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The liquidation marks the end of a British company that started
in 1841 running local rail excursions and grew to pioneer the
family package holiday across Europe, America, Africa and the
Middle East.
Running hotels, resorts and airlines for 19 million people a
year, it currently has around 600,000 people abroad and will
need the help of governments and insurance firms to bring them
home from places as far afield as Cancun, Cuba and Cyprus.
Thomas Cook's demise, announced in the early hours of Monday
after failing to secure a deal with creditors or a government
bailout, sparked alarm at hotels where some customers have been
asked to pay their bills again by out-of-pocket resort owners.
"I'm not going to pay for my holiday again," David Midson from
England told Reuters, trying to find information at the front
desk of a hotel in Roda, Corfu. "I wish I had brought a driving
license, because I can't get a taxi (to the airport)."
As well as its 21,000 employees, the company's fall hit global
booking websites, credit card companies, travel firms using its
airlines and British high streets where its travel agents were
forced to shut.
Turkey and Greece also warned their hoteliers would suffer.
Thomas Cook has been brought low by a $2.1 billion debt pile,
built up by a series of ill-fated deals, that hobbled its
response to nimble online rivals. It had to sell three million
holidays a year just to cover interest payments.
As it struggled to pitch itself to a new generation of tourists,
the company was hit by the 2016 coup attempt in Turkey, one of
its top destinations, and the 2018 Europe-wide heatwave which
deterred customers from going abroad.
It had agreed a 900 million pound rescue package with its banks
and largest shareholder, China's Fosun <1992.HK>, but lenders
asked for an additional 200 million pounds to keep it operating
through the winter.
In desperate meetings held over the weekend, it failed to secure
more funds, with the British government also refusing a bailout,
judging it was not a good long-term bet.
EMERGENCY FLIGHTS
Prime Minister Boris Johnson pledged to get stranded British
travelers home, increasing pressure on the government just as it
tries to negotiate an incredibly complicated withdrawal from the
European Union.
"It is a very difficult situation and obviously our thoughts are
very much with the customers of Thomas Cook," Johnson told
reporters on a plane as he headed to the U.N. General Assembly
in New York. "We will do our level best to get them home."
The UK's Civil Aviation Authority (CAA) said it had a fleet of
planes ready to bring home the more than 150,000 British
customers over the next two weeks.
Thomas Cook's German airline subsidiary, Condor, said there were
240,000 people booked on its flights awaiting a return home. Its
flights are still operating for now, and it has asked the German
government for a bridging loan. In Germany, insurance companies
coordinate any repatriation.
There are around 50,000 holidaymakers affected in Greece, and
around 35,000 from Nordic countries using Thomas Cook.
"I would like to apologize to our millions of customers, and
thousands of employees, suppliers and partners who have
supported us for many years," Thomas Cook Chief Executive Peter
Fankhauser said in a statement.
At Manchester Airport in northwest England, all Thomas Cook
branding was removed from check-in desks. Pictures posted on
social media showed staff walking away from their final flights.
"Love my job so much, don't want it to end," Kia Dawn Hayward, a
member of the company's cabin crew, said on Twitter.
The collapse could provide a boost, however, to major rival TUI
<TUIGn.DE>, whose shares surged more than 10% on Monday, and to
Europe's overcrowded airline sector, which could benefit from
the closure of Thomas Cook's airline business.
CORPORATE COLLAPSE
Founded by a Baptist preacher who wanted to steer workers away
from sin, Thomas Cook went on to forge the foundations of modern
mass tourism.
On Monday, though, its own 178 year journey came to an end.
UK customers were told not to travel to airports until they had
been informed via a special website - thomascook.caa.co.uk -
that they were booked on a return chartered flight.
The website showed some flights were returning to different
British airports, but many were only running a few hours behind
the original Thomas Cook scheduled flight and the system
appeared to be working well.
The British regulator is also contacting hotels hosting Thomas
Cook customers to tell them they will be paid by the government,
through an insurance scheme. That was after some customers were
briefly held in a hotel in Tunisia when staff asked for
additional payments to be made.
In the longer term, the collapse could hit the tourism sectors
in the company's biggest destinations, such as Spain, Greece,
Turkey and the Canary Islands, where some hotels work
exclusively with Thomas Cook. Bondholders, banks and
shareholders also lost out, while aircraft leasing companies
were reclaiming their planes.
"This is an earthquake on a scale of seven, now we are waiting
for the tsunami," Michalis Vlatakis, president of the
Association of Travel Agents of Crete, told the Athens News
Agency.
(Writing by Kate Holton in London; Additional reporting by
Alistair Smout in Corfu, Noor Zainab Hussain in Bangalore, and
reporters in European bureaux. Editing by Guy Faulconbridge,
Stephen Coates and Mark Potter)
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