What the Thomas Cook collapse means for customers and investors | FT

What the Thomas Cook collapse means for customers and investors | FT

The collapse of Thomas Cook
has ruined the livelihoods of 21,000 staff working for the
troubled travel company who now stand to lose their
jobs and disrupted the holidays of hundreds
of thousands of customers. The British government has
launched Operation Matterhorn, the biggest peacetime
repatriation of UK citizens, which will fly 150,000 British
holidaymakers back home. But for hundreds of
thousands of customers who have booked package
holidays and flights with Thomas Cook, what are your rights now
that the company has entered administration? Let’s start with those
currently overseas. Over the next two weeks, the
UK’s Civil Aviation Authority has committed to fly
home all Thomas Cook customers with return flights
who are currently overseas. It says it will endeavour
to get people home as close as possible to their planned
travel dates and has set up a dedicated website –
ThomasCook.caa.co.uk – where affected customers can
find details and information on repatriation flights as well
as advice on accommodation. The regulator has also set up
a 24-hour helpline for Thomas Cook customers, which can be
reached on 0300-303-2800 from the UK and Ireland and
+44-1753-330-330 from overseas. All UK customers who have
booked a package holiday – that’s hotel and
accommodation – will be covered by ATOL,
the consumer protection scheme which is funded
by industry levies. This guarantees to
fly customers home in the event of
a company failure and refund the cost of
replacing ATOL-protected parts of their trip as
well as covering out-of-pocket expenses as a
result of delayed flights home. Now normally,
customers who had only booked a flight
through Thomas Cook would not be covered
by ATOL protection. But the CAA has
confirmed that it will fly home both ATOL
and non-ATOL customers. It stresses that customers
who are currently overseas should not travel to the
airport until their flight back to the UK has been confirmed
on the dedicated website. So what about those
who have yet to travel? Thomas Cook customers in Britain
have already been told not to go to the airport, as all
flights leaving the UK have been cancelled. ATOL-protected passengers with
future package holiday bookings will be entitled to a full
refund for their cancelled holiday. But this will take
some time to process. The CAA says it will
not be in a position to start accepting claims
until next Monday, the 30th of September, and has
warned that from then it could take as long as 60
days after that for the money to be refunded, which takes
us to the end of November. This will unfortunately
leave many passengers with a rebooking dilemma. As they wait to get
their money back, the price of flights and
holidays with rival tour operators is going up. Travel experts are
already warning it could take even longer, due
to the huge scale of Thomas Cook’s operations. When Monarch collapsed
in 2017, the CAA had to process 30,000
claims under ATOL and managed to
refund 80 per cent of those within three months. But it is estimated it will
receive hundreds of thousands for Thomas Cook. When its claims website
goes live next Monday, those making a claim
will need to provide their ATOL certificate issued
at the time of their package holiday booking and
proof of payment in the form of bank or
credit card statements. Those who only booked a flight
through Thomas Cook’s airline will need to make a claim
through their travel insurer or attempt to get their money
back through their credit or debit card provider. Finally, while all
the upheaval is distressing for
holidaymakers, you will get your money
back eventually. Sadly, the same cannot be said
for the thousands of staff who stand to lose their
jobs at Thomas Cook. So for investors, this
means a number of things, depending on what kind
of investors they are. Equity investors will
be wiped out by this. But they would have been, in
most circumstances, anyway. And equity investors
have been pulling out of this stock for a long time. Its troubles are
maybe 15 years old. This business has been
badly-run for many years. It’s had three really quite
underwhelming chief executives. We’ve seen a slow
decline in its market. It’s been very badly positioned. I think if you’re looking around
the travel industry space, it also shows that there
are some opportunities. There are some other
businesses that have been doing very well
by being a little more agile than Thomas Cook has been. There’s a company called
Dart, for example, which is a UK-listed
holidays and airlines group. They’ve been going
up this morning. TUI, a big German group, which
has a large UK side as well, has also seen a bounce
in the shares today. But I think you also
have to think deeply about how legacy businesses
with lots and lots of balance sheet invested in things
like hotels and cruise ships are going to do. This is now quite an
asset-light sort of industry. And there are a lot
of online startups who have been
disrupting what had been a very stable and
comfortable space for people like Thomas Cook. Other investors, if you look
at people who have bonds, for example, or loans
extended to Thomas Cook, they will probably get
back less than expected as a result of this being
an insolvency process rather than an administration. When Monarch Airlines went
under, parts of it were bought. And that meant that more
went back to debt investors than would have
otherwise been the case. The interesting question is what
credit default swap investors get because there
is a theory which is abroad at the
city this morning that what happened here was
that investors in credit default swaps, which pay out when a
business can no longer meet its loan or bonds obligations,
may have encouraged this collapse and also
nudged it in the direction of an insolvency rather
than an administration. That could be a very politically
explosive conclusion, if it’s correct.

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About the Author: Oren Garnes


  1. Always overly greedy directors and bosses at the top receiving ridiculous salaries and bonuses at the expense of so many others 👎

  2. They did this on purpose, they clearly had sales on to trick people to put money into the businesses hands and then it goes bust.

  3. That's what happens when you don't take rebranding seriously -the management must've thought it was funny to ask for their new logo design to be based on a sticky plaster, instead of comitting funds towards a comprehensive customer focused campaign. Clearly an investigation is called for.

