Thomas Cook Collapses, up to 600,000 Travelers Stranded in Hotel & Airline Chaos, Triggers “Biggest Peacetime Repatriation in UK History”

Rescue deal fell through at the last moment. China’s Fosun and other shareholders are toast. Creditors get to fight over the debris.

Thomas Cook, the global travel & vacation-giant with its own airline and hotels, with 21,000 employees globally — 9,000 of them in the UK — and a 178-year history, ceased operations with immediate effect early Monday morning after failing to raise the £200 million of additional funds being requested by its main creditors to complete its rescue. The British government also refused to step in at the last minute to bail out the company.

The travel group has been placed into compulsory liquidation, as opposed to administration, meaning the business will be wound down. The immediate result has been chaos in holiday destinations across Europe, North Africa and North America. As many as 600,000 holidaymakers — 150,000 of them Brits — were left stranded abroad, many of them not knowing how they’re going to get home or whether they have a hotel room left to stay in.

Hotel groups are normally paid by tour operators two to three months after the travelers have already taken their holidays. Now that Thomas Cook is no longer a going concern, some hotels may ask holidaymakers either to leave, or cough up extra to remain in the hotel. In Tunisia, holidaymakers at one resort said they were barred from leaving unless they paid a £1,680 fee to cover the costs of their trip.

Thomas Cook package holiday customers are covered by Atol – Air Travel Organiser’s Licence – which protects accommodation and return flights, but payment can take some time to materialize. The UK Civil Aviation Authority said it is contacting hoteliers and other companies likely to be hit by the Thomas Cook collapse to assure them they will get reimbursed.

The government is also mobilizing its largest ever peacetime repatriation plan, code-named Operation Matterhorn, which will involve planes chartered from other airlines including British Airways and easyJet and is expected to set taxpayers back at least £600 million.

Continue reading the article on Wolf Street

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