revealed last week that up to 325 jobs were likely to go in Britain through a merger of its mass market and Signature city tours business. Recent reports have suggested Thomas Cook also wants to sell Club 18-30, its holiday firm which has attracted controversy for its pub crawls and “booze cruises”.

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