The world’s oldest travel firm, Thomas Cook, ceased trading on Monday after attempts to secure an additional £200 million credit line failed. The British government denied a call to step in with a £250 million bailout.
The British company was founded in 1841 but on Monday it entered compulsory liquidation. The firm has over 19 million customers and 22,000 employees in 16 countries. For now, Thomas Cook’s Indian, Chinese, German and Nordic subsidiaries will continue to trade as normal, as they are regarded as separate to their parent company.
In 2018, the company had a turnover of €10,85bn but has a debt of just under €2bn. Without the necessary additional liquidity, the company would have been unable to get through the winter months and pay advances on hotels for summer services.
The result is 600,000 tourists stranded worldwide as its 105-planes fleet has been grounded, triggering what the BBC called “the largest peacetime repatriation effort in British history.”
The British government has asked the UK Aviation Authority to coordinate the repatriation effort, chartering 45 jets to bring back tourists from 64 destinations. In Germany, it is insurance companies that are taking the lead in repatriation efforts.
“I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years,” Thomas Cook CEO Peter Fankhauser said.
From New York, prime minister Boris Johnson questioned why the state should responsible for the actions of handsomely paid directors and wondered why tour operators in the UK are not covered by insurance; this is precisely the system that is in place in Germany and the Netherlands.
“You need to have some system by which tour operators properly insure themselves against this kind of eventuality,” Johnson said.
Thomas Cook was hit hard by the 2016 coup attempt in Turkey and the 2018 Europe-wide heatwave which deterred customers from going abroad. It is feared that thousands of tourists are left in hotels that have not been paid for, from Goa to Greece. About 50,000 tourists are stranded in Greece alone, according to Reuters, mainly on islands.