Thomas Cook ceases operations | Photo by Sebastian Vervenne/123rf.com ()
In the wee hours of Monday morning, UK travel firm Thomas Cook announced on Twitter the company had gone under, canceling all flights and leaving 600,000 travelers around the world potentially stranded with few options. Thomas Cook cratered under a mountain of debt after talks for a bailout package from its lenders failed.
What happened?
In May, the world’s oldest travel company reported it was swimming in a debt pool of 1.25 billion pounds. It cited low bookings from Brexit concerns as well as Europe’s sweltering heatwaves the past few summers. Thomas Cook said it was causing travelers to stay home or even cancel plans. It also blamed rising fuel and hotel costs. On Friday, it was announced the company needed 200 million pounds to stay afloat and petitioned its shareholders and creditors to avoid collapse. Negotiations failed and the company crumbled Monday morning.
Thomas Cook joins the ranks of other bankrupt airlines that went under in the past year such as Alitalia, Air Berlin, Cobalt, Flybmi, Germania, Monarch, Primera and WOW Air. Some aviation and financial experts have pointed to an oversaturated market in the cut-throat business of European travel along with higher fuel and operating costs. Smaller airlines seem to fall apart under the massive giants like Ryanair, EasyJet and Lufthansa.
Customers currently stranded
The United Kingdom is coming to the rescue of its citizens, offering chartered flights back to the UK through other airlines for the next two weeks. The country’s Civil Aviation Authority is handling the return flights and said to expect delays and the likelihood you may land at a different UK airport than what you initially booked. The CAA has started listing return flight options for customers and also asking them to fill out an online form.
Thomas Cook also owns German airline, Condor. The company said that airline will continue to operate as normal. Condor has applied for a German-backed loan to continue operations, which is currently under review.
Vacation packages
Thomas Cook’s bread and butter were vacation packages, including not only transportation but hotel stays. If the hotel never received payment from Thomas Cook, customers could be handed a bill or told to leave. The CAA says if that happens to contact them since holiday packages and return flights are protected under Atol, the Air Travel Organiser’s License, the government-run financial protection arm of the CAA. Customers are to call +44 1753 330 330 and not pay the bill unless advised by the CAA. If you’re currently staying in a Thomas Cook owned hotel, the CAA may need to relocate you to another hotel.
Future Thomas Cook bookings
Thomas Cook is also canceling future bookings. These too are Atol protected. Customers needing a refund will have to submit a claim through Atol. However, the CAA may find a similar holiday package through another partner and offer that instead.
If any packages were booked through a third party company, the CAA says you will need to contact the booker for arrangments.
It is heartbreaking to see a historic giant like Thomas Cook go under. The company had a humble beginning in 1841, with the goal to offer the working class an affordable opportunity to travel. What’s even more heartbreaking is the 21,000 people likely out of a job.
