Thomas Cook collapses; thousands of jobs at risk

The British airline and tour operator, Thomas Cook, has collapsed last Sunday. This has left thousands of passengers stranded around the globe.

In a tweet, the U.K. Civil Aviation Authority said: “Thomas Cook Group, including the UK tour operator and airline, has ceased trading with immediate effect. Thomas Cook bookings, including flights and holidays, have now been canceled.”

In a statement, the company said its board “concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect” after a financial rescue has failed.

“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world,” said chief executive of Thomas Cook, Peter Fankhauser.

“Despite huge efforts over a number of months, and further intense negotiations in recent days, we have not been able to secure a deal to save our business. I know that this outcome will be devastating to many people and cause a lot of anxiety stress and disruption,” he adds.

Over the past couple of years, Thomas Cook and its businesses, which includes its airlines and hotel rooms, have been struggling to compete with low-cost carriers and rivals. It’s own airline and

The Brexit issue has also made it harder for Thomas Cook as it has pushed the pound to decrease, affecting and discouraging travelers.

In May, the company reported that it has lost around $1.8 billion in a six month period that ended on March 31. During the same period in 2017 to 2018, Thomas Cook only reported a loss of around $376 million.

The fall of the UK-based company has affected the shares of China’s Fosun Tourism. It dropped to nearly 5% in Hong Kong. The parent company of Fosun Tourism, Fosun International, owns Club Med. The all-inclusive holiday firm is the largest shareholder of Thomas Cook.

“Fosun is disappointed that Thomas Cook Group has not been able to find a viable solution. We extend our deepest sympathy to all those affected by this outcome,” said the company.

Thomas Cook India, which is owned by Canadian company Fairfax, said its business is not affected by the collapse of the British company.

With the announcement of Thomas Cook’s demise, the shares of its rival travel groups in Europe saw an increase. The shares of the low-cost airline, Easyjet, were up to about 4%. The Germany-based TUI also saw an increase in its share by more than 6%.

With the collapse of Thomas Cook, more than 150,000 UK outbound customers abroad are expected to be repatriated. The number of people who are going to be brought back to the UK is almost double the number of passengers who were repatriated in 2017 when Monarch Airlines collapsed.

The repatriation flights are exclusive to passengers whose journey originated from the United Kingdom. Customers can check out the website that was launched by the aviation authority for more information including flight details.

“Customers currently overseas should not travel to the airport until their flight back to the UK has been confirmed on the dedicated website,” said the aviation authority in a statement.

For Thomas Cook customers who are abroad through holiday packages, they are protected by the Air Travel Organizer’s License (ATOL) and this will help address the hotel billing issue. The Air Travel Organizer’s License (ATOL) is a financial program that offers protection to air package holidays sold by travel businesses based in the United Kingdom.

“While arrangements are being made, please do not make a payment to your hotel unless instructed otherwise by the CAA team. If our guarantee is not accepted by the accommodation provider, we may need to relocate you to another hotel for the duration of your stay,” adds the aviation authority.

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