We need your help now
Support from readers like you keeps The Journal open.
You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.
If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.
Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
By continuing, you are indicating that you accept our Terms of Service and Privacy Policy.
BRITISH TRAVEL GROUP Thomas Cook has declared bankruptcy today, leaving 22,000 global employees – 9,000 of whom are in Britain – without a job.
The operator had been seeking £200 million from private investors in order to avoid a collapse.
Now more than 600,000 tourists are stranded worldwide, including more than 150,000 holidaymakers seeking to return to Britain.
The operator, which closed its one office in Dublin back in 2014, experienced difficulties for several years but the situation deteriorated in recent months.
The group announced a loss of £1.5 billion in the first half of the year due to the competition from online travel and also the tremors caused by Brexit, which it said had led to potential tourists delaying travel plans amid the uncertainty.
The weak pound also reduced the purchasing power of British holidaymakers abroad.
The setbacks caused its stock price to fall in recent months, plummeting to just a few pence.
Fosun, the Chinese owner of Club Med, was Thomas Cook’s largest shareholder, owning around 17% of its capital.
The Chinese firm had planned to take over the British group’s tours business as part of a £900 million refinancing package, of which it would have contributed half.
However creditors were later asked for a further £200 million to refinance the tour operator, arguing that it would not be sustainable otherwise.
Creditors, executives and shareholders were locked in a series of meetings from Friday to try to release pension funds, secure a government bailout or cut the £200 million sum.
These attempts failed and the travel giant declared bankruptcy early this morning.
In a statement it said that “despite considerable efforts” it was unable to reach an agreement between 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,” it added.
Prime Minister Boris Johnson said bailing out the company would have involved “a lot of taxpayers’ money” and set up a “moral hazard” in future cases of commercial difficulty faced by British firms.
“It is a very difficult situation and obviously our thoughts are very much with the customers of Thomas Cook,” Johnson told reporters en route to the UN General Assembly in New York.
“We will do our level best to get them home.”
The last Thomas Cook flight landed in Manchester just before 9am today.
Hundreds of thousands of passengers are now stranded, with many reporting prices for flights home with other airlines rising rapidly. As many as 4,500 Irish passengers are believed to be impacted.
The British government has already begun sending planes to bring British holidaymakers home as close as possible to their planned return date.
Many British customers’ holidays are protected by a Civil Aviation Authority scheme called Atol (Air Travel Organisers’ Licensing).
This means they will receive a refund for cancelled flights or accommodation, but this could take a number of weeks.
Irish passengers who booked a Thomas Cook package through an Irish travel agent should also be covered by this scheme. Irish holidaymakers who are still abroad will be able to avail of the repatriation flights to the UK as they would have flown through the UK initially.
The Turkish government has pledged to support local businesses affected by the collapse of Thomas Cook, with more than 21,000 of its customers currently in the country. The tourism ministry said a credit support package is being developed to help these businesses.
The ministry also warned hotels that they would be prosecuted if they demanded payment from tourists or evicted them from their rooms due to the Thomas Cook collapse.
Cyprus’ deputy tourism minister Savvas Perdios also said the government had informed the hotel sector to make sure it offers “services which are included in the package rate of Thomas Cook to the customers”.
As for the operator’s staff, some have turned up at airports and outside closed Thomas Cook stores to help, even though they are no longer being paid.
Support packages are reportedly in place for employees, but the scale of this support is unclear.
The British Airline Pilots’ Association said while detailed plans to repatriate passengers have been carefully put together, the staff have been “stabbed in the back without a second’s thought”.
“Despite continuing to keep Thomas Cook going in recent weeks with dignity and integrity while their own futures were being secretly decided we don’t even know if staff will get a pay cheque this month.
It is despicable. Thomas Cook pilots and all staff deserve better than this.
“For pilots, BALPA will be supporting our members through the legal complexities of what Thomas Cook liquidation means for them and doing everything we can to help them find alternative jobs in other airlines.”
