United Kingdom's travel giant Thomas Cook had filed bankruptcy on 23 September 2019. The issue came into limelight when the distressed British firm filed for Chapter 15 proceedings last week as it failed to raise rescue funds from its investors. The debacle of Thomas Cook came as a blow to the travel and hotel industry.
Peter Fankhauser, Chief Executive Officer of Thomas Cook Group, said – ''Despite huge efforts over a number of months and further intense negotiations in the recent days, we have not been able to secure a deal to save our business.''
The 178-year-old travel company earlier had discussions with China's Fosun Tourism Group for 1.1 million bailout. However, the discussions didn't turn fruitful. Initially, Fosun agreed on a recapitalisation deal worth 900 million pounds, however, Thomas Cook demanded another 200 million pounds. On the other side, Thomas Cook's plea for £150m bailout proposal forwarded to the British government too fell on deaf ears as the respective government rejected it.
The travel firm was started by Victoria-based businessmen Thomas Cook in 1940. The company began its journey by offering train tour packages. The key to the success of the company was the rise in the income levels of middle-class people in Britain during '70s and '80s that paved the way for the growth of the travel industry. Thomas Cook company worked with British Railways after World War II, which helped it to grow by leaps and bounds during the 1970s and '80s.
After that, the company came up with a slogan - Don't just book it. Thomas Cook it. The slogan managed to capture the public's attention and changed the fate of the company as it began to expand its services with that slogan. The company also started offering flight charter services, passenger flight services, holiday trip packages, hotels & resort services, cruise line services, etc.
Thomas Cook Group PLC is Europe's largest travel firm. And depsite being the market leader, the company failed because the tourism sector in Europe took a nosedive since almost a decade. Other travel stalwarts, including Germany's TUI AG, are also facing the same crisis despite companies offering huge discounts on packages.
Generally, European countries receive less sunshine during summers, and people prefer moving to warm places. However since few years, heat waves are prevailing across Europe; as a result, many are staying indoors and have cut down travelling. Apart from this, Brexit and terrorism also have shown a huge impact on the travel industry.
Thomas Cook has stopped its air services, bookings, and other services because of bankruptcy, and 21 thousand employees across 16 countries are on the verge of losing their jobs.
UK's largest peacetime repatriation effort
According to associated press statistics, 6,00,000 holidaymakers are stranded abroad, of which 1,50,000 holidaymakers are from the UK. Efforts to bring these British holidaymakers to home is said to be the largest peacetime repatriation effort ever made by the government.
No co-relation with Thomas Cook India
'Thomas Cook India' said that the 'Thomas Cook PLC' collapse has no impact on 'Thomas Cook India' as it was taken over by Fairfax (77 per cent stake) in 2012. Chairman and Managing Director – Thomas Cook (India) Ltd, Madhavan Menon said that the company in India is doing good and running profitably.
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