Hundreds of thousands of travellers have been stranded across the world after British tour company Thomas Cook collapsed in the middle of the night, immediately halting almost all its flights and hotel services and laying off its employees.
Britain’s Civil Aviation Authority announced about 2.30am on Monday that Thomas Cook, a 178-year-old company that helped create the package tour industry, had ceased trading. It said the firm’s four airlines will be grounded, and its 21,000 employees in 16 countries, including 9000 in the UK, will lose their jobs.
The collapse of the firm is expected to have sweeping effects across the European and North African tourism industries and elsewhere, as hotels worry about being paid for tourists they have already served and confirmed Thomas Cook bookings for high-season winter resorts suddenly are cancelled.
Overall, about 600,000 people were travelling with the company as of Sunday, though it was unclear how many of them would be left stranded, as some travel subsidiaries were in talks with local authorities to continue operating. Thomas Cook says it served 22 million customers a year.
It’s going to cost £600 million to repatriate all the Thomas Cook holiday makers from wherever they all are, wouldn’t it have been cheaper (and so much less hassle) to give Thomas Cook the £200 million to survive? All those lost jobs, the economy repercussions..?🤷♀️ #ThomasCook
— Alex Phillips (@Alexpofficial_) September 23, 2019
The British government was taking charge of getting the firm’s 150,000 UK-based customers back home from vacation spots across the globe, the largest repatriation effort in the country’s peacetime history. The process began on Monday but officials urged patience and warned of delays.
A stream of reports on Monday morning hinted at the extent of the travel chaos: about 50,000 Thomas Cook travellers were stranded in Greece; up to 30,000 stuck in Spain’s Canary Islands; 21,000 were left in Turkey and 15,000 were in Cyprus. Airports saw queues of Thomas Cook travellers lining up for other ways to get home.
The company, which began in 1841 with one-day train excursions in England, grew to have travel operations around the world but has been struggling for years as a result of competition from budget airlines and the ease of booking low-cost accommodations through the internet.
Adding to its crushing debt burden, Thomas Cook operated a fleet of 105 airline jets and had extensive real estate costs, including about 550 travel shops on major streets across Britain and 200 hotels in sun-drenched countries.
Still working to assist all guests out in resort and help them get Home. I’m not going to be paid my wage for the last month and all work now is volunteer work, but I will continue to smile ❤️ #weareonethomascook #thomascook 💛💛💛 pic.twitter.com/4iLcLv0NVw
— Katie haycraftyyy (@katiehaycraft5) September 23, 2019
“The growing popularity of the pick-and-mix type of travel that allows consumers to book their holiday packages separately, as well as new kids on the block like Airbnb, has seen the travel industry change beyond all recognition in the past decade, as consumers book travel, accommodation, and car hire independently,” said Michael Hewson, chief market analyst at CMC Markets.
Terror attacks in recent years also hit tourist destinations like Egypt and Tunisia, hurting business, as did heat waves in Northern Europe, which encouraged people to vacation in their own countries.
— markmufc1821 (@markmufc1821) September 23, 2019
Things got worse this year, with the company blaming a slowdown in bookings on the uncertainty over Brexit. A drop in the pound also made it more expensive for British vacationers – one of the company’s key markets – to travel abroad.
Thomas Cook had said on Friday it was seeking STG200 million to avoid going bust and held talks over the weekend with shareholders and creditors in a failed attempt to stave off collapse.
— jamie|MightyRaider| (@RaiderOnMixer) September 23, 2019
British authorities said they had chartered dozens of aircraft to fly customers home free of charge over the next two weeks, and hired hundreds of people to staff call centres and airport operations centres.
British Prime Minister Boris Johnson, who was travelling to New York for the UN General Assembly, said the government was right not to bail out the company, arguing that bailing out Thomas Cook could have led other firms to expect the same treatment.
“We need to look at ways in which tour operators one way or another can protect themselves from such bankruptcies in future,” Johnson said.
— S5ASH (@ActualMrs5ash) September 23, 2019