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Thomas Cook Collapse Leaves 150,000 Holidaymakers Stranded Abroad


© 2019 Bloomberg Finance LP

The Topline: The world’s oldest holiday firm, Thomas Cook, has entered compulsory liquidation after 178 years in business — stranding hundreds of thousands of holidaymakers and setting off what is being described as the U.K.’s largest peacetime repatriation in history.

  • Thomas Cook was still advertising deals for weeklong trips to Greece on Sunday evening amid knife-edge rescue talks.
  • But hours later, around 2 a.m. local time on Monday, the U.K.’s Civil Aviation Authority announced the company had ceased trading and that all flights and bookings were cancelled.
  • The collapse of the airline and holiday group will impact travel plans for around 1 million people. 
  • Last-minute talks to save the holiday group failed after its bosses were unable to raise $250 million demanded by its banks to keep trading. Chinese firm Fosun, the firm’s largest shareholder, had agreed a $1.1 billion rescue deal in August. 
  • The Civil Aviation Authority and the U.K. government have teamed up to hire 40 planes to bring customers back in what is being called “Operation Matterhorn,” which may take as long as two weeks. The British government had earlier this week turned down a state bailout for the company. 
  • The jobs of around 22,000 Thomas Cook staff around the world, with 9,000 employees in the UK alone, are at risk. 
  • The impact of the firm’s collapse will spread much further than its customers and employees. The British government is facing a $75 million bill to bring home holidaymakers, insurers face a wave of travel insurance claims, while Tunisian hoteliers are owed $65 million alone, according to Reuters.

Key background: A 2007 merger with MyTravel was meant to save the companies more than $93 million a year and unite them against emerging internet rivals. The deal only pushed Thomas Cook further into debt while the business, which still has 560 high street stores, struggled to adapt to changing consumer habits. In May, the group reported losses totaling more than $1.8 billion

The company already narrowly avoided a shutdown in 2011 after accessing emergency funding, but it added to the company’s debt. Since 2011, Thomas Cook has paid nearly $1.5 billion in interest — more than a quarter of their profits went to lenders. 



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