Tour company Thomas Cook collapses, global bookings canceled
LONDON – Veteran British tour operator Thomas Cook collapsed after failing to secure rescue funding, and travel bookings for its more than 600,000 global vacationers were canceled early Monday.
FILE – In this May 19, 2016 file photo, a Thomas Cook plane takes off in England. More than 600,000 vacationers who booked through tour operator Thomas Cook were on edge Sunday, wondering if they will be able to get home, as one of the world’s oldest and biggest travel companies teetered on the edge of collapse. The debt-laden company, which confirmed Friday it was seeking 200 million pounds ($250 million) in funding to avoid going bust, was in talks with shareholders and creditors to stave off failure. (Tim Goode/PA via AP, file)
The British government said the return of the firm’s 150,000 British customers now abroad would be the largest repatriation in its peacetime history. The process is set to begin later Monday.
The Civil Aviation Authority said Thomas Cook has ceased trading, its four airlines will be grounded, and its 21,000 employees in 16 countries, including 9,000 in the UK, will lose their jobs. The company had several months ago blamed a slowdown in bookings because of Brexit uncertainty as one of the contributing factors to its crushing debt burden.
The 178-year-old company had said Friday it was seeking 200 million pounds ($250 million) in emergency funds to avoid going bust, and was in weekend talks with shareholders and creditors to stave off failure. The prominent firm, whose airliners were a familiar sight in many parts of the world, also operated around 600 UK travel stores.
Britain’s CAA said it had arranged an aircraft fleet for the complex British repatriation effort, which is expected to last two weeks.
“Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavor to get people home as close as possible to their planned dates,” the aviation authority said in a statement.
Most of Thomas Cook’s British customers are protected by the government-run travel insurance program, which makes sure vacationers can get home if a British-based tour operator fails while they are abroad.
Thomas Cook, which began in 1841 with a one-day train excursion in England and now operates in 16 countries, has been struggling over the past few years. It only recently raised 900 million pounds ($1.12 billion), including receiving money from leading Chinese shareholder Fosun.
In May, the company reported a debt burden of 1.25 billion pounds and cautioned that political uncertainty related to Britain’s scheduled departure from the European Union at the end of October had hurt demand for summer holiday travel. Heat waves over the past couple of summers in Europe have also led many people to stay at home, while higher fuel and hotel costs have weighed on the travel business.
The company’s troubles were already affecting those traveling under the Thomas Cook banner.
A British vacationer told BBC radio on Sunday that the Les Orangers beach resort in the Tunisian town of Hammamet, near Tunis, demanded that guests who were about to leave pay extra money for fear it wouldn’t be paid what it is owed by Thomas Cook.
Ryan Farmer, of Leicestershire, said many tourists refused the demand, since they had already paid Thomas Cook, so security guards shut the hotel’s gates and “were not allowing anyone to leave.”
It was like “being held hostage,” said Farmer, who is due to leave Tuesday. He said he would also refuse to pay if the hotel asked him.
The Associated Press called the hotel, as well as the British Embassy in Tunis, but no officials or managers were available for comment. /gsg
