Thomas Cook Collapses – 9000 jobs lost and thousands stranded overseas
The UK Civil Aviation Authority (CAA) made the announcement at 2am this morning after the company had spent the weekend trying to raise £200m in extra funding.
Chief Executive Peter Fankhauser said the collapse was a matter of profound regret and he apologised to the company’s millions of customers and thousands of employees, 9,000 of whom are based in the UK and are now unemployed.
The CAA confirmed that the government had asked it to launch a repatriation programme called Operation Matterhorn beginning today and running until Sunday 6th October.
Over 150,000 UK holidaymakers who booked with Thomas Cook are currently abroad and will need to return. Dame Deirdre Hutton, CAA Chair, confirmed that: “Every single person will be brought back home at the end of their holiday, free of charge” although she also asked for patience from travellers as the biggest peacetime repatriation in UK history gets underway.
A dedicated website has been set up with important information for travellers including not to travel to an airport until their new booking and flight has been confirmed.
The Business Secretary Andrea Leadsom said she would be writing to The Insolvency Service to ask them to fast-track their investigation into the circumstances surrounding the company’s collapse.
There is also information for employees regarding redundancy arrangements.
We’ve previously written about what happens when an airline collapses leaving customers stranded abroad and have advised travellers to either take out or make sure their flights have SAFI (Scheduled Airline Failure Insurance).
Chris Horner, Insolvency Director with Business Rescue Expert, said the writing had been on the wall for Thomas Cook for over a year.
He said: “They’ve had three profit warnings over the past 12 months and posted losses of £1.5bn for the first 6 months of this financial year alone.
“A triple threat of increased competition from online providers, a general overall decline in demand for package holidays and the shadow of Brexit and Middle East unrest putting of travellers from booking in Autumn and the New Year.
“Their ATOL licence was due for renewal on 1st October, which is why the need for funds and proof of liquidity was so pressing. It’s impossible for an airline to trade while insolvent because of astronomical insurance costs which is why the flights are grounded.
“The repatriation exercise will be further complicated because not every customer will be covered by ATOL, only those who have booked a full package holiday.”
Some Thomas Cook customers were effectively held hostage at a hotel in Tunisia over unpaid bills at the weekend but they will be hoping their return flights will be sooner rather than later.
This is an ongoing story and we will update it with further developments but it should remind every business owner that even small blips and troughs can turn into insurmountable cliffs and chasms very quickly.
Contact us to set up a free initial consultation with one of our expert team of advisors today. The sooner we can talk through your business’s position and options, the sooner you can act to hopefully secure its future.