Thomas Cook collapse: Holidaymakers’ return to take two weeks
Written by Gavin on 23rd September 2019
It had a total of 600,000 global customers in-resort at the time of its collapse.
Thomas Cook planes that were operating overnight have been grounded as they land at their destinations while 21,000 staff, including 9,000 people in the UK, are set to lose their jobs.
The prospect of finding new work in the sector is bleak as it battles stiff competition and consumer caution over Brexit.
Peter Fankhauser, Thomas Cook’s chief executive, said the tour operator’s demise was a “matter of profound regret”, apologising to those affected.
He said executives had “worked extensively” in an effort to rescue the 178-year-old travel company, adding: “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.
“It is a matter of profound regret to me and the rest of the board that we were not successful.
“I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years.”
The Civil Aviation Authority (CAA) has mobilised at least 40 aircraft from airlines including British Airways and easyJet to bring 150,000 Thomas Cook customers home to the UK.
Richard Moriarty, chief executive of the UK Civil Aviation Authority, said news of Thomas Cook’s failure was “deeply saddening”.
He added: “The government has asked us to support Thomas Cook customers on what is the UK’s largest ever peacetime repatriation.
“We have launched, at very short notice, what is effectively one of the UK’s largest airlines, involving a fleet of aircraft secured from around the world.
“The nature and scale of the operation means that unfortunately some disruption will be inevitable. We ask customers to bear with us as we work around the clock to bring them home.”
The CAA’s policy director Tim Johnson told Sky News: “We expect to run around 1000 flights from the 55 destinations that Thomas Cook served.
“This is a huge effort, were working very closely with the government and Foreign Office in particular…But we’re particularly appreciative and grateful for the support of a number of Thomas Cook employees who have clearly received this very sad news but they’re going to be working with us over the coming few weeks to really help us manage this repatriation exercise.”
Transport Secretary Grant Shapps said the company’s collapse was “very sad news for staff and holidaymakers” and that the government and CAA were “working round the clock to help people”.
Business Secretary Andrea Leadsom said she would write to the Insolvency Service to ask them to “fast-track” their investigation into the circumstances surrounding Thomas Cook going into liquidation.
Thomas Cook had been one of the world’s oldest and largest travel companies, established in 1841 by a cabinet maker who organised a day trip for temperance movement supporters.
According to its website, the group employed 21,000 people in 16 countries operating 105 aircraft and 200 own-brand hotels and resorts. It had 550 stores in the UK – many of them loss-making.
It was hit hard by online competition, a changing travel market, terrorist attacks in destinations such as Tunisia and last year’s European heatwaves. People postponing holidays due to Brexit uncertainty and higher fuel costs also weighed heavily on the company.
Thomas Cook had a rescue deal in place with investors but faced a last-minute demand from its lenders that it have more funds on standby to see it through the tougher winter months.
PM Boris Johnson told Sky News that a government bailout would have created a “moral hazard” by encouraging other companies to take unnecessary risks.
One investor, Fosun Tourism Group, the owner of Club Med, had committed £450m to Thomas Cook under the plan to save the business.
It said in a statement: “Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution for its proposed recapitalisation with other affiliates, core lending banks, senior noteholders and additional involved parties.
“Fosun confirms that its position remained unchanged throughout the process, but unfortunately other factors have changed.
“We extend our deepest sympathy to all those affected by this outcome.”
But what does it mean for holidaymakers now the operator has gone under?
The collapse has triggered the biggest-ever peacetime repatriation of British citizens.
With an estimated 150,000 holidaymakers stranded abroad, the Civil Aviation Authority has launched a taxpayer-funded airlift to bring them home.
What will happen if I’m already overseas?
That depends on your booking.
If your holiday is ATOL protected, you will be able to finish your trip and be repatriated home.
Package holidays that include flights are covered by this, as well as some flight-only bookings.
The CAA says you should not travel to the airport until your flight has been confirmed on a dedicated website:thomascook.caa.co.uk
What is ATOL?
Air Travel Organiser’s Licence is a financial protection scheme run by the Civil Aviation Authority. It protects most air package holidays sold by UK-based travel businesses.
If a travel business with ATOL ceases trading, the scheme would support consumers currently abroad and provide financial reimbursement for the cost of replacing parts of an ATOL protected package.
The scheme is funded by each ATOL holder paying a small fee for each traveller, which is held in a fund managed by the Air Travel Trust. This fund is used to refund, repatriate or reimburse travellers.
How do I know if my holiday was ATOL protected?
The best way to check is to look for an ATOL certificate, which you should have received when you booked. This should tell you what to do if your travel business collapses. The number to call with any problems is +44 (0) 333 103 6350.
What if my package holiday did not include a flight?
You could be ABTA protected instead. Thomas Cook says on its customer care Twitter that ABTA and the CAA (who manage the ATOL scheme) would arrange for these customers to be repatriated.
ABTA, formerly known as the Association of British Travel Agents, is designed to cover holidays bought in the UK that don’t include flights, for example coach, rail or cruise holidays.
ABTA protection means that if your travel company went out of business, you would be entitled to a refund which includes hotel costs. If you are abroad, your transport home would be covered.
Will insurance help?
Only if it specifically included failure cover and not all of them do. Even if your policy does have this, it is unlikely to pay out if you’re covered by ABTA or ATOL.
If you took out a policy including failure cover in the past few days, when it was clear that Thomas Cook was financially struggling, that policy might not help you now. Hopefully you checked this with the insurance provider before buying it.
What if I paid with a bank card?
If you paid more than £100 to Thomas Cook, you could be protected under the Consumer Credit Act. It means the card company can be liable if something goes wrong. It’s more complicated if you paid for your holiday through a travel agent.
What if I booked but haven’t started my holiday yet?
ATOL protection means that you would get a refund or, in some cases, a replacement holiday.
What if a previous booking with Thomas Cook was delayed and I was waiting for compensation?
You’re likely to be at the back of a long line of creditors. Your chances aren’t great.
What if I need more information?
The Civil Aviation Authority has launched a special website, thomascook.caa.co.uk, where affected customers can find details and information on repatriation flights, as well as advice on accommodation for both ATOL and non-ATOL customers.
There is also a 24-hour helpline set up by the CAA for all customers: 0300 303 2800 from the UK and Ireland and +44 1753 330 330 from overseas.