December 10, 2019

Thomas Cook customers to fly home after firm collapses

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From BBC

The first flights bringing Thomas Cook holidaymakers home to the have landed amid some reports of disruption.

The government has said it will run a “shadow airline” for two weeks to repatriate the 155,000 UK tourists affected by the firm’s collapse.

Transport secretary Grant Shapps said its response to the crisis was “on track so far” and “running smoothly”.

But some people have complained of long queues and disruption at airports, including one who waited nine hours.

Ricky Houston said his flight to Newcastle from Corfu was delayed by nine hours on Monday.

“I feel sorry for the reps because I don’t think they knew anything either. It was the hotel which kept us up to date,” he said.

Mr Shapps, who earlier attended an emergency Cobra government meeting on the government’s response, said: “People will experience delays, we’re not running the original airline, but we intend to get this done all in the next two weeks and then end this phase of the rescue.”

He also stressed people should not come home early from their holidays but should “carry on and leave on the date they were supposed to leave, having first checked the Thomas Cook website before leaving for the airport”.

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Thomas Cook, whose roots go back to 1841, went into liquidation after last-ditch talks to raise fresh funding failed. It has left 22,000 jobs at risk worldwide, 9,000 of them in the UK.

The Civil Aviation Authority (CAA) is coordinating the repatriation – which is the biggest in peacetime – in an undertaking called Operation Matterhorn. It has chartered 45 jets to bring customers home and will fly 64 routes on Monday, from locations including Central America and .

Some 16,000 holidaymakers were booked to come back on Monday, and authorities hope to get at least 14,000 of them back to the UK.

Operators including easyJet and Virgin have supplied some aircraft, with jets coming from as far afield as Malaysia.

All Thomas Cook holidays are now cancelled, but some customers complain they have not been given enough information.

All customers can seek compensation via the government’s Atol scheme, or from their credit card or insurance companies.

Customers seeking information can visit the CAA’s special Thomas Cook website. Those scheduled to return to the UK within the next 48 hours or who are having problems with their accommodation or need special assistance can ring 0300 303 2800 in the UK or +44 1753 330 330 from abroad.

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Leanne Jones and children

Disneyland dreams dashed

Leanne Jones, a of two small boys, has found out that the Thomas Cook vouchers she’s been given as presents by her family towards a holiday are worthless.

“I’m feeling rubbish. Every birthday and Christmas over the last two years I’ve been saving Thomas Cook vouchers to take my two young children on their first holiday abroad – Disneyland was the plan.

“I’ve got £800 worth and was planning to fly out next summer. I stand to lose all the money from the vouchers and my children will no longer get their holiday.”

Ms Jones, who lives in Milton Keynes, has been in contact with Atol, but says the vouchers are not covered by its protection scheme. “There is nothing anyone can do to help.

“That’s it, I’m going to have to start saving again. I have no other option. We’ll have to wait another two years for our next holiday.”

It was her dad’s idea that the family give holiday vouchers, and he’s now feeling a little guilty, she says. “It’s not his fault at all. It was a good idea at the time.”

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How will holidaymakers get home?

While an estimated 150,000 Britons are affected by Thomas Cook’s collapse, the company has up to a further 450,000 customers abroad, some of whom have been affected.

In Germany, one of Thomas Cook’s main markets, insurance companies will help organise the response to its collapse.

UK customers will be brought home “as close as possible” to their booked return date, the Department for Transport (DfT) has said.

Thomas Cook planes at Manchester Airport
Image captionThomas Cook planes have been impounded at Manchester Airport

Customers will be on special free flights or booked on to another scheduled airline at no extra cost, with details of each flight to be posted on a dedicated websiteas soon as they are available.

The DfT added that a “small number” of passengers might need to book their own flight home and reclaim the costs.

The CAA is also contacting hotels accommodating Thomas Cook customers, who have booked as part of a package, to tell them that the cost of their accommodation will be covered by the government’s Air Travel Trust Fund and Air Travel Organiser’s Licence scheme (Atol).

Tim Johnson, policy director of the CAA, told BBC News that customers whose future holidays had been cancelled would be informed of how they can claim a refund on the website.

Media captionTravel expert on the collapse of “the mightiest brand in travel”

Business Secretary Andrea Leadsom has said she will write to the Insolvency Service urging them to “fast-track” their investigation into the circumstances surrounding Thomas Cook’s going into liquidation.

