Thomas Cook Airline on Monday 23rd September 2019 announced that they have ceased operations, after failing to secure another £200million it needed to keep the business afloat, leaving over 600,000-holiday seekers stranded worldwide.
Thomas Cook Airline only a few days ago was seeking for a balance of £200million bailout from the UK Government to remain afloat, after Chinese conglomerate, Fosun, and banks agreed to stump up £750 million to save the debt-laden firm from bankruptcy. This was topped up by £150 million from other key backers to see it through the winter. The banks, led by RBS and Lloyds, had insisted that the firm finds another £200 million to see it through the low season or they will pull the plug on the rescue deal, which they have clearly failed to do, and the airline is gone!
The collapse was confirmed this morning by the UK Civil Aviation Authority (CAA) which said it had been asked to help bring people home. Dozens of charter planes have been brought in from as far afield as Malaysia to assist with the mass airlift. Only holidaymakers with return flights booked within the next two weeks, between Monday and Sunday, October 6, will qualify for a free flight home, as close as possible to their original return date.
In a statement, the syndicate of Thomas Cook’s lenders said this morning: ‘Unfortunately, and notwithstanding the efforts of all stakeholders, the £1.1 billion funding requirement to adequately recapitalise Thomas Cook airline has ultimately proved too significant.
‘The Lenders providing finance facilities to the Group have been extremely supportive stakeholders, including through two periods of financial distress and have stood behind Thomas Cook airline over the past twelve months, a period where the Group saw cash outflows of about £1 billion, maintaining that position over the crucial and busy summer holiday period.’
‘Obviously, the Lenders are deeply disappointed that it has not proved possible to rescue Thomas Cook. In partnership with other stakeholders, the Lenders worked tirelessly to examine all options within the timeframe required.’
The CAA said in its statement: ‘Thomas Cook Group, including the UK tour operator and airline, has ceased trading with immediate effect. ‘All Thomas Cook bookings, including flights and holidays, have now been cancelled.’
Next Monday, September 30, one week into the repatriation process, the CAA will launch a service which will seek to process all refunds within 60 days of full information being received. Thomas Cook’s chief executive Peter Fankhauser said his company had ‘worked exhaustively’ to salvage a rescue package.
He said: ‘Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable. ‘It is a matter of profound regret to me and the rest of the board that we were not successful. ‘I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years.
‘This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.’ Transport Secretary Grant Shapps said dozens of charter planes, from as far afield as Malaysia, had been hired to fly customers home free of charge and hundreds of people were working in call centres and at airports.
Mr Shapps said: ‘Thomas Cook’s collapse is very sad news for staff and holidaymakers. ‘The Government and UK CAA is working round the clock to help people. ‘But the task is enormous, the biggest peacetime repatriation in UK history. So there are bound to be problems and delays. ‘Please try to be understanding with the staff who are trying to assist in what is likely to be a very difficult time for them as well.’