After thrusting three profit warnings to shareholders in a single year, his move will not come as a surprise to the industry.
Last month the package holiday supremo announced that operating profits would fall £60m below previous forecasts of £380m and prompted the share price to fall by more than a quarter.
This has forced the group to sell more than £200m (€228m) of assets – including several hotels and its foreign exchange business in India – in a desperate bid to shore up its finances.
Sam Weihagen, Mr Fontenla-Novoa's deputy, will become interim CEO while the hunt is on for his successor.
The fortunes of Thomas Cook are a telling tale of how badly the travel industry has been hit in recent months by the recession, rising fuel costs and instability in popular tourist destinations in North Africa and the Middle East.
Subsequently, families have scaled back foreign holidays in favour of domestic options such as stays in the Isle of Wight. After all, watching rioters in Greece and uprisings in the Middle East makes glamping in the West Country, look very attractive.
Surely the ill fated adverts featuring Jamie and Louise Redknapp snuggling in the sand was the final nail in the coffin for Mr Fontenla-Novoa, who has been at the helm of the company since 2007.
It’s been a depressing time for the company which should be celebrating its 170th birthday this year.
Mr Fontenla-Novoa should have paid more attention to the former preacher Mr Thomas Cook, who started his empire in 1841 with from an organised 13 mile train journey from Leicester to Loughborough for Victorian adventurers.
Perhaps time for Mr Fontenla-Novoa to buy a ticket to his birthplace Galicia, northern Spain, to seek solace and inspiration?