(Adds details)
By Kate Holton and Guy Faulconbridge
LONDON, Sept 23 (Reuters) - Thomas Cook, the world's
oldest travel firm, collapsed on Monday, stranding hundreds of
thousands of holidaymakers around the globe and sparking the
largest peacetime repatriation effort in British history.
What happens now and why did it collapse?
WHO IS AFFECTED?
The firm ran hotels, resorts and airlines for 19 million
travellers a year in 16 countries, generating revenue in 2018 of
9.6 billion pounds ($12 billion). It currently has 600,000
people abroad, including more than 150,000 British citizens.
Thomas Cook employs 21,000 people and is the world's oldest
travel company, founded in 1841. The company has 1.7 billion
pounds ($2.1 billion) of debt.
WHAT HAPPENS TO TOURISTS?
The British government has asked the UK Civil Aviation
Authority (CAA) to launch a repatriation programme over the next
two weeks, from Monday to Oct. 6, to bring Thomas Cook customers
back to the UK.
"Due to the significant scale of the situation, some
disruption is inevitable, but the Civil Aviation Authority will
endeavour to get people home as close as possible to their
planned dates," it said.
A fleet of aircraft will be used to repatriate British
citizens. In a small number of destinations, alternative
commercial flights will be used.
About 50,000 tourists are stranded in Greece, mainly on
islands, a Greek tourism ministry official told Reuters on
Monday.
The CAA has launched a special website,
thomascook.caa.co.uk, where affected customers can find details
and information on repatriation flights.
For those customers not flying from Britain, alternative
arrangements will have to be found. In Germany, a popular
customer market for Thomas Cook, insurance companies will
coordinate the response.
WHAT IS THE ADVICE TO PASSENGERS?
"Customers currently overseas should not travel to the
airport until their flight back to the UK has been confirmed on
the dedicated website," the CAA said.
"Thomas Cook customers in the UK yet to travel should not go
to the airport as all flights leaving the UK have been
cancelled."
WHO WILL PAY FOR THE COST OF HOTELS?
The CAA said it was contacting hotels and other companies
likely to be impacted by Thomas Cook's collapse to reassure them
they will be paid.
The regulator said that if holidaymakers are being asked to
settle bills they should contact the CAA.
Thomas Cook package holiday customers are covered by ATOL –
Air Travel Organiser’s Licence – which protects accommodation
and return flights. However, the CAA said some customers may be
asked to relocate to other accommodation.
WHAT HAPPENS IF A HOLIDAY IS BOOKED FOR THE FUTURE?
The CAA says that if customers have not yet started their
trips most holidays and flights booked with Thomas Cook are now
cancelled and customers should not go to the airport.
THE LIQUIDATION
Thomas Cook said it had entered compulsory liquidation and
an order had been granted to appoint an official receiver to
liquidate the company.
AlixPartners UK LLP or KPMG will be appointed as special
manager for the different parts of the business.
THE INDUSTRY
The impact is already being felt further afield, with
Australian travel group Webjet Ltd saying it was 27
million euros ($30 million) out of pocket and British online
travel group On The Beach saying it would suffer from
helping its customers in resorts who had flown with Thomas Cook.
The collapse could provide a boost, however, to major rival
TUI, whose shares surged more than 10% in early
Monday trading, and to Europe's overcrowded airline sector,
which could benefit from the closure of Thomas Cook's airline.
WHY DID IT COLLAPSE?
Thomas Cook was brought low by a $2.1 billion debt pile that
prevented it from responding to more nimble online competition.
With debts built up around 10 years ago due to several ill-timed
deals, it had to sell three million holidays a year just to
cover its interest payments.
As it struggled to pitch itself to a new generation of
tourists, the company was hit by the 2016 coup attempt in
Turkey, one of its top destinations, and the 2018 Europe-wide
heatwave which deterred customers from going abroad.
Thomas Cook needed another 200 million pounds on top of a
900 million pound package it had already agreed, to see it
through the winter months when it receives less cash and must
pay hotels for summer services.
The request for an additional 200 million pounds torpedoed
the rescue deal that had been months in the making.
Thomas Cook bosses met lenders and creditors in London on
Sunday to try to thrash out a last-ditch deal to keep the
company afloat. They failed.
Under the original terms of the plan, top shareholder Fosun
- whose Chinese parent owns all-inclusive holiday firm Club Med
- would have given 450 million pounds ($552 million) of money in
return for at least 75% of the tour operator business and 25% of
its airline.
Thomas Cook's lending banks and bondholders were to stump up
a further 450 million pounds and convert their existing debt to
equity, giving them in total about 75% of the airline and up to
25% of the tour operator business.
($1 = 0.8015 pounds)
($1 = 0.9111 euros)
(Additional reporting by Alistair Smout; Writing by Guy
Faulconbridge and Andrew MacAskill; Editing by Darren Schuettler
and Mark Potter)
