LONDON, Sept 23, 2019 (BSS/AFP) – British travel firm Thomas Cook
collapsed into bankruptcy on Monday, leaving some 600,000 holidaymakers
stranded and sparking the UK’s biggest repatriation since World War II.
The 178-year-old debt-plagued group, which had struggled against fierce
online competition for some time and blamed Brexit uncertainty for a recent
drop in bookings, failed to secure œ200 million ($250 million, 227 million
euros) from private investors and collapsed in the early hours.
Monday’s bankruptcy, which followed a lengthy period of chronic financial
turmoil after a disastrous 2007 merger deal, left some 600,000 tourists
stranded worldwide according to Thomas Cook, while its 22,000 staff are now
out of a job.
The British government launched emergency plans to bring some 150,000 UK
holidaymakers back home from destinations including Bulgaria, Cuba, Turkey
and the United States.
– ‘No choice’ –
Thomas Cook said in a statement that “despite considerable efforts”, it was
unable to reach an agreement between the company’s 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.
The long-troubled group has also been blighted by enormous costs arising
from its disastrous 2007 merger with MyTravel, a deal which left it plagued
with huge levels of debt.
The UK government said Monday it had hired planes to fly home British
tourists, in a mass repatriation plan codenamed Operation Matterhorn which
began immediately.
Launching Britain’s “largest repatriation in peacetime history”, Transport
Secretary Grant Shapps added that the government and UK Civil Aviation
Authority had hired dozens of charter planes to fly home Thomas Cook
customers.
“All customers currently abroad with Thomas Cook who are booked to return
to the UK over the next two weeks will be brought home as close as possible
to their booked return date,” the government said.
Both a tour operator and an airline, the travel giant’s key destinations
were in Southern Europe and the Mediterranean but it offered also holidays in
Asia, North Africa and the Caribbean.
“It is a matter of profound regret to me and the rest of the board that we
were not successful,” said Thomas Cook chief executive Peter Fankhauser.
“This marks a deeply sad day for the company,” he added in the statement.
-22,000 jobs lost –
As well as grounding its planes, Thomas Cook has been forced to shut travel
agencies, leaving the group’s 22,000 global employees — 9,000 of whom are in
Britain — out of a job.
Chinese peer Fosun, which was already the biggest shareholder in Thomas
Cook, had agreed last month to inject œ450 million into the business as part
of an initial œ900 million rescue package.
In return, the Hong Kong-listed conglomerate was to acquire a 75 percent
stake in Thomas Cook’s tour operating division and 25 percent of its airline
unit.
“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,” the
Chinese group said in a statement to AFP on Monday.
Cabinet maker Thomas Cook created the travel firm in 1841, transporting
temperance supporters by train between British cities.
It soon began arranging foreign trips, being the first operator to take
British travellers on escorted visits to Europe in 1855, followed soon after
by destinations further afield.
Thomas Cook grew into a huge operation but fell into massive debt despite
recent annual turnover of œ10 billion from transporting about 20 million
customers worldwide.
The tour operator’s demise caps a dramatic fall from grace for a company
which was ejected from London’s prestigious FTSE 100 shares index in 2010 —
and from the second-tier FTSE 250 last year. Its shares are worthless and now
suspended.
The company’s failure comes just two years after the collapse of Monarch
Airlines that prompted the British government to take emergency action and
return 110,000 stranded passengers, costing taxpayers œ60 million on hiring
planes.
“A rescue package would likely have amounted to little more than delaying
the inevitable and simply throwing good money after bad,” said XTB analyst
David Cheetham.