Thousands stranded as travel firm folds
LONDON: The world’s oldest travel firm, Thomas Cook, collapsed yesterday, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.
British Prime Minister 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 £150 million ($NZ297 million), because doing so would have set up a ‘‘moral hazard’’.
‘‘It is a very difficult situation and obviously, our thoughts are very much with the customers of Thomas Cook, the holidaymakers who may now face difficulties getting home. We will do our level best to get them home,’’ he told reporters on a plane as he headed to the United Nations General Assembly in New York.
The liquidation marks the end of one of Britain’s oldest companies that started life in 1841 running local rail excursions, and later pioneered package holidays and mass tourism.
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.
Chief executive 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 said Thomas Cook had ceased trading and the regulator and Government had a fleet of planes ready to start bringing home 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.’’
Pictures posted on social media showed Thomas Cook planes being diverted from the normal airport stands.
Employees posted pictures of themselves walking from their last flights.
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 had been told via a special website 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. Some were briefly held in a hotel in Tunisia when staff asked for additional payments to be made.
About 50,000 tourists are stranded in Greece.
The tourists, mainly British, were vacationing on the islands of Zakynthos, Kos, Corfu, Skiathos and Crete.
In Germany, a major customer market for Thomas Cook, insurance companies will coordinate the response.
In the longer term, the collapse 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 hundreds of travel agents.
Thomas Cook was brought low by a £1.7 billion debt pile, online competition, a changing travel market and geopolitical events. Last year’s European heatwave also hit the company hard as customers put off lastminute bookings.
The group had seemed set for a rescue when it agreed the key terms of a £900 million recapitalisation plan in a deal with its biggest shareholder, China’s Fosun, and the travel firm’s banks in August.
But in finalising the terms of the deal, the company was hit with a demand for another facility of £200 million in underwritten funds by its banks. — Reuters