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Mon Sep 23, 2019, 05:36 AM

Thomas Cook collapses, leaving thousands of travelers stranded

Source: CNN



New York (CNN Business) British tour operator Thomas Cook collapsed Sunday night, stranding hundreds of thousands of travelers and putting 21,000 jobs at risk. The 178-year-old company said in a statement that its board "concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect" after talks on a financial rescue failed. "An application was made to the High Court for a compulsory liquidation of the Company before opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of the Company," it said in the statement. Peter Fankhauser, Thomas Cook's chief executive, apologized to customers, employees, suppliers and partners. "This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world," Fankhauser said.

The collapse of an iconic UK company is having ripple effects in Asia. Shares in Chinese firm Fosun Tourism dropped more than 5% in Hong Kong. Fosun Tourism's parent company Fosun International is one of China's biggest conglomerates. It owns all-inclusive holiday firm Club Med. Billionaire founder Guo Guangchang is Thomas Cook's largest stakeholder, according to data provider Refinitiv. "Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution" for its financial troubles, the company said in a statement. "We extend our deepest sympathy to all those affected by this outcome," it added.

The UK Civil Aviation Authority tweeted that all Thomas Cook bookings have been canceled. The move triggers the largest ever peacetime repatriation in the history of the United Kingdom, topping the operation the government carried out after the 2017 collapse of Monarch Airlines. There are more than 150,000 UK outbound Thomas Cook customers abroad, almost twice the number that were repatriated following the failure of Monarch, according to the aviation authority. "When people get to the end of their holiday, they will be brought back to the UK," Tim Johnson, head of policy at the UK Civil Aviation Authority, told CNN. "We've chartered 40 planes and we're going to be running over 1,000 flights over the next two weeks," he added.

Repatriation flights are only available for passengers whose journey originated in the UK. The aviation authority launched a website where customers can find details on those flights. "Customers currently overseas should not travel to the airport until their flight back to the UK has been confirmed on the dedicated website," the aviation authority said in a statement. Depending on where travelers are located, return flights will be either on flights operated by the aviation authority or by existing flights with other airlines, according to Thomas Cook


Read more: https://www.cnn.com/2019/09/22/business/thomas-cook-collapse/index.html





Yikes! I heard this on the radio this morning and what a mess!

36 replies, 4123 views

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Arrow 36 replies Author Time Post
Reply Thomas Cook collapses, leaving thousands of travelers stranded (Original post)
BumRushDaShow Sep 23 OP
Bernardo de La Paz Sep 23 #1
DFW Sep 23 #2
BumRushDaShow Sep 23 #3
hlthe2b Sep 23 #19
IronLionZion Sep 23 #23
DFW Sep 23 #30
EarthFirst Sep 23 #32
Aussie105 Sep 23 #4
cstanleytech Sep 23 #10
muriel_volestrangler Sep 23 #13
meadowlander Sep 23 #35
melm00se Sep 23 #17
IronLionZion Sep 23 #5
JI7 Sep 23 #16
hlthe2b Sep 23 #20
IronLionZion Sep 23 #21
aggiesal Sep 23 #33
dixiegrrrrl Sep 23 #36
IronLionZion Sep 23 #34
Takket Sep 23 #6
Meadowoak Sep 23 #7
BumRushDaShow Sep 23 #9
muriel_volestrangler Sep 23 #14
BumRushDaShow Sep 23 #15
Takket Sep 23 #29
IronLionZion Sep 23 #26
BlueMTexpat Sep 23 #8
sinkingfeeling Sep 23 #11
bucolic_frolic Sep 23 #12
FakeNoose Sep 23 #24
bucolic_frolic Sep 23 #28
LiberalFighter Sep 23 #18
muriel_volestrangler Sep 23 #22
MineralMan Sep 23 #25
Doodley Sep 23 #27
Initech Sep 23 #31

Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 06:24 AM

1. So venerable that the phrase "Cook's tour" is well established in the English language as metaphor.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 07:26 AM

2. Their planes were always parked here in Germany

If "Repatriation flights are only available for passengers whose journey originated in the UK," as the article says, what happens to the thousands of travelers whose trips originated in Germany or other countries? Are they supposed to try to hitch a ride on the next freighter sailing from Cancún to Bremerhaven?

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Response to DFW (Reply #2)

Mon Sep 23, 2019, 07:37 AM

3. I think the dire circumstance that you mention is why it made the news...

at least in panic-fashion from what I heard on the radio this morning.

I obviously don't know all the tax laws in other countries around the world but perhaps some countries could kick in for the transport in exchange for being able to write it off later (and/or get reimbursement at some point).

