Thomas Cook Group, one of the oldest travel firms and once considered as a pillar in the industry, has entered compulsory liquidation effective immediately. All of its flights and tours were all cancelled leaving hundreds of thousands of customers and employees in limbo.
All Thomas Cook bookings, including flights and holidays, have now been cancelled. It is estimated that at least 600,000 holidaymakers worldwide will be affected. This forced the government to coordinate with insurance companies and other airlines to help people get back home.
The UK Civil Aviation Authority and Government vowed to help some 150,000 Brits currently abroad and are organising new flights home for Thomas Cook passengers. However, the fate of other customers remains unknown.
Foreign Secretary Dominic Raab reassured British travellers that “in the worst-case scenario, the contingency planning is there to avoid people being stranded.”
Thomas Cook CEO Peter Fankhauser said in a statement, “I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years.”
What happened?
Overburdened by a crippling USD 2.1 billion debt, the travel firm had until 11:59 pm of Sunday to secure funds to pay off creditors. In a last attempt to save the company, Thomas Cook held a very important meeting. However, the last-ditch of effort to negotiate restructuring failed.
Thomas Cook needed another GBP 200 million on top of a GBP 900 million package it had already agreed, to see it through the winter months when it receives less cash and must pay hotels for summer services.
Thomas Cook bosses met lenders and creditors in London on Sunday to keep the company afloat. Unfortunately, they failed.
Why didn’t the government save Thomas Cook? Raab said that the ministers did not “systematically step in” when businesses went under unless there was “a good strategic national interest”.
Thomas Cook has struggled with a decline in tour and flight bookings, online rivals, higher fuel prices and uncertainty surrounding Britain’s planned departure from the European Union.
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