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BRITISH TRAVEL GROUP Thomas Cook has declared bankruptcy after failing to reach a last-ditch rescue deal, triggering the UK’s biggest repatriation since World War II to bring back tens of thousands of stranded passengers.
The 178-year-old operator, which had struggled against fierce online competition for some time and which had blamed Brexit uncertainty for a recent drop in bookings, had been desperately seeking £200 million (€227 million) from private investors to avert collapse.
The news leaves a reported 600,000 tourists stranded worldwide, including around 150,000 holidaymakers seeking help from the British government to return home.
In a statement published in the early hours of the morning, Thomas Cook said that “despite considerable efforts” it was unable to reach an agreement between the company’s stakeholders and proposed new money providers.
“The company’s board has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect,” the statement added.
The UK government has hired planes to fly home British tourists.
“Following the collapse of Thomas Cook and the cancellation of all its flights, Transport Secretary Grant Shapps has announced that the government and UK Civil Aviation Authority has hired dozens of charter planes to fly customers home free of charge,” a statement said, describing it as the largest repatriation in peacetime history.
“All customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home as close as possible to their booked return date,” the government added.
Irish customers will also be covered by this repatriation programme as their initial flights would have departed from the UK.
Ireland’s Commission for Aviation Regulation said any Irish customer who purchased from the Thomas Cook group and are due to return to the UK on or before 6 October will be accommodated on a new flight.
This will be either on a flight operated by the UK’s Civil Aviation Authority or on existing flights with other airlines.
After 6 October holidaymakers will have to make their own travel arrangements. The CAR has advised people to keep their receipts as they should be entitled to reimbursement under the UK’s ATOL scheme.
For anyone who has not yet gone on their holiday, most are now cancelled and customers should not go to the airport.
If you booked a Thomas Cook package through an Irish travel agent, you should contact them.
Both a tour operator and an airline, the travel giant’s key destinations were in Southern Europe and the Mediterranean but it also offered holidays in Asia, North Africa and the Caribbean.
Thomas Cook chief executive Peter Fankhauser called it a “deeply sad day”, with thousands of jobs lost.
“It is a matter of profound regret to me and the rest of the board that we were not successful,” he said.
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world,” he added in the group’s statement.
22,000 jobs
The firm’s creditors held a marathon meeting on Sunday to try and work out a deal, followed by a meeting of the board of directors.
Reports said a collapse of the group would mean the repatriation of 600,000 tourists, including around 150,000 seeking government help returning to the UK.
Two years ago, the collapse of Monarch Airlines prompted the British government to take emergency action to return 110,000 stranded passengers, costing taxpayers some £60 million on hiring planes.
As well as the grounding of its planes, Thomas Cook has been forced to shut travel agencies, leaving the group’s 22,000 global employees – 9,000 of whom are in Britain – out of a job.
Chinese peer Fosun, which was already the biggest shareholder in Thomas Cook, agreed last month to inject £450 million into the business as part of an initial £900 million rescue package.
In return, the Hong Kong-listed conglomerate acquired a 75% stake in Thomas Cook’s tour operating division and 25 percent of its airline unit.
“Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution for its proposed recapitalisation with other affiliates, core lending banks, senior noteholders and additional involved parties,” the Chinese group said in a statement to AFP on Monday.
Cabinet maker Thomas Cook created the travel firm in 1841 to transport temperance supporters by train between British cities.
It soon began arranging foreign trips, being the first operator to take British travellers on escorted visits to Europe in 1855, to the United States in 1866 and on a round-the-world trips in 1872.
Thomas Cook grew into a huge operation, becoming both a tour operator and an airline, but fell into massive debt despite recent annual turnover of £10 billion from transporting about 20 million customers worldwide.
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That is a scary number of job losses in an industry already under pressure, also now only leaves one major tour operator on the British high street I think, TUI, I sense a further swing to online operators
@Vocal Outrage: believe it or not but some people still like to go into the local travel agents to book the family holiday.. Low deposits and paying it off by the week is very appealing to some people..
@David Garland: some people liked buying CD’S too and look what happened there.
It’s generational thing. But their days are numbered. Online bookings have taken over
@James O Donoghue: So you reckon it’s only the older generation that book in the retail shops? All ages go into travel agents and book holidays because sometimes it’s cheaper and as I pointed out if you’re booking five flights and a hotel you can pay €50 deposit and pay it off as you go. All the leaving cert students book in travel agencies and they’re the generation you think are booking online.. Flights and park passes to Disneyland for example cost thousands, they can be booked with low deposits but need to be paid in full if booking yourself online..
@Vocal Outrage: TUI are german.
@David Garland: Yeah you’re right there actually. I’m in college and that’s exactly what a friend of mine and myself did this summer. Being college students and only having money from summer jobs, we paid a €50 deposit and paid the rest weekly for a month or so
@David Garland: As far as I’m aware there are online agents that you can do the same with, deposit followed by installments.
