Cook collapse hits Webjet sales hard

ONLINE travel agent Webjet will lose up to $200 million in sales as the collapse of British travel company Thomas Cook up-ends holiday makers and tourism players across the globe.

Shares in Webjet slumped yesterday as it told investors it would also write-off €27 million ($43.7 million) in payments owned to it by the 178-year-old travel company, which has imploded under a pile of debt.

The downfall of one of the world’s oldest travel agents has left 600,000 holiday makers stranded across the globe and triggered Britain’s biggest-ever peacetime repatriation program.

Thomas Cook owned and operated hotels, resorts and aircraft, providing holidays for 19 million people every year, to 16 countries.

The London-based company has struggled with the rise of cheap airlines, changing holiday preferences and a large store network that has been disrupted by online booking sites.

More recently it had called out a summer heatwave that prompted Brits to holiday at home and economic uncertainty unleashed by Brexit.

It entered compulsory liquidation yesterday after failing to secure £200 million ($368 million) needed to keep the business afloat following a crucial talks with the major shareholder, creditors and UK government officials.

Webjet’s WebBeds business, which sells hotel rooms to travel agents and tour providers, counted Thomas Cook as a client.

It had expected to book between $150 million and $200 million in transactions from Thomas Cook this financial year. That had already been cut from $300 million to $450 million as concerns about the viability of Thomas Cook mounted.

Webjet said earnings at WebBeds would be reduced by $7 million this financial year. The unit generated $124.6 million in earnings for the year to June.

The Melbourne-based company said it continued to be the fastest growing accommodation provider to the travel industry.

Shares in Webjet fell 3.5 per cent yesterday to $11.11.