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Thu, Mar

Tour Operator Thomas Cook Collapses

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British tour operator Thomas Cook collapsed after failing to meet its 11.59 pm deadline to pay its creditor the sum of £200 million and has been declared financially insolvent, thus leaving thousands of travelers stranded and putting over 20,000 jobs at risk. The UK Civil Aviation Authority has also canceled all Thomas Cook bookings.

Thomas Cook Group plc, a British global travel group which was formed on 19 June 2007 by the merger of Thomas Cook AG and MyTravel Group. Thomas Cook has operated in two separate segments: a tour operator and an airline. The group, after 178-year history has officially entered administration when the London stock exchange opened at 8 am this morning.

In a statement, the group said that its board concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect "An application was made to the High Court for a compulsory liquidation of the Company before the opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of the Company".

CEO of Thomas Cook has apologized to customers, employees, suppliers, and partners "This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world," 

With this collapse, shares in Chinese firm 'Fosun Tourism' dropped more than 5% in Hong Kong; Fosun Tourism's parent company Fosun International is one of China's biggest conglomerates. It owns all-inclusive holiday firm Club Med. Billionaire founder Guo Guangchang is Thomas Cook's largest stakeholder, according to data provider Refinitiv.

According to the UK, Civil Aviation Authority, there are more than 150,000 UK outbound Thomas Cook customers abroad and the head of policy, Tim Johnson has assured that  "When people get to the end of their holiday, they will be brought back to the UK," "We've chartered 40 planes and we're going to be running over 1,000 flights over the next two weeks," 

Tim Johnson further added that repatriation flights are only available for passengers whose journey originated in the UK and that the aviation authority has launched a website where customers can find details on those flights. "Customers currently overseas should not travel to the airport until their flight back to the UK has been confirmed on the dedicated website". Those on holiday packages protected by the Air Travel Organiser's Licence, the aviation authority said it will sort out hotel bills.

Thomas Cook had been scrambling over the weekend to avoid collapse after the Royal Bank of Scotland and a range of other banks demanded that Thomas Cook Group PLC find £200 million ($250 million) in funding by this upcoming week.

Grant Shapps, the UK's secretary of state for transport, said in a statement that the government and CAA are "working round the clock" to help people affected by the collapse. "Our contingency planning has helped acquire planes from across the world some from as far away as Malaysia and we have put hundreds of people in call centers and at airports,"  "But the task is enormous, the biggest peacetime repatriation in UK history. So, there are bound to be problems and delays. Please try to be understanding with the staff who are trying to assist in what is likely to be a very difficult time for them as well."

UK Foreign Secretary Dominic Raab said earlier Sunday states that the government would not "systematically step in" to save businesses unless there was a "good strategic national interest." He added that none of Thomas Cook customers on vacation will be stranded "We've got all the contingency planning to make sure no one will be stranded,". "I don't want to go into the detail of it because it depends on the nature of which people are out there, whether they'd booked a package or just paid for the flights."

The repatriation plan, nicknamed Operation Matterhorn, would cost the UK government an estimated $750 million. This development comes after a tumultuous year for Thomas Cook. Since May 2018, shares have fallen by more than 96% amid Brexit uncertainty and intense competition in the tourism sector.

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