The world’s oldest travel firm Thomas Cook collapsed on Monday, September 23, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.
Thomas Cook, the world’s oldest British travel giant(since 1841, 178 years old) has been brought low by a $2.1 billion debt.
On the other hand, online competition, a changing travel market and geopolitical events were among the major factors of the company’s collapse.
British PM Boris Johnson pledged to get stranded British travellers home and revealed that the government had rejected a request from Thomas Cook for a bailout of about $187.1 million because doing so would have set up a “moral hazard”.
Boris Johnson said, it is a very difficult situation and obviously our thoughts are very much with the customers of Thomas Cook, the holiday makers who may now face difficulties getting home we will do our level best to get them home.
However, the liquidation marks the end of one of Britain’s oldest companies that started life in 1841 running local rail excursions before it survived two world wars to pioneer package holidays and mass tourism.
Millions of customers, thousands of employees in 16 countries
The firm ran hotels, resorts and airlines for 19 million people a year in 16 countries. It currently has 600,000 people abroad, forcing governments and insurance companies to coordinate a huge rescue operation.
Thomas Cook’s CEO Peter Fankhauser said it was a matter of profound regret that the company had gone out of business after it failed to secure a rescue package from its lenders in frantic talks that went through the weekend.
The UK’s Civil Aviation Authority (CAA) said Thomas Cook had ceased trading and the regulator and government had a fleet of planes ready to start bringing home the more than 150,000 British customers over the next two weeks.
I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years, Fankhauser said in a statement.
It is a matter of profound regret to me and the rest of the board that we were not successful, Thomas Cook CEO, Fankhauser said.
Love my job so much, don’t want it to end, Kia Dawn Hayward, a member of Thomas Cook’s cabin crew, tweeted.
Love my job so much, don’t want it to end😓💛— Kia Dawn Hayward (@kiaandmusic) September 22, 2019
Thank you for making my dream job come true #ThomasCook , you will always be my first ever airline and the last in my Sunny Heart💛 pic.twitter.com/1T4jL8cBsF
British Government and Aviation regulator’s response
Moreover, the government and aviation regulator said that due to the scale of the situation some disruption was inevitable. All the company’s flights are cancelled.
Customers were told not to travel to airports until they have been told via a special website thomascook.caa.co.uk, that they were due on a return flight that was being organised by the government.
The British regulator is also contacting hotels hosting Thomas Cook customers to tell them that they will be paid by the government, through an insurance scheme.
However, that was after some were briefly held in a hotel in Tunisia when staff asked for additional payments to be made.
British Transport Minister Grant Shapps said the government had managed to acquire planes from across the world, to get people home, and call centres had been established to answer travellers’ queries.
Thomas Cook collapsed: Major Consequences
The corporate collapse has the potential to spark chaotic scenes around the world, with holidaymakers stuck in hotels that have not been paid in locations as far afield as Goa, Gambia and Greece.
In the longer term, it could also hit the tourism sectors in the company’s biggest destinations, such as Spain and Turkey, leave fuel suppliers out of pocket and force the closure of its hundreds of travel agents across British high streets.
Last year’s European heatwave also hit the company hard as customers put off last-minute bookings.
The group had seemed set for a rescue when it agreed the key terms of a 900 million pound recapitalisation plan in a deal with its biggest shareholder, China’s Fosun, and the travel firm’s banks in August.