Thomas Cook folds, six lakh tourists stranded

On Monday, the world’s oldest travel company, Thomas Cook, collapsed leaving six lakh holidaymakers stranded across the planet & sparking the British Govt’s biggest repatriation since World War II as it scrambled to bring 1.5 lakh UK tourists back home from far-flung destinations.

The 178-year-old debt-plagued group, which had fought against the fierce online competition for some time & blamed Brexit uncertainty for a recent drop in bookings, announced bankruptcy after failing to secure £200 million (Rs 1,770 crore) from private investors. Monday’s development, which followed a lengthy period of chronic financial turmoil after a disastrous 2007 merger deal with MyTravel, left Thomas Cook’s 22,000 staff out of job.

Thomas Cook’s disastrous 2007 merger with MyTravel left it with huge debts

Authorities in the United Kingdom began an official investigation into the corporate collapse, according to a Downing Street spokeswoman who also cautioned that there were “a number of complicated reasons behind the failure”.

Thomas Cook said “despite considerable efforts”, it was unable to reach an agreement between the company’s stakeholders & proposed new money providers. “The company’s board has therefore concluded it had no choice but to take steps to enter into compulsory liquidation with immediate effect,” it added. The long-troubled group has also been blighted by enormous costs arising from its disastrous 2007 merger with MyTravel, a deal which left it plagued with huge levels of debt.

The UK Govt said it had hired planes to fly home British tourists, in a mass repatriation plan codenamed ‘Operation Matterhorn’ which began immediately. Launching Britain’s “largest repatriation in peacetime history”, transport secretary Grant Shapps said the Govt & UK civil aviation authority had hired dozens of charter planes to fly home Thomas Cook customers.

As well as grounding its planes, Thomas Cook has been forced to shut travel agencies, leaving the group’s 22,000 global employees — 9,000 of whom are in UK — out of a job.

Chinese peer Fosun, which was already the biggest shareholder in Thomas Cook, had agreed last month to inject £450 million into the business as part of an initial £900 million rescue package. In return, Fosun was to acquire a 75% stake in Thomas Cook’s tour operating division & 25% of its airline unit. “Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution for its proposed recapitalisation with other affiliates, core lending banks, senior noteholders & additional involved parties,” it said.

Despite recent annual turnover of £10 billion from transporting about 20 million customers worldwide, Thomas Cook, which started in 1841, grew into a huge operation but fell into huge debt. The company’s failure comes just two years after the collapse of UK’s Monarch Airlines.

Thomas Cook’s demise caps a dramatic fall from grace for a company which was demoted from London’s FTSE 100 shares index in 2010 — & from the second-tier FTSE 250 last year. Its shares are worthless & now suspended.

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