British global travel group Thomas Cook (including the UK tour group and airline) has ceased trading with immediate effect.
Around 150,000 British travellers and 600,000 people worldwide have had their travel plans severely disrupted following the collapse of the 178-year-old company. As a result, the government has launched a large-scale repatriation effort to bring back holidaymakers stranded overseas.
The company’s 21,000 employees, around 9,000 of whom are UK-based have all lost their jobs. This has prompted the likes of Virgin Atlantic and Tui to encourage those out of work to check available positions on their websites.
In addition its high-street business and alongside its airline operations, Thomas Cook had an established and successful pre-order concept (Airshoppen Travel Retail) which had delivered duty free goods since the 1980s.
Airshoppen began in Scandinavia and expanded into Germany and the United Kingdom. As reported, an agreement had recently been struck to deliver duty free and food and beverage items on Swedish carrier Novair.
Peter Fankhauser, Chief Executive, Thomas Cook commented: “We have worked exhaustively in the past few days to resolve the outstanding issues on an agreement to secure Thomas Cook’s future for its employees, customers and suppliers. Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable.
“It is a matter of profound regret to me and the rest of the board that we were not successful. I would like to apologise to our millions of customers and thousands of employees, suppliers and partners who have supported us for many years. Despite huge uncertainty over recent weeks, our teams continued to put customers first, showing why Thomas Cook is one of the best-loved brands in travel.
“Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder’s spirit of innovation.
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.”
Confirmation of the company’s collapse comes after Thomas Cook Group released a statement on Friday (20 September) saying it would continue to engage with a range of key stakeholders over the weekend in order to secure final terms on the recapitalisation and reorganisation of the company.
Unfortunately, discussions did not result in an agreement between the company’s stakeholders and proposed investors. The Thomas Cook board therefore concluded it has no choice but to enter into compulsory liquidation with immediate effect.
An application was made to the High Court for a compulsory liquidation of the company before start of business today (23 September). An order has subsequently been granted to appoint the official receiver as the liquidator of the company.
Thomas Cook added: “We anticipate that the official receiver will make an application to the High Court for members of AlixPartners UK LLP to be appointed as special managers in respect of the company, to act on behalf of the official receiver and we further anticipate that an order will be granted to that effect.
“As part of this process, a number of other Thomas Cook Group companies have also entered into compulsory liquidation, with members of either AlixPartners UK LLP or KPMG LLP (depending on the company) being appointed as special managers in respect of the relevant Group companies.
“We expect that AlixPartners UK LLP will now work very closely with the Civil Aviation Authority in the UK, to effect the repatriation of all UK customers impacted by this announcement.”
According to strategic market research provider Euromonitor International, Thomas Cook was the third largest travel intermediaries brand in Western Europe, with a share of 5.9% in 2019 and 16% of the UK market.
Caroline Bremner, Travel Research Manager, Euromonitor International said: “Despite Fosun’s investment, Thomas Cook failed to secure additional funding of £200m. Its collapse has caused shockwaves across the travel industry as the company was one of the truly iconic brands, launched in 1841, with great sadness for the staff who served the company and stranded passengers.”
The demise of Thomas Cook could present opportunities for companies such as TUI and Jet2 Holidays, according to Bremner. “There is also much opportunity for the leading online travel agents, Booking.com and Expedia to ramp up their package offers.
“We may even see Amazon re-enter the market with its budget flight booking site that it recently launched in India. One thing is for sure, the collapse of Thomas Cook leaves a big hole in the travel industry landscape.”