New Delhi: The United Kingdom’s global tour operator Thomas Cook declared bankruptcy overnight, leading to chaos at airports and hotels as about six lakh tourists, including 150,000 Britons, saw their plans thrown into disarray.
However, this meltdown will not have any impact on Thomas Cook (India) which is a different entity as it was acquired by Canada-based Fairfax Financial Holdings in August 2012.
The 178-year-old travel giant cancelled all its flights, leading the government to initiate its biggest repatriation effort since the Second World War. A rescue fleet has been scrambled to bring back holidaymakers stuck overseas. Code-named Operations Matterhorn, dozens of chartered planes, from as far afield as Malaysia, have been hired to fly customers back home free of charge.
The company’s 21,000 employees — around 9,000 of whom are UK-based — have lost their jobs, with 600,000 people worldwide having their travel plans disrupted.
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. Heat waves 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 UK 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 late on Monday and officials warned that delays are inevitable.
The Civil Aviation Authority (CAA) said with Thomas Cook ceasing trading, its four airlines will be grounded. The company had several months ago blamed a slowdown in bookings because of Brexit uncertainty for contributing to its crushing debt burden.
The company’s CEO, 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.
The CAA said it had arranged a fleet of aircraft for the complex repatriation effort, which is expected to last two weeks.
Thomas Cook said on Friday last it needs to raise £200 million in funding to avoid a collapse and had approached the UK government for a bail-out, but failed to strike a deal.
Travelers on Thomas Cook vacation packages and flights were advised by the government not to cut short their trips, with the civil aviation regulator planning to repatriate customers as close as possible to their booked return date. The government will also cover the cost of accommodation for Thomas Cook customers.
The collapse deals another blow to the European travel sector, just months after the bankruptcy of Icelandic budget airline, Wow Air. The carrier shut down its operations in March due to lack of financing, leaving 2,700 fliers stranded and hurting the country’s economy.