Britain’s biggest ever peacetime repatriation has got under way in an effort to bring home 150,000 holidaymakers who were stranded after Thomas Cook entered liquidation at 2am on Monday 23rd September.
The fall of one of the world’s oldest travel companies, often referred to as the greatest name in travel, puts 21,000 jobs at risk and 550 shops in Britain now face closure.
What went wrong? After all, it was only a few days ago we were hearing of a rescue deal in the final stages of being secured.
Thomas Cook had secured a £900m rescue deal led by its largest shareholder Chinese firm Fosun in August, but a recent and unplanned demand from its banks to raise a further £200m in contingency funding had put the deal in doubt.
Despite spending the entirety of Sunday 22nd September in talks with lenders to secure the additional funding, Thomas Cook were unable to and were left with no choice but to cease trading with immediate effect.
Thomas Cook has blamed a number of issues including political unrest in holiday destinations such as Turkey, the UK 2018 prolonged heatwave and customers delaying booking holidays because of Brexit.
Michael Roome, Partner at Smith Cooper comments: “The travel sector is one which has come under many pressures over the past years. The increase in competition, particularly from low budget airlines, means that there are now more players in an already saturated market and with the way consumers actually book holidays changing rapidly as technology continues to develop, it could be argued that Thomas Cook’s offering was no longer aligned to what customers really wanted.
Unlike other travel agencies, Thomas Cook also had over 500 high street shops in Britain all of which incurred rental and other costs. This too added to the financial pressure we have seen over the past few years.”
What to do if you if you have a holiday booked with Thomas Cook
Michael, who worked with tour operator Student Adventures, following its failure in September 2014, continues: “Fortunately, all Thomas Cook holidays are ATOL protected. These means that the ATOL scheme will cover your accommodation costs abroad, although you may have to move to a different hotel or apartment.
ATOL will also pay to have you brought home if the airline is no longer operating. If you have a holiday booked in the future, you will also be refunded by the scheme.
If you have booked a flight-only deal, we would recommend contacting your credit card provider or your travel insurance company. If you have paid by debit card, you may be able to apply for a chargeback. However, from our experience in the industry, those that have lost out may have to wait to recover their losses and, in some instances, may not be successful in recovering anything”
If you are facing any financial challenges, or have any general enquiries and would like to speak to a member of our award winning Business Recovery and Insolvency team, please get in touch.