Thomas Cook collapses, Travelers Stranded As Last-Ditch Rescue Talks Fail To Save 178-yr Old Firm

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Monday, September 23, 2019   / 05:57AM /  By Agency News - CNN & BBC    / Header Image Credit: ThisIsMoneyUK

 

Thomas Cook has collapsed on Sunday night after last-minute negotiations aimed at saving the 178-year-old holiday firm failed.

 

The UK Civil Aviation Authority (CAA) said the tour operator has "ceased trading with immediate effect" i.e all Thomas Cook bookings have been canceled.

 

"An application was made to the High Court for a compulsory liquidation of the Company before opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of the Company," it said in the statement.

 

It has also triggered the biggest ever peacetime repatriation, aimed at bringing more than 150,000 British holiday-makers home.

 

Ownership Apologises

 

Peter Fankhauser, Thomas Cook's chief executive, said the firm's collapse was a "matter of profound regret".

 

Commenting as the company entered compulsory liquidation, Mr Fankhauser also apologised to the firm's "millions of customers, and thousands of employees, suppliers and partners ".

 

The tour operator's failure puts 22,000 jobs at risk worldwide, including 9,000 in the UK. 

 

"This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world," Fankhauser said.

 

Early Market Reaction

 

The collapse of an iconic UK company is having ripple effects in Asia. Shares in Chinese firm Fosun Tourism dropped more than 5% in morning trade in Hong Kong.

 

Fosun Tourism's parent company Fosun International is one of China's biggest conglomerates. It owns all-inclusive holiday firm Club Med. Billionaire founder Guo Guangchang is Thomas Cook's largest stakeholder, according to data provider Refinitiv.

 

"Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution" for its financial troubles, the company said in a statement. "We extend our deepest sympathy to all those affected by this outcome," it added.

 

The move triggers the largest ever peacetime repatriation in the history of the United Kingdom, topping the operation the government carried out after the 2017 collapse of Monarch Airlines.

 

In a statement, the aviation authority said there are "more than 150,000 Thomas Cook customers abroad, almost twice the number that were repatriated following the failure of Monarch." It said the government has asked it to launch a repatriation program, which would return Thomas Cook customers to the United Kingdom, from September 23 - October 6, 2019.

 

"Due to the unprecedented number of UK customers currently overseas who are affected by the situation, the Civil Aviation Authority has secured a fleet of aircraft from around the world to bring passengers back to the UK with return flights," it said.

 

Options for Travelers

 

The aviation authority launched a website where customers can find details on repatriation flights.

 

"Customers currently overseas should not travel to the airport until their flight back to the UK has been confirmed on the dedicated website," it said.

 

Depending on where travelers are located, return flights will be either on flights operated by the aviation authority or by existing flights with other airlines, according to Thomas Cook.

 

For Thomas Cook travelers abroad on holiday packages protected by the Air Travel Organiser's Licence, the aviation authority said it will sort out hotel bills.

 

ATOL is a UK financial protection program that protects most air package holidays sold by UK-based travel businesses.

 

"While arrangements are being made, please do not make a payment to your hotel unless instructed otherwise by the CAA team," the aviation authority said. "If our guarantee is not accepted by the accommodation provider, we may need to relocate you to another hotel for the duration of your stay."

 

Travelers on an ATOL-protected holiday should have received an ATOL Certificate either by email or by post.

 

Thomas Cook customers that only booked hotel stays will not be bailed out by the aviation authority. ATOL protection only applies to hotels when booked as part of an air inclusive holiday package.

 

 

For more information, read here

  1. How the contingency plans panned out - CNN
  2. What went wrong? - BBC

 

 

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