The investigation will also consider the conduct of top directors, who have been paid a combined £20m in salaries and bonuses since 2014.

A Cabinet spokesman said: “People will rightly look at the size of bonuses to some of the directors and have serious concerns about that.

“There’s a broader issue at play about collapsing firms and director pay and we are looking that more broadly as a government.”

Thomas Cook airplane

GETTYThomas Cook in numbers

  • 22,000jobs at risk worldwide
  • 9,000jobs at risk in the UK
  • 150,000British holidaymakers to be repatriated
  • 450,000customers affected internationally
  • 34 planesowned (Airbus A321 and A330)

Source: Thomas Cook

What is the government doing?

Thomas Cook asked the government for a £250m bailout, the BBC understands, but this was denied. Mr Shapps defended the move on the BBC’s Today programme.

“I fear it would have kept them afloat for a very short period of time and then we would have been back in the position of needing to repatriate people in any case,” he said.

The company’s large debts and High Street-focused business made it a poor candidate for survival, he said.

Overall, Operation Matterhorn will cost the taxpayer around £100m, he added.

Shadow chancellor John McDonnell told the BBC the government should have bailed out Thomas Cook, “if only to stabilise the situation while a real plan for the future of the company could be addressed”.

Prime Minister Boris Johnson pledged to help stranded holidaymakers, but also questioned whether company directors were properly motivated to “sort such matters out”.

Passengers talk to Civil Aviation Authority employees at Mallorca Airport as an announcement is expected on the Thomas Cook's tour operator, in Palma, Majorca
Image captionPassengers are facing queues and disruption, from destinations such as Majorca

What happens to staff?

Schapps said a task force would be set up to help the 9,000 UK employees who stand to lose their jobs.

Workers at some Thomas Cook shops in Britain have already met with representatives of the firm’s administrators, who told them they would be made redundant.

Jobs at the tour operator’s airline and in its engineering division may also go.

Some workers are being kept on, however, but there is no definite number.

What about Thomas Cook’s international operations?

For now, Thomas Cook’s Indian, Chinese, German and Nordic subsidiaries will continue to trade as normal.

This is because, from a legal standpoint, they are considered separate to the UK parent company and are not under the jurisdiction of the UK’s Official Receiver.

They do, however, share services – such as aircraft and IT – with their parent company and will need to strike rescue deals in the coming weeks to keep trading.

What went wrong?

Thomas Cook had secured a £900m rescue deal led by its largest shareholder Chinese firm Fosun in August, but a recent demand from its banks to raise a further £200m in contingency funding had put the deal in doubt.

Fosun said in a statement: “We extend our deepest sympathy to all those affected by this outcome.”

The holiday company spent all of Sunday in talks with lenders trying to secure the additional funding and salvage the deal, but to no avail.

Thomas Cook has blamed a series of issues for its problems, including political unrest in holiday destinations such as Turkey, last summer’s prolonged heatwave and customers delaying booking holidays because of Brexit.

profit and loss

Speaking to BBC News from Manchester airport, travel expert Simon Calder said Thomas Cook “wasn’t ready for the 21st Century”.

“Now everybody can pretend they are a travel agent. They’ve got access to all the airline seats, hotel beds, car rentals in the world and they can put things together themselves.

Mr Calder, travel editor at The Independent, added that planes at the airport began to be impounded shortly after 00:00 BST.

While the company was closing shops to try and cut costs, closing 21 in March, it still had more than 500 outlets, bringing large costs compared to online competitors.

In another sign of its slow progress in mending its finances, it only stopped dividend payments to investors in November.

What are your rights?

Benidorm, Spain

If you are on a package holiday, you are covered by the Atol scheme.

The scheme will pay for your accommodation abroad, although you may have to move to a different hotel or apartment.

Atol will also pay to have you brought home if the airline is no longer operating.

If you have a holiday booked in the future, you will also be refunded by the scheme.

If you have booked a flight-only deal, you will need to apply to your travel insurance company or credit card and debit card provider to seek a refund.

When Monarch Airlines collapsed in 2017, the government organised to bring home all the stranded passengers, whether they were covered by Atol or not.

For more on this story go to: https://www.bbc.com/news/business-49796827

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