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Response to DFW (Reply #2)

Mon Sep 23, 2019, 09:34 AM

19. Frankly, I was surprised to hear the UK government was sending planes to repatriate. Would OURs?

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Response to hlthe2b (Reply #19)

Mon Sep 23, 2019, 09:53 AM

23. Sounds like socialism

I doubt Trump would sign off on such an expensive tax funded effort that doesn't benefit him somehow. Maybe if it was on his planes or have people stay at his hotels.

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Response to hlthe2b (Reply #19)

Mon Sep 23, 2019, 11:00 AM

30. I think that would depend on three things

1. Who was president at the time

2. Where the passengers were stranded

3. If the president was a Republican, would he or any of his friends profit from the action?

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Response to hlthe2b (Reply #19)

Mon Sep 23, 2019, 12:28 PM

32. The State Department would arrange travel...

However the traveler(s) would be responsible for compensating the government for their travel expenses accrued to the State Department.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 07:42 AM

4. Thomas Cook:

Revenue: £9.584 billion GBP (2018)
Headquarters: Peterborough, England
CEO: Peter Fankhauser (Since 2015)
Founder: Thomas Cook

(from a quick Google)

So from doing well to a full collapse? Sounds suspicious.

But a 'sorry' to the stranded tourists and those about to lose their jobs sounds a bit inconsequential and inadequate.

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Response to Aussie105 (Reply #4)

Mon Sep 23, 2019, 08:08 AM

10. That's revenue not profit and if they aren't making profit and losing

money instead then all the revenue in the world will not help them.

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Response to Aussie105 (Reply #4)

Mon Sep 23, 2019, 08:35 AM

13. It's a long time since they were 'doing well' - they nearly collapsed in 2011

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Response to muriel_volestrangler (Reply #13)

Mon Sep 23, 2019, 03:12 PM

35. To be fair, who still uses a travel agent since the invention of the internet?

I'm sorry for the people who lost their jobs but it's not like the writing hasn't been on the wall for thirty years.

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Response to Aussie105 (Reply #4)

Mon Sep 23, 2019, 09:01 AM

17. Their financials

indicate that they lost £163,000,000 last year and barely (in relative terms) broke even in previous years.

What seems to have dragged them down are, is the debt service that they carried which wiped any profit out.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 07:44 AM

5. I wonder if Brexit played a role in this

178-year-old company and their airlines have TSA Pre-check, maybe people are flying less? The leisure airline business is very difficult due to the constantly changing demand, unlike business travel.

Would also like to point out that government socialism is stepping in to help people when capitalism has failed them.

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Response to IronLionZion (Reply #5)

Mon Sep 23, 2019, 09:01 AM

16. yes, brexit and climate change.

 

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Response to IronLionZion (Reply #5)

Mon Sep 23, 2019, 09:35 AM

20. THis is my first thought. Even if their problems didn't start with Brexit it had to push them over.

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Response to hlthe2b (Reply #20)

Mon Sep 23, 2019, 09:41 AM

21. They are better organized and more established than other failed airlines

so this is a very concerning indicator of where the global economy is heading, definitely the British/European economies if people are cutting back on holiday travel. Europeans love to travel, way more than Americans.

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Response to IronLionZion (Reply #5)

Mon Sep 23, 2019, 01:54 PM

33. Yup, it's called

Privatize the profits (or assets)
Socialize the debt (or bailouts)

Exactly what happened with the housing crisis of 2008.

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Response to aggiesal (Reply #33)

Mon Sep 23, 2019, 05:22 PM

36. Exactly what California's utility, PG&E, is doing....

and has done in the past.

The laws about a corporation/business bankruptcy procedure now allows a company to form an LLC where all the debts go, and the income/profits can be in a new or the existing company.

the hedge fund that took over Sears, same deal, after the fund grabbed all the cash, and added tons of debt.

It's a legalized version of a mob tactic called a "bust out", as made famous in the gangster movie
Goodfellows.

Many of Trump's bankrupt businesses were because he refused to pay the bank loans back,which actually saved him tons of money, when the loans were written off. He bragged about it, in fact.


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Response to IronLionZion (Reply #5)

Mon Sep 23, 2019, 03:05 PM

34. Brexit's role in Thomas Cook's demise

https://www.cnn.com/2019/09/23/business/thomas-cook-collapse/index.html

Brexit hits travel spend
Richard Branson, founder of the Virgin Group, said in a blog post that the steep drop in the value of the pound following the 2016 Brexit referendum had piled the pressure on the heavily indebted and "struggling" Thomas Cook.
"All of the travel industry costs are in dollars — for example fuel maintenance and airplane leasing. With the weaker pound, the cost of everything has skyrocketed. For Thomas Cook, this has proved terminal," Branson said, adding that he was "saddened" to see the end of "the pioneer of organized travel."

