Over 600,000 passengers stranded as Thomas Cook collapses
No fewer than 600,000 passengers were yesterday stranded as the iconic travel operator, Thomas Cook, folded after a 178-year run.
The British holiday and tour operator collapsed in the early hours of Monday, with the management saying it had “no choice but to take steps to enter into compulsory liquidation with immediate effect.”
Thomas Cook had been scrambling over the weekend to avoid collapse after the Royal Bank of Scotland and a range of other banks demanded that Thomas Cook Group Plc find N87.5 billion ($250 million) in funding by this week. But with the British government unwilling to bailout the firm, liquidation became imminent.
The countries where the largest numbers of tourists are stranded are Spain, Turkey, Tunisia and Greece.
A total of 46 flights in and out of Spain were cancelled Monday as a result of the collapse of Thomas Cook, a spokesman for Spain’s airports operator said. The airports affected are: Fuerteventura, Gran Canaria, Lanzarote, Menorca, Palma de Mallorca and Tenerife.
Spain’s Aviation Safety and Security Agency (AESA) said Thomas Cook and its subsidiary Thomas Cook Scandinavia had 525 scheduled flights in Spain over the next 15 days, with 70 per cent heading to the UK, 12 per cent to Norway, 10 per cent to Sweden, six per cent to Denmark and two per cent to Finland.
Firm has been struggling for a while. Since May 2018, shares have fallen by more than 96 per cent amid Brexit uncertainty and intense competition in the tourism sector.
British Foreign Secretary, Dominic Raab, suggested earlier Sunday that it was unlikely the government would bail out Thomas Cook, saying ministers would not “systematically step in” to save businesses unless there was a “good strategic national interest.”
The company started as a cabinet-maker in Leicestershire, England, before a foray into the travel industry in June 1841. The founder, Thomas Cook, believed social problems were due to alcohol, and suggested a special train to carry temperance supporters to a meeting 12 miles away, according to the Thomas Cook website. Over the many decades to follow, the company expanded into hotels, resorts, cruises and airlines, to name just a few of its endeavours.
Virgin Group founder, Richard Branson, in his reaction to the development, stated that he was “saddened” to see the collapse of Thomas Cook.
“It’s upsetting to see so many people lose their jobs and thousands of holidaymakers affected by disrupted travel,” Branson wrote.
“The drop in the pound following the referendum has put even more pressure on the struggling business, which has been saddled with large debt for a number of years. All of the travel industry costs are in dollars – for example fuel maintenance and airplane leasing. With the weaker pound, the cost of everything has skyrocketed. For Thomas Cook, this has proved terminal.”
He said the tour operator “was the pioneer of organised travel and has been such a strong force in the travel industry,” adding that Virgin Atlantic “are doing all they can to find people jobs and bring stranded people home.”
Britain’s Unite union has also described the collapse as an act of “economic vandalism.” The union’s Assistant General Secretary for Transport, Diana Holland, said: “It is absolutely devastating for people, and our first priority – in addition to obviously extending our message of support to every single person – is to make sure they get paid.”
“On top of that, we need to make sure they get legal representation and (compensation) they are entitled to, but above all we are doing all we can to see if there are other opportunities with other airlines.
“It is absolutely shocking and an act of economic vandalism that this could have been allowed to happen.”
Holland says Unite represents about 3,000 of the company’s 9,000 UK-based employees.
Wendy Willis, 57, was on board a Thomas Cook plane from Orlando to Manchester, which —- according to flight-tracking website Flightradar24 – was the operator’s final flight.
Willis said the atmosphere on the flight was very somber: “Staff were crying on the plane and ground staff were really upset and tearful.”
“They were so professional and will be a credit to anyone who employs them,” she added. Willis said she learned of Thomas Cook’s collapse on Facebook before the flight took off from Florida.
“We only knew it was Thomas Cook’s last flight just before we landed, and it was confirmed by staff after we landed,” she added.
Thomas Cook posted a 1.4 billion pounds ($1.7 billion) first half-loss earlier this year. The Chief Executive Officer (CEO), Peter Fankhauser, had blamed the bad news on a number of factors.
“The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer,” he said in the release.