  4. 'HOLIDAYS AT AIRPORT LOUNGES' – Cheap Meals – Chairs to sleep on – Guaranteed Refund if not pleased with facilities – Guaranteed Return Home Anywhere in the UK by Train, Coaches, Donkeys, and Camels Free Of Charge.

  5. My answer to Thomas Cook travel airline if we are not paying for the EU all this money every years 20 billions pounds plus all the costs in Britain for them hospital housing transport plus lots more we will give it you all what you need but no we couldn't because the supreme Court today support the EU so we can't say sorry but can be lots of big business are going to be destroyed by the supremme court designed you have to ask the court why have you done that for us ist Britain first or the EU first. ? by Hollywood mo RAAD political madical sicoligest Judges on Google youtube International? Mo?

  6. This country we call the U.K. send billions of pounds of our tax payers money to other countries … So why can't it save a UK company and save there jobs….feel disgusted and let down…if Thomas Cook was a bank they would still e trading….

  7. BBC you are not welcome to my pages on Google youtube International back off nothing from the BBC aloud on YouTube International understand. ? Mo?

  8. What type of filthy scumbag rats running airlines, up their prices 400% to rip off people who are trying to save the holidays they saved up all year for. My daughter & family lost the £650 they paid T. Cook for return flights to Reus Airport. Ratbag airlines now want £2.800 for the same flights, she can’t afford this so she & kids have lost their holiday. How many other people are in her position? These greedy stinking scumbags should be dragged in front of a high court judge to explain themselves. Then publish the name and address of every one of them!!! 👹

  9. I don't understand. The company collapsed, but, haven't the customers ALREADY PAID for the flights? Did the planes belong to Thomas Cook or something?

  10. Run by Spivs & Molls destroyed by the corporate greed of a board of directors who bled it dry !!!!!!!!!👿👿👿👿👿👿👿👿👿👿👿👿👿👿👿

  11. Welp i used to fly with thomas cook and now…… 5 years since I flew with thomas cook……. ive never had been so sad in my life

  12. Thomas Cook travel firm owned by the largest shareholders of Chinese firms! This is the sign of the times, which proved China's economy is facing difficulties. Blexit is the right thing to do because China has been buying all EU.

  13. I booked with Loveholiday in February… due to fly on October 15th & got refunded today. I didn’t even call or email them to ask what was going on – brilliant customer services

  14. The British government should at least bore the costs to all travellers for their paid vacation costs.
    Why the UK government?
    Because the UK government has been profiting and collecting taxes from Thomas Cook's businesses since over a hundred years!

  15. 22000 employees lose their jobs … 50 million is swiped by fat-cat board members and 150 million is miscounted by corrupt bean-counters and lawyers, the UK loses a national treasure – BUT you won't see one spend one hour where they ALL belong – IN A JAIL CELL ! It's the Carrillion syndrome again !

  16. Shame their greedy asses couldn’t give some of that fifty million they paid themselves to the people who DON’T HAVE JOBS ANYMORE.

  17. Maybe we should unite for all the homeless people in Britain to. Oh and the other millions of people that lose jobs every year…

  18. Bosses should scrap higher salaries plus bonus and save money for business to keep afloat and protect employers… business like travel firms should set up emergency backup fund just in case if debt mount up then use backup fund to pay off bosses dont work thier homework.. just taking big money.. otherwise high street will be ghost aa empty shops..

  19. Badly positioned executives?????? Really????? First time I heard this in England… we don't have badly positioned managers or executives here!

  20. That was a stupid decision by the government and a lost change to show capitalism works – at least to a certain extent. China is now laughing. The government should have availed a credit access of the £250 m requested, then required management to forego their bonuses and to relinquish any share options granted in lieu of payment back into the company until the company regained solvency, taken more seats on the board for government administrator and workers, merged a very suave digital tour company with Thomas Cook to revamp online sales and digitize bookings, closed non-performing outlets and reduced staff. That surely would have saved all those jobs

  21. Very sad for everyone involved with losing jobs or holidays. Is it True this company was actually owned by Germany 52% and China 48% the only British connection was the Brand Name??/ or is this not correct???

  22. can someone explain how a company like TC being operating for nearly 180 years just goes bust like that there has been some serious min-management by those CEO i hope the government orders a public inquiry this is scandelous

  23. Let this be a lesson for other company’s that don’t move with the time. If you try to fleece your customers they will shop elsewhere

  24. Immediate investigation into Thomas cook CEO's bonuses, must be brought to the forefront of this disastrous collapse…Force these corrupt "scumbag" directors to hand back to customers all their losses, plus compensation for inconvenience caused to all staff & travellers !!

  25. Here in greece even that our hotels lost 600 million euros because of Thomas cook we all were welcome and understood what british people have to deal with..i think all hotels helped everyone go back to their home safe! In addition with tunysia and spain that were asking british people to pay and locked them in their rooms… We created welcoming for strangers long time ago gyus.. but dont step on our feet in difficult times you see your friends!😉

  26. This is truly a national disaster with over 21,000 UK jobs lost and over 150,000 UK holidaymakers stranded abroad. This won't happen under Trump administration. Brexit is coming.


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