Bye Bye Thomas Cook - An End to the Joyous Rides
Another legend collapsed. A 178-year old story died a dreadful death. At the eleventh hour, the fund-raising talks with the investors led by China’s Fosun Tourism Group failed to reach a rescue deal, which resulted in the cancellation of all the bookings, flights and package tours of Thomas Cook. The major disaster resulted in the ‘largest repatriation in peacetime history’ and more than one lakh tourists across the world were stranded at the respective airports. Adding more to the misery, the bankrupt Thomas Cook left more than 22,000 employees out of job as well.
What Led to the Collapse?
Thomas Cook was struggling for the last few years with poor mergers, skyrocketing debts and the failure to follow the technological trends & reinvention in their services everyday to stay alive. The merger with MyTravel in 2007 was the beginning as Thomas Cook was merging with a company which did not have profits for the previous six years. The collapse can never be blamed on the Britons as there is three percent rise in population who took holiday in 2018 compared to the year before. Well, some blames it on the Brexit as it was an organization that existed for more than 178 years, which went through both the World Wars.
Investors Fosun Tourism Group’s recent statement says that, “Fosun confirms that its position remained unchanged throughout the process, but unfortunately other factors have changed. We extend our deepest empathy to all those affected.” Fosun also stated its disappointment when Thomas Cook failed to find a solution with their shares dropping as much as 5.5 percent in Hong Kong.
British Government to the Rescue
However, British government has chartered planes to bring home the stranded customers for the next two weeks free of cost. The government officials also advised the travelers on Thomas Cook not to cut short their trips with the aid of civil aviation regulator planning to send home the customers as close as possible to their return date. Along with the travel, the accommodation charges will also be covered by the government. But, there are cases of passengers complaining about the mounting rise in other airlines price, who is making the most of the situation.
Sad Tales of the Customers
Being stuck at the airport with nowhere to go apart from wandering in the airport is terrible, unfortunately, most of the passengers scheduled to fly out had been aware of the company’s collapse until they were on their way or upon arrival at the airport. Out of all the bitter blows, there are instances of people missing out the wedding and more. Ministries of various countries have issued a warning to hotels in the country to not abandon the Thomas Cook customers or demand money from them. Several ministries offer a financial help to hotels with a ‘credit loan package’.
Jeopardy as over 21,000 People Lost their Jobs
A company that held such a powerful force in the tourism sector, Thomas Cook employed 9,000 people in the UK and another 12,000 from the other 16 countries. But the dreadful situation left these 21,000 employees jobless, with a fear of no pay check this month. Reacting to this disastrous news in the morning, the British Airline Pilots Association (BALPA) released a statement saying, “For pilots, BALPA will be supporting our members through the legal complexities of what Thomas Cook liquidation means for them and doing everything we can to help them find alternative jobs in other airlines”.
However, blaming the British government for allowing the holiday firm to collapse, Manuel Cortes, General Secretary, Transport Salaried Staffs Association, says, “Administration need not have happened – the Government had been given ample opportunity to step in and help Thomas Cook but has instead chosen ideological dogma over saving thousands of jobs”.
Not the First to Bankrupt in the European Tourism Sector
It’s not the first time the travel sector in Europe is facing such a collapse, with Icelandic budget airline, Wow Air faced similar bankruptcy issues in March 2019 leaving 2,700 fliers stranded. Likewise in 2017, UK carrier, Monarch Airlines collapsed when they tried to switch from charter to scheduled low-cost operations. Thomas Cook employees sensed the ending with lack of innovative mindset, catalogues everywhere, inefficient retail branches and analog processes still running. But nothing could be done to save them from such distress.
This well reputed company had a different start with the trains in the 1840s. Thomas Cook, a cabinet maker, carried temperance supporters by railway between Leicester, Nottingham, Derby and Birmingham. A decade later in 1851, Thomas Cook organized tours to Europe and to the US in 1860s. In 1948, the company was nationalized along with the railways and became a part of the British Transport Commission. 24 years later, it was de-nationalized and was acquired by Trust House Forte, Midland Bank and the Automobile Association. However in 1992, Thomas Cook was sold to the German bank Westdeutsche Landesbank and the charter airline LTU Group for £200 million. Finally in 2001, Thomas Cook was acquired by the German company C&N Touristic AG, and the name changed to Thomas Cook AG.
Thomas Cook India Not Affected
Thomas Cook India was acquired by Canadian Fairfax Finanical Holdings in August 2012 and is a completely different entity from the Thomas Cook Britain. Madhavan Menon, Chairman & MD, Thomas Cook (India) commented, “The last seven years have been fruitful, as we continue to grow and build our legacy as an independent entity after Fairfax Financial acquired a 77 percent stake”.