- With reporting from AFP.
To embed this post, copy the code below on your site
Badly run company, operating with no control on external factors such as oil prices and FX rates GBPEUR to be precise.
It will take the UK people years to see the reality of this brexit mess. They lose car manufacturing Honda, now Thomas Cook.
@RJ: Brexit would have helped this dinosaur. The more ‘foreign’ a foreign place is, the more people who use travel agents will want them.
@RJ: Not only Honda. The multinational exit list is huge!
It spent everything it had. Then it spent some more.
Didn’t keep up with the times. Travel agencies are a dying form of holiday organisation. Many people prefer to cut out the middle man and organise direct flights and accomodation.
@Sinead Merrigan: That is absolute bullcrap and I’ve been hearing it for over 25 years.Many travel agencies are thriving. The problem is consumers expecting holidays for €299 etc. Them days are over.
Also, had those people booked their flights and their accommodation separately, like you suggest, they would be abandoned on their own without any support, no repatriation and would not be entitled to any refunds under the Travel Package Directive. Travel agents and tour operators are fully licenced and bonded and they offer full financial protection as set down by law.
Book separate flights and then separate hotels at your peril, because you lose out massivley, from a financial point of view, when it all goes belly up.
@Ian Breathnach: Only if your airline owns the hotel. You’d be fair unlucky for your airline, hotel and the bus/taxi company doing any day trips you booked to all go belly up on the same day. And you can also just get travel insurance, it’s not that expensive, if you really want that peace of mind.
@Jim O Brien – TechBuzz Ireland: that’s bloody awful, and bloody typical
A lot of pilots looking for jobs now … that will suit Mick ! He can tell the current crop to whatever when they strike again.
@Terry Cahill: Thomas Cook flew Airbus which means they won’t be needed at Ryanair
@David Garland: Straightforward conversion courses . Not an issue. Aerlingus fly several different types and recruit and promote from within.
@Paul Murphy: Airbus and what else? The Boeings are wet leased and the commuters are with stobart….unless the pilots are leased to stobart.
@Paul Furey: Not sure about the ATRs used by Comuter..initially they were Aer Aran then went to Stobart.. are they on wet lease from Stobart? Originally the transatlantic Boeings came from Air Contractors..didn’t realise the routes to the US were still being run on were lease. Anyway at A320 level it’s a bit like say because I drive a Nissan I can’t drive a ford. Requalification between types us not a game stopper. Mate of mine went from Easy jet to Norwegian with only a few weeks retraining
@Paul Murphy: Type rating is that what they call it
@Jim O Brien – TechBuzz Ireland: yeah couldn’t remember the term thanks
Companies paying out huge bonuses on under-performing companies… the mind absolutely boggles
Awful situation for thousands of people. Travelers and former employees. Unfortunately you can expect a lot more of this when the U.K. leave the EU. It’s only starting to affect voters now.
Prescription delivery charges is another cost on them as well. They may get used to being discommoded and they may get used to it costing them money.
Never Ever book with a travel agency. The internet has enough reviews about nice places to stay. Book directly with the hotel and get flights yourself. The rest is really easy to do.
@HONEY BADGER180: There are specialist travel agencies that profit quite well. Usually cater to high end luxury or large groups.
@HONEY BADGER180: Why? The people that booked with Thomas Cook have their money protected. Tens of thousands of people that booked directly with the recently collapsed WOW Air wont get a cent back. If they booked with a travel agent, they will get their money back because the travel agent is, get this, licenced and bonded!! But you seem to know it all…
Consumers should be protected before shareholders…
@Jessie Ginger: The consumers are protected under ATOL. It’s in the article.
Failure to innovate and change. If you don’t do it in today’s business climate, you die – simple as that. The likes of stripe grow to a €35bn company in less time than the likes of Thomas Cook increase their valuation by €200m – the pace of change is now staggering and if you don’t keep up, your customers move on.
Greed. Gordon gekko will have all the answers.
have your say