UK travel icon Thomas Cook bankrupt, stranding tourists

PHOTO: Axios.com

“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.”

British travel giant Thomas Cook declared bankruptcy today after failing to reach a last-ditch rescue deal. The collapse triggers the UK’s biggest repatriation since World War II to bring back stranded passengers.

The 178 year old operator had been desperately seeking a 200 million pound (US$250 million, 227 million euros) bailout from private investors to save it from collapse.

“Despite considerable efforts, those discussions have not resulted in 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 government says it has already hired planes to fly home an estimated 150,000 holidaymakers to the UK, in an operation starting today.

In Thailand there are also “probably a few thousand” holidaymakers as local operators assess the challenge of getting British holiday-makers in Thailand back to the UK. A Thai-based hotelier told The Thaiger this morning that the collapse will be catastrophic for the UK holiday market and will impact Thai bookings from the British, especially over the forthcoming Christmas and New Year season.

“There are many hotels with long-term contracts with Thomas Cook, but those bookings will now fall through. It’s not good for tourism in Thailand that has been so popular for British tourists for twenty years.”

Following the collapse of Thomas Cook and the cancellation of all its flights, the UK Transport Secretary Grant Shapps has announced that the government and UK Civil Aviation Authority hired dozens of charter planes to fly customers home free of charge,” a separate 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.”

Thomas Cook chief executive Peter Fankhauser called it a “deeply sad day”.

“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 marathon meetings yesterday 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.

Holidaymakers had already reported problems, with guests at a hotel in Tunisia owed money by Thomas Cook being asked for extra money before being allowed to leave, according to a tourist interviewed by AFP.

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% of its airline unit.

Thomas Cook in May revealed that first-half losses widened on a major write-down, caused in part by Brexit uncertainty that delayed summer holiday bookings. The group, which has around 600 stores across the UK, has also come under pressure from fierce online competition.

Cabinet maker Thomas Cook created the travel firm in 1841 to carry 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. The company was also a pioneer in introducing “circular note” – products that would later become traveller’s cheques.

SOURCE: Agence France-Presse