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Lakhs of holidaymakers stranded as British travel firm Thomas Cook collapses

The British government said the return of the firm’s 150,000 British customers now abroad would be the largest repatriation in its peacetime history. The process is set to begin later Monday and officials warned that delays are inevitable.

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London Published on: September 23, 2019 9:25 IST
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Tour company Thomas Cook collapses

Longtime British tour company Thomas Cook collapsed after failing to secure rescue funding, and travel bookings for its more than 600,000 global vacationers were cancelled early Monday.

The British government said the return of the firm’s 150,000 British customers now abroad would be the largest repatriation in its peacetime history. The process is set to begin later Monday and officials warned that delays are inevitable.

The Civil Aviation Authority said Thomas Cook has ceased trading, its four airlines will be grounded, and its 21,000 employees in 16 countries, including 9,000 in the UK, will lose their jobs. The company several months ago had blamed a slowdown in bookings because of Brexit uncertainty for contributing to its crushing debt burden.

The 178-year-old company had said Friday it was seeking 200 million pounds ($250 million) to avoid going bust and was in weekend talks with shareholders and creditors to stave off failure. The prominent firm, whose airliners were a familiar sight in many parts of the world, also operated around 600 UK travel stores.

The company’s chief executive Peter Fankhauser said, “This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.”

He said a deal had been “largely agreed” but that “an additional facility” requested in the last few days presented an insurmountable challenge but provided no further details.

“I would like to apologize to our millions of customers, and thousands of employees,” he said in a statement.

Britain’s CAA said it had arranged an aircraft fleet for the complex British repatriation effort, which is expected to last two weeks.

“Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavour to get people home as close as possible to their planned dates,” the aviation authority said in a statement.

Describing the repatriation plan, British Transport Secretary Grant Shapps said dozens of charter planes, from as far afield as Malaysia, had been hired to fly customers home free of charge. He said hundreds of people were staffing call centres and airport operations centres.

“The task is enormous, the biggest peacetime repatriation in UK history. So there are bound to be problems and delays,” he said.

A website set up by the aviation authority to aid the firm’s customers crashed shortly after the company collapse was announced.

Unions representing the Thomas Cook staff had urged the British government to intervene to prop up Thomas Cook.

Most of Thomas Cook’s British customers are protected by the government-run travel insurance program, which makes sure vacationers can get home if a British-based tour operator fails while they are abroad.

Thomas Cook, which began in 1841 with a one-day train excursion in England and now operates in 16 countries, has been struggling over the past few years. It only recently raised 900 million pounds ($1.12 billion), including receiving money from leading Chinese shareholder Fosun.

An estimated 1 million future travellers will find their bookings for upcoming holidays cancelled. They are likely to receive refunds under the terms of the government’s travel insurance plan.

In May, the company reported a debt burden of 1.25 billion pounds and cautioned that political uncertainty related to Britain’s scheduled departure from the European Union at the end of October had hurt demand for summer holiday travel. Heatwaves over the past couple of summers in Europe have also led many people to stay at home, while higher fuel and hotel costs have weighed on the travel business.

The company’s troubles were already affecting those travelling under the Thomas Cook banner.

A British vacationer told BBC radio on Sunday that the Les Orangers beach resort in the Tunisian town of Hammamet, near Tunis, demanded that guests who were about to leave pay extra money for fear it wouldn’t be paid what it is owed by Thomas Cook.

Ryan Farmer, of Leicestershire, said many tourists refused the demand since they had already paid Thomas Cook, so security guards shut the hotel’s gates and “were not allowing anyone to leave.”

It was like “being held hostage,” said Farmer, who is due to leave Tuesday. He said he would also refuse to pay if the hotel asked him.

The Associated Press called the hotel, as well as the British Embassy in Tunis, but no officials or managers were available for comment.

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