United Kingdom-based travel company Thomas Cook collapsed on Monday after 178 years of operations as desperate discussions with investors to help rescue it from high debts failed, AFP reported. The bankruptcy has now led to the biggest effort by the country’s government since the World War II to repatriate tourists stranded across the world.
The British government’s effort to bring back an estimated 150,000 tourists back will begin on Monday and is likely to end by October 6.
The developments will not affect customers of Thomas Cook (India) Limited, which said on Saturday it was not related with the UK-based Thomas Cook Plc. Thomas Cook India is owned by Canada-based Fairfax Financial Holdings, which bought the entire stake from the UK’s Thomas Cook in 2012.
In August, Chinese firm Fosun, which was already the biggest shareholder in Thomas Cook, had agreed to invest 450 million pounds as part of a 900-million-pound rescue package in return for more stake. However, the company needed 200 million pounds more to sustain it in the winter months, when it earns less, Reuters reported. The company has been struggling with high debts, online rivals and geopolitical uncertainty. On Sunday, top executives met prospective lenders in London to seek help in bailing out the company, but the effort failed.
Thomas Cook said in a statement, “Despite considerable efforts, those discussions have not resulted in agreement between the company’s stakeholders and proposed new money providers. The company’s board has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect.”
Chief Executive Officer Peter Fankhauser called it a “deeply sad day”. “It is a matter of profound regret to me and the rest of the board that we were not successful,” he said.
The government asked the UK Civil Aviation Authority to launch a repatriation program to bring customers back. “Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavor to get people home as close as possible to their planned dates,” it said in a statement.
Dozens of charter planes have been hired to get customers back free of charge. “All customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home as close as possible to their booked return date,” the statement said.
Thomas Cook operated hotels, resorts and airlines for 19 million travellers a year in 16 countries, and employed 21,000 people. It was founded by Thomas Cook, a businessman, in 1841.