Manny Fontenla-Novoa: The bloke from Spain who wants you to take two weeks in Torremolinos

Lord only knows what Thomas Cook, the Baptist preacher and avid teetotaller who founded the eponymous travel firm in 1841, would make of Manny Fontenla-Novoa. Speaking in a broad west London accent, with only the occasional linguistic lapse hinting at his Spanish roots, the head of Thomas Cook's UK and Ireland operations is holding forth on everything: his love of Chelsea, his belief in package holidays, Saga, travel agents, even financial services. He looks like he enjoys a beer too.

But no doubt the good preacher would at least recognise good results when he saw them. The German-owned group revealed annual pre-tax profits of €105m (£72m) last week, against a €176m loss last year, thanks to a resurgent performance at the British business.

It is the first time Thomas Cook has turned a profit for four years. "We were a broken business," says Mr Fontenla-Novoa, 51, who became chief executive in 2003. "Our financial performance was poor, by any standard you care to use."

In 2001, nearly 160 years after Mr Cook's first trip - a train journey from Leicester to a temperance meeting in Loughborough, charging a shilling - the business was taken over by C&N Touristic. The deal made it Europe's second-biggest travel group, after fellow German organisation TUI (owner of Thomson), and C&N changed its name to Thomas Cook.

But it was a tough time to be buying travel businesses. Terrorism, war, Sars and the growing popularity of internet bookings all lay ahead, and the company began to struggle. "That's when we went for a really dramatic change," says Fontenla-Novoa. "We changed our brand strategy, our location strategy, and we reduced the number of managers in our organisation dramatically."

That did not mean dumping package holidays, however. Fontenla-Novoa points out that around 19 million of them a year are sold in the UK and he is a keen supporter of the model.

"It's drives me to distraction when people say the package holiday is dead. It's a robust market and it's profitable. It offers such great value. Name another part of any sector where you can buy a product and your money is totally protected. Consumers expect and value that."

Likewise, he's a champion of the travel agent. "Everybody thought that the new entrants - people like Expedia.com and lastminute.com - would totally dominate. I never bought into that. Not only do we have great brands but we have great people and a great product. The new entrants are seeing their business, not buckle as such, but certainly the rate of growth has slowed massively."

For all Fontenla-Novoa's bullishness, however, do-it-yourself travel is here to stay, and he is reducing the number of Thomas Cook travel agents from 615 to around 450 in the next three to five years. The group has also invested in other ways of selling its holidays, such as an interactive television channel and the internet.

But he is not looking to invest in the low-cost sector, and is instead in talks with a company, beleieved to be Barclaycard, about re-entering the financial services market, five years after Thomas Cook sold its Travelex bureau exchange business.

"We have this brand that people respect and trust and we have experience of financial services," says Fontenla-Novoa. "Thomas Cook has always been a retailer. We do a lot of money exchange and we already sell over one million travel insurance policies a year."

Some 200,000 people have Thomas Cook credit cards, run by MBNA, but they are used primarily as a marketing device and the company does not make money from them. Fontenla-Novoa will keep the credit card offer but also add car insurance and home loans.

He compares Thomas Cook to Saga, the over-50s business which offers everything from a radio station to insurance, and sees no reason why his brand cannot extend its reach in a similar way.

Fontenla-Novoa has spent his entire career in the industry, and the bulk of that with Thomas Cook, his first employer. He has worked for just two other firms, one of which was first travel entrepreneur Harry Goodman's International Leisure Group. When that went bust, Fontenla-Novoa and a handful of other executives set up Sunworld.

"From nowhere, it became the fourth-biggest tour operator in the country," he says. However, by the mid 1990s, the group was growing concerned about its lack of a retail arm. And, as luck would have it, Thomas Cook was also fretting about not having a tour operator business.

So a chance encounter on a train between Fontenla-Novoa and a Thomas Cook executive eventually lead to the sale of Sunworld to the group - at that stage owned by German bank WestLB - for around £50m.

"So I came back to Thomas Cook," says Fontenla-Novoa. "I intended to stay for the handover and then go and do it [start up a business] again - and here I am nine years later. What we have done at Thomas Cook, though, is like starting again."

Much is still to be done, one great set of results aside. Non-core businesses are being reviewed - including Club 18-30 and Neilson, the group's specialist ski business - and some could be put up for sale. A decision will be made by the end of the year.

There is also speculation that Thomas Cook's parent companies, Lufthansa and retailer KarstadtQuelle, are mulling a partial float. "They want us to behave and achieve results that will make us IPO-ready. The results mean we're making progress," says Fontenla-Novoa, though he stresses that does not necessarily mean a listing and says no decision has been made.

The group has also had a run-in with independent travel agents recently; it is cutting the amount of commission it pays them by 2 per cent this year, and yet further in the coming years.

"That seems quite harsh, but it's not about what you get paid - it's about your return," says Fontenla-Novoa. "Their earnings won't be affected. We're having lots of meetings with our partners. We want to provide them with value for money and they have to provide us with value for money too."

He seems capable of taking problems in his stride, however, because that's what he's been doing since he was 11. He had a wealthy upbringing in Spain, but when the family business went bust, his parents quit the country and moved to Fulham ("before it was posh"). Suddenly, he was an immigrant, unable to speak the language. He admits that his education suffered at first.

Yet he tells the tale with no hint of rancour. And anyway, it would appear the Spanish-born UK resident has found another home altogether at the German-owned Thomas Cook. A conversion that would make any preacher proud.

BIOGRAPHY

BORN: 13 May 1954.

CAREER

1972: joins the printing department of Thomas Cook. Goes on to hold a variety of roles, including director of retail accounting.

1988: joins International Leisure Group, set up by travel entrepreneur Harry Goodman.

1991: Co-founds Sunworld.

1996: Sunworld sold to Thomas Cook.

2003: Chief executive, Thomas Cook UK & Ireland.

2005: Joins Thomas Cook AG's management board.

Other roles: director of Iberostar, the Spanish hotel group; director of travel organisation Springboard; trustee of the Variety Club.