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Travel group Thomas Cook collapses: What next and why?
Friday, September 27, 2019 IST
Travel group Thomas Cook collapses: What next and why?

HIGHLIGHTS
 
The firm ran hotels, resorts and airlines for 19 million travellers a year in 16 countries, generating revenue in 2018 of 9.6 billion pounds ($12 billion)
It currently has 600,000 people abroad, including more than 150,000 British citizens
 

 
 

LONDON: Thomas Cook, the world's oldest travel firm, collapsed on Monday, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.
 
What happens now and why did it collapse?
 
Who is affected?
 
The firm ran hotels, resorts and airlines for 19 million travellers a year in 16 countries, generating revenue in 2018 of 9.6 billion pounds ($12 billion). It currently has 600,000 people abroad, including more than 150,000 British citizens.
 
Thomas Cook employs 21,000 people and is the world's oldest travel company, founded in 1841. The company has 1.7 billion pounds ($2.1 billion) of debt.
 
What happens to tourists?
 
The British government has asked the UK Civil Aviation Authority to launch a repatriation programme over the next two weeks, from Monday to October 6, to bring Thomas Cook customers back to the UK.
 
"Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavour to get people home as close as possible to their planned dates," it said.
 
A fleet of aircraft will be used to repatriate British citizens. In a small number of destinations, alternative commercial flights will be used.
 
The civil aviation authority has launched a special website, thomascook.caa.co.uk, where affected customers can find details and information on repatriation flights.
 
For those customers not flying from Britain, alternative arrangements will have to be found. In Germany, a popular customer market for Thomas Cook, insurance companies will coordinate the response.
 
What is the advice to passengers?
 
"Customers currently overseas should not travel to the airport until their flight back to the UK has been confirmed on the dedicated website," the civil aviation authority said.
 
"Thomas Cook customers in the UK yet to travel should not go to the airport as all flights leaving the UK have been cancelled."
 
What did the CEO say?
 
"I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years," Thomas Cook CEO Peter Fankhauser 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."

 
 

The liquidation
 
Thomas Cook said it had entered compulsory liquidation and an order had been granted to appoint an official receiver to liquidate the company.
 
AlixPartners UK LLP or KPMG will be appointed as special managers for the different parts of the business.
 
Why did it collapse?
 
Hurt by high debt levels, online rivals and geopolitical uncertainty, Thomas Cook needed another 200 million pounds on top of a 900 million pound package it had already agreed, to see it through the winter months when it receives less cash and must pay hotels for summer services.
 
The request for an additional 200 million pounds torpedoed the rescue deal that had been months in the making.
 
Thomas Cook bosses met lenders and creditors in London on Sunday to try to thrash out a last-ditch deal to keep the company afloat. They failed.
 
Under the original terms of the plan, Fosun - whose Chinese parent owns all-inclusive holiday firm Club Med - would give 450 million pounds ($552 million) of new money in return for at least 75% of the tour operator business and 25% of its airline.
 
Thomas Cook's lending banks and bondholders were to stump up a further 450 million pounds and convert their existing debt to equity, giving them in total about 75% of the airline and up to 25% of the tour operator business.

 
 
 
 
 

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  Thought of the Day

"A successful man is one who can lay a firm foundation with the bricks others have thrown at him."
David Brinkley

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Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST
Shibu Chandran
2 hours ago

Serving political interests in another person's illness is the lowest form of human value. A 70+ y old lady has cancer.

November 28, 2016 05:00 IST


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