British government said it would work to return all those booked to come back to the UK over the next two weeks free of cost
Thomas Cook Group Plc collapsed under a pile of debt after talks with creditors failed, forcing the British government to hire charter planes to bring thousands of the 178-year-old travel company’s customers back home.
The company filed for administration early Monday after eleventh-hour negotiations to raise additional funding failed to result in a deal. The move saw all bookings, flights and holidays with Thomas Cook cancelled, sparking panic online among travellers. In what it called the largest repatriation in peacetime history, the government said it would work to return all those booked to come back to the UK over the next two weeks free of cost.
Also read: Travel group Thomas Cook battles for survival with final creditor meeting
The collapse spells the demise of what is one of the the UK’s best-known brands, and caps months of talks with Thomas Cooks investors, led by Fosun Tourism Group. The Chinese firm, which owns the Club Med resort chain, proposed a $1.1 billion bailout in exchange for control of London-based Thomas Cooks tour operations and a minority stake in its airline. Last week, the tour operator said it needed 200 million pounds ($250 million) more, leading to the rapid unravelling of its rescue prospects.
Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable, said Chief Executive Officer Peter Fankhauser.
The company is one of the most high-profile casualties of the travel business decades-long shift online and the malaise affecting the European holiday market. For decades, tour operators such Thomas Cook and Germany’s TUI AG thrived by offering package holidays to sun-starved Europeans. But the rise of discount airlines and web distribution have squeezed profits in an industry that is highly seasonal and prone to shocks from terrorism to political turmoil.
Travellers on Thomas Cook vacation packages and flights were advised by the British government not to cut short their trips, with the civil aviation regulator planning to repatriate customers as close as possible to their booked return date. The government will also cover the cost of accommodation for Thomas Cook customers.
The collapse deals another blow to the European travel sector, just months after the bankruptcy of Icelandic budget airline, Wow Air. The carrier shut down its operations in March due to lack of financing, leaving 2,700 fliers stranded and hurting the country’s economy.
Thomas Cook filed for administration early on Monday at the High Court in London. AlixPartners LLP was named an adviser and will work with the aviation authority to bring customers back to the UK. Fosun Tourism Group said in a statement on Monday that it was disappointed Thomas Cook was unable to find a solution. Fosun confirms that its position remained unchanged throughout the process, but unfortunately other factors have changed, the company said. We extend our deepest sympathy to all those affected.
via Thomas Cook collapse: Bailout fails, tourists stranded – The Hindu BusinessLine
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