The roughly 20% fall in the pound's value also meant less spending power for UK travelers abroad. That led them to demand better deals, independent aviation analyst Chris Tarry told CNN Business. This hurt margins at Thomas Cook, which sold flights on its own airline, along with hotel rooms, from brick-and-mortar stores.
"Brexit squeezed demand and made what Thomas Cook were trying to upsell on — that is, the heritage and service — less relevant to consumers. With a less ideal cost base, they couldn't compete simply on price with new entrants," said Richard Clarke, an analyst at Bernstein.

Thomas Cook said in its annual Holiday Report in 2019 that fluctuations in the value of the pound had reduced demand for travel to countries that use the euro. All the while, it has been fighting competition from online booking agencies and discount carriers.

One more problem: Continued uncertainty over Brexit had scared away some potential customers.
"There is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer," Thomas Cook chief executive Peter Fankhauser said in an earnings statement in May.


Currency issues and people have been cutting back on travel. Maybe alcohol makers might be doing well through Brexit as people drink more to cope with it.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 07:47 AM

6. Oh I saw a headline about a Thomas Cook collapsing...

Thought it was a person! lol

You will see many many more collapses once Brecht takes effect.

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Response to Takket (Reply #6)

Mon Sep 23, 2019, 07:55 AM

7. I thought it was a bridge. Lol

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Response to Takket (Reply #6)

Mon Sep 23, 2019, 07:59 AM

9. His collapse

happened about 127 years ago and the reporting would have been outside of LBN criteria.

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Response to Takket (Reply #6)

Mon Sep 23, 2019, 08:37 AM

14. I assume you have a literary spellchecker that prefers 'Brecht' to 'Brexit'! (nt)

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Response to muriel_volestrangler (Reply #14)

Mon Sep 23, 2019, 08:48 AM

15. As a note - I just typed "Brexit" in my iPhone text app and it offered "Brecht" as an option too.

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Response to muriel_volestrangler (Reply #14)

Mon Sep 23, 2019, 10:45 AM

29. Apparently

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Response to Takket (Reply #6)

Mon Sep 23, 2019, 10:35 AM

26. Groom named Thomas Cook has wedding ruined by Thomas Cook collapse

https://www.cnn.com/uk/live-news/thomas-cook-dle-intl-hnk/index.html

A groom who shares the same name as the travel operator Thomas Cook has had his wedding plans ruined by the company's collapse.

Cook and his partner, Amelia Binch, were due to get married on the Greek island of Rhodes on Friday.

Now they are stranded, and aren't sure if the wedding can go ahead.

If it does, they don't yet know whether any of their friends will make it to Greece in time for the ceremony.

“We found out today in the early hours,” Binch told CNN. “We were devastated and still are!”

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 07:58 AM

8. This is sad.

I remember booking airline tickets to the US through Thomas Cook in the 1960s when I lived in Morocco. I would use their calendar pictures to decorate our apartment there.

It has long been the gold standard for travel. Sic transit gloria.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 08:22 AM

11. Sad to see this happen to another well respected company.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 08:26 AM

12. No financial rescue means no loans

Is money tightening like 2008 all over again? Because the FED had those overnight rescues last week, Monday to Wednesday last I heard, overnight rates shot upward around 10% which is unheard of except for 2008. Now we have no money for an icon of British industry. Makes one wonder.

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Response to bucolic_frolic (Reply #12)

Mon Sep 23, 2019, 10:22 AM

24. In 2008-09 the US Treasury only rescued US banks that were "too big to fail"

... and steps were taken to shore up high-employment industries such as auto manufacturing. I don't believe the US treasury would ever save a foreign private company. Why would they?

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Response to FakeNoose (Reply #24)

Mon Sep 23, 2019, 10:40 AM

28. I didn't mean to imply the Fed would or should rescue a British company

My post was about two current events that show tight money - 10% overnight rates and no money for T. Cook - one domestically, and one in UK.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 09:05 AM

18. Too big to fail?

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Response to LiberalFighter (Reply #18)

Mon Sep 23, 2019, 09:51 AM

22. no, that's the point

The company has gone into liquidation (not just administration - this is straight to "sell off the assets to pay off creditors as much as you can" ).

There's a national scheme called ATOL which covers package holidays already started; but some flight-only customers may not be covered by it; the government is saying they'll arrange a flight back to the UK. Anyone whose vacation hasn't started won't get it, and becomes another creditor waiting to see if they get paid back (or their credit card company does - this is why people advise paying for holidays with a credit card; or if they had travel insurance they can claim on that).

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 10:26 AM

25. Thomas Cook was running recently as a Ponzi Scheme.

It was using future bookings funds to pay for returning customers. When bookings fell off, due to Brexit and other uncertainty, they didn't have the funds available to keep operating.

I wonder how long the company has been operating in the red?

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 10:36 AM

27. Other highly successful travel firms emerged while TC struggled. They didn't move with the times.

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Response to BumRushDaShow (Original post)

Mon Sep 23, 2019, 12:06 PM

31. Hedge Fund criminals strike again!

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