One of the biggest names in the travel industry has finally succumbed to the pressures of insurmountable debts. The 178-year-old British travel company Thomas Cook declared bankruptcy after failing to seek $250 million from private investors. This sudden collapse has left thousands of Thomas Cook passengers stranded around the globe.
[Indian travellers, breathe a sigh of relief. Thomas Cook (India) is not affected. The Thomas Cook India group is an entirely different entity since August 2012 when it was acquired by Fairfax Financial Holdings (Fairfax), a Canada based multinational investment company.]
After several rounds of talks with its investors led by the largest shareholder, China&rsquos Fosun Travel Group, failed to produce results, the travel giant had no other option but to declare its collapse. Reports have called this &ldquothe largest peacetime repatriation effort&rdquo in British history. Consequently, the UK government has hired charted planes, to bring 150,000 stranded passengers back home.
In addition to owning its own fleet of aircrafts, Thomas Cook also owns the German airline Condor. As per reports, Condor will continue its operations and has applied for a bridge loan from the German government.
Reports claim that with increasing number of low &ndash fare airlines and online booking portals, travellers are arranging their own trips which has adversely hit the industry. Though a government bailout worth £ 150 million was requested earlier, the Boris Johnson led government refused any such aid.
The demise of UK&rsquos biggest travel company has put the jobs of around 21,000 employers at stake. Chinese shareholder Fosun had also proposed a 1.1 billion dollar bail out in exchange for control over tour operations and a minority stake in the company.
This bankruptcy follows the collapsed deals of Wow Air, an Icelandic airline and Monarch airlines, a UK based carrier. According to reports, as of March 31, 2019, the company had a debt of £2 billion.