Last-ditch rescue fails to save Thomas Cook

LONDON, 24 September 2019: Thomas Cook a household name in global travel has collapsed with the UK Civil Aviation Authority preparing a fleet of aircraft to rescue thousands of travellers following an announcement Monday morning that a last-minute rescue plan failed.

Thomas Cook, chief executive, Peter Frankhauser said the tour operator’s collapse was a “matter of profound regret” as he apologised to the company’s “millions of customers, and thousands of employees”, the Guardian newspaper reported Monday.

The BBC reported earlier that the future of Thomas Cook hung in the balance as last-minute negotiations to save the holiday firm stalled.

CAA has readied aircraft to fly to popular destinations so that British tourists can be brought home on Monday as part of an “Operations Matterhorn” rescue plan.

The UK government has already said it was ready to fly an estimated 150,000 stranded holidaymakers back to the UK shortly before the 178-year-old Thomas Cook announced it had ceased trading, but indicated a state bailout was not an option.

The company needed a minimum of UKP200 million to see it through the immediate crisis but a financial rescue would require funds exceeding UKP900 million to engineer a full-fledged recovery. In total, rescue and rehabilitation would have cost around UKP1.1 billion.

Chinese investors who were named as the most likely rescuers are no longer in the frame. Earlier on Sunday, the travel group’s chief executive, Dr Peter Fankhauser, refused to answer questions as he emerged from a daylong meeting where he had been negotiating with creditors in a final bid to save the firm.

On 28 August, Thomas Cook Group announced that the group “had agreed the main terms of a rescue package that would have seen Hong Kong’s Fosun Tourism take over its tour operations and creditor banks and bondholders acquire its airline.  That proposal is now off the table.

Fuson that owns Club Med, among other tourism-related investments, remains the company’s largest single shareholder.

Thomas Cook’s insolvency it will ultimately result in more than 500 high-street travel shops closing in the UK alone along with around 9,000 jobs in the UK and more than 22,000 worldwide.

According to the BBC, Thomas Cook “blamed a series of issues for its financial problems including political unrest in holiday destinations such as Turkey, last summer’s prolonged heatwave and customers delaying booking holidays because of Brexit.”

But the firm has also faced fierce competition from online travel agents and low-cost airlines. Also, many holidaymakers are putting together their own holidays and not using travel agents, the BBC stated.