@David Garland: I believe that was my point, the Thomas Cook closing it further limits the options for physically going into a travel agents as opposed to doing it all online. Plus, many independant travel agents would have worked with Thomas Cook as effectively a wholesaler to reduce costs.
@Terrence Edwards: but they are a major player in terms of physical travel agents upon the British high street are they not? I was looking from a consumer perspective, rather than where they maybe headquartered?
@Diarmuid Hunt: Many do. But it’s a rip off. If you have a bank, credit union or post office account you’re far better off getting a loan and paying off the holiday in full. Roughly 8% average APR with financial institutions, versus for example 29.9% APR with lastminute.com.
@Vocal Outrage: TUI will have a monopoly now which is good for nobody. The entire finance industry needs new regulations.
Britain is such a wonderful country we won’t need to travel to those gasthly countries in Europe to holiday anymore. We will travel the Queens highway to holiday in her kingdom or visit the off shore island of Ireland. Sorted.
@Manbackonboard: is that because your mastery of the English language suits you better in English speaking locations?
@GerryCummins: well ya, except when I go to kerry. What language do they speak there??
Very sorry to see this. Have never used them for a package but we flew to Mexico with them earlier in the year and it was by far the nicest experience I’ve had on a plane. Staff couldn’t have been friendlier or more accommodating.
Can’t beat b&b in Kerry
@Joe Shea: Ah you can for sure. Look at Killarney, an awful dump.
@Jesus Christ: Tralee is worse but Kerry in general is one of the best. Beautiful places to visit
Jesus Christ you can’t be serious?
@Joe Shea: half the price abroad and somewhere sunny
@Joe Shea: Ah, shure, ya can go Shpain for a fortnight for fifty quid and the sun is guaranteed.
Don’t forget that travel insurance folks. Its getting all to common this last few years. Sad to see so many people lose jobs
Thomas Cook has been in trouble since last year, its strange that people kept booking holidays with them. Always check a travel company’s financial background before booking and get your travel insurance the day you book your holiday not a few days before you travel.
How about a few lines in the Impact in Ireland – number of Irish jobs lost – Number of Irish stuck abroad – lazy journalism .
@Roots Green: maybe it’s not known yet. They’re journalists not script writers.
@Jesus Christ: no harm in making up a few numbers to tied us over until facts are known. Keeps the story edgy and engaging….
The dangers of running tight margin business when you still maintain large overhead costs. Business and commerce are changing at a really fast pace and if you can’t react quickly enough, you’ll fail hard.
9,000 jobs gone in the UK overnight is a tough pill to swallow and, at this time of year, prospects in the holiday space aren’t great to say the least.
@Dara O’Brien:
Agreed! Sad that after 178 years this global brand has had to cease trading. With 90 days credit being granted to TC by the hotels, it needed a strong constant pipeline of punters to keep the house of cards stable. Brexit, declining value of Sterling, direct booking via Internet…TC business model was an accident waiting to happen.
Fosun’s first €450m investment deal of last month appears to have been executed, per the article, with those 75% and 25% acquisitions. Painful, unless post-collapse benefits have been factored in eg Brand Acquisition for one Pound.
It’s not at all like very astute Chinese Investors to get caught in such a short time span on an investment.
@Rory J Leonard: there would be a lot of assets left in the company and as existing major shareholder and now primary debtor they should get their pick of them- including 30+ Airbus a320s only purchased last year…
@Rory J Leonard: actually I’ve just checked and their fleet in worth in the region of 3.25 billion…
@Lainie Ed: I would say they are leasing the aircraft. I was on a TUI plane last week. On boarding, if you look at the plate above your head walking into the cabin, it says something like this plane is leased and owned by Well Fargo Bank.
Probably blame the Backstop and Brexit.. Sorry to see so many out of work and lost holidays
@Joseph Molloy: I’m in Spain at the moment where it has affected a lot of people. Unbelievably, many Brit ex pats are whinging that the EU should have stepped in to save the company!!! Presumably just add the cost to the Brexit divorce bill that may never be paid?
@Paul Shepherd: I saw a show about interviewing a load of Old English people in southern spain that ahd voted for Brexit. When they were told their pets would need passports, their medicals wouldnt be covered, they would probably need a tourist visa etc etc, they were all going “Huh, what?” They don’t seem top realise they have shot themselves in the foot.
They are rightly Thomas Cooked!
@David Van-Standen: Down the Thomas Crapper!
One of Boris’s “bumps on the road”
Bye now!
Capitalists playing with people’s lives… acting like this wasn’t on the cards.
Thomas Cook to Thomass Crook
O Learey won’t have difficulties replacing staff now
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