Thomas Cook has collapsed into compulsory liquidation as the 178-year-old holiday firm has failed to meet a last-minute negotiation.
Over 150,000 British holidaymakers have been left stranded abroad after their flights have been canceled due to Thomas Cook ceasing trade with immediate effect.
Thomas Cook’s Chief Executive, Peter Fankhauser, stated the firm’s collapse was a “matter of profound regret”.
Mr Fankhauser has also apologised to his employees, with 22,000 jobs now being at risk, 9,000 of which are based in the UK.
The government was asked by the holiday firm to make a bailout of £250m, which was denied.
The move was defended by Transport Secretary Grant Shapps on the Today program, where he said: “I fear it would have kept them afloat for a very short period of time and then we would have been back in the position of needing to repatriate people in any case.”
The transport secretary added that the company’s large debts and high-street focused business made it an unlikely candidate for survival.
However, shadow chancellor John McDonnell informed the BBC that he believed the government should have bailed out Thomas Cook.
Despite the government not resolving the situation in this aspect, Prime Minister Boris Johnson has pledged to help stranded holidaymakers, whilst putting into question whether or not the company directors were motivated enough to “sort such matters out”.
How Did It Go Wrong?
In August Thomas Cook managed to secure a £900m rescue deal, which was led by its largest shareholder Chinese firm Fosun. However, the holiday firm’s bank made a recent demand which involved raising a further £200m in contingency funding, which put the deal in additional doubt.
On Sunday, Thomas Cook spent the day in talks with lenders in order to secure supplementary funding and to salvage a deal, but to no avail.
The company has blamed various reasons for its problems, including last year’s heatwave, customers delaying holidays because of Brexit and political unrest in holiday spots such as Turkey.
Travel Expert, Simon Calder said Thomas Cook “wasn’t ready for the 21st century”.
Travel editor at The Independent, Mr Calder added that whilst other companies were closing shops to cut costs, the holiday firm still had more than 500 outlets, which made for larger costs in comparison to online competitors.
The Peoples’ Response
“Nothing fecks it quite like Brexit” should be Thomas Cook’s new slogan.
— Rónán Murray (@RonanMurrayMuso) September 23, 2019
Yesterday #ThomasCook where still taking bookings / putting people on planes. Have been struggling for years. Bad management caused #ThomasCookcollapse and a lot of competition out there also played big part.
— TJ (@jimmy_1975) September 23, 2019
Massive respect to our @ThomasCookUK rep that turned up at our hotel this morning in Crete even tho she has lost her job ! Goes to show there are people that care, thank you Katie #couldbealotworse #thomascook
— Ballerina (@angjd10) September 23, 2019
One person who is particularly devastated by the news is Ruth Morse, who was due to get married in Cyprus on 14 October. Ruth paid for a package holiday and some of her wedding services through Thomas Cook.
“Two years ago my brother was murdered it was a sad time for the family. My partner had always planned to propose to me and was going to ask my brother’s permission but never got round to it.” Ruth said, also mentioning that it was her late brother’s money which was what made the wedding possible.
“As a family, two years we’ve planned for our dream wedding, it’s kept us going and kept us focussed and then waking up to this news today is just absolutely devastating.”
Loganair To Step In And Help
Loganair is offering to help passengers who were due to connect onto a Thomas Cook flight or holiday, allowing them to rebook or put their flight on hold.
In a statement, Loganair claimed they were “saddened” by the closure of the long-standing travel company, adding: “If you have a Loganair booking to connect to a Thomas Cook flight or holiday, please focus on re-arranging the other elements of your holiday first”.
“Once you’ve done that, give us a call on 0344 800 2855 with your Loganair booking reference.
“We’ll re-book you onto any flight on the same route on which we have seats available, and we’ll waive the change fee and/or difference in fare that would normally apply.
“If you need to fly on a different route to meet your re-arranged holiday plans, we’ll waive change fees and there may be only a small charge to reflect the difference in fare between your original route and the new route booked, based on the same ticket and fare type.
“If you decide to delay your holiday as you can’t find a new deal that meets your needs or is affordable, we can also put your Loganair flights on hold for up to six months.
“This facility to make changes to your Loganair booking will be available for the next two weeks, to 7 October, which we hope will provide time to re-arrange your travel plans.”
How Flights Will Be Affected
A flying program has been launched by the UK Civil Aviation Authority (CAA) to bring Thomas Cook customers home in what has been the biggest ever peacetime repatriation.
The CAA has managed to secure a fleet of aircraft from around the world, so passengers can be brought back to the UK with return flights.
Not all passengers will be returning directly through the CAA, passengers from a small number of destinations may return on alternative commercial flights.
Any Thomas Cook customers who are overseas should not travel to the airport until their flights back to the UK have been confirmed by a website that has been launched in response to the company’s collapse.
All Thomas Cook flights have been canceled meaning any customers in the UK who have yet to travel to the airport should not go.
If you’ve booked a flight-only deal, you will need to apply to your travel insurance company or credit card and debit card provider in order to seek a refund.
The CAA has been in contact with hotels that accommodate Thomas Cook passengers, who have booked as a part of a package, and have informed them that the cost of their accommodation will be covered by the government. This is through the Air Travel Trust Fund and Air Travel Organiser’s License scheme (ATOL).
In 2017, the year Monarch Airlines collapsed, the government organised flights for all stranded passengers – regardless of whether or not they were ATOL protected.
What has been dubbed Operation Matterhorn is the authorities attempting to get 14,000 holidaymakers which are stranded abroad back home – the government has ordered 45 jets to bring customers home.
64 flights will take place today as a part of the procedure, with operators such easyJet and Virgin supplying aircraft – some coming as far afield as Malaysia.
Are You Protected?
ATOL protected passengers that have future bookings will be entitled to a full refund for their canceled holiday. Any passengers currently overseas may also claim the cost of replacing ATOL protected parts of their trip. Claims can also be made for out of pocket expenses which have been made as a result of delayed flights home.