British Airline company, Thomas Cook entered insolvency as reported on Monday as it couldn’t able to secure the required funding to survive in the market. The adverse effect is, 600,000 vacations were canceled globally due to this setback.
According to the British government, this would be the largest repatriation during harmony as 150,000 British customers will be soon returned home due to abrupt cancellation in their holidays.
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How Did This Happen?
The company was seeking 200 million pounds to prevent this situation on Friday. They were engaged in talks with their shareholders and creditors to save the company from collapse. The 178-year old company also ran 600 UK travel stores in addition with well know airlines in many parts of the world.
The company claims a slow down in bookings due to Brexit uncertainty to contribute to its squeezed debt crisis.
The company has reported a debt of 1.25 billion pounds in May and claimed that uncertainty related to Britain’s scheduled departure from the European Union at the end of October had negatively affected demands for summer holidays.
The other reason informed would be the heat waves over the past couple of summers in Europe have caused many people to stay at home while higher fuel and hotel costs burdened the travel business.
Who Got Affected The Most?
The Thomas Cook airline has stopped trading and its employees will face the heat. According to The Civil Aviation Authority(CAA), its 21,000 employees in 16 countries will lose their jobs, including 9,000 employees in the UK.
The Union representing Thomas Cook staff had approached the British government to intervene to speed up the process.
Around 1.5 lac customers had to cancel their holidays and return to their home base as per reports.
How Are They Coping With The Situation?
British CAA has fixed an aircraft fleet for the repatriation process which is expected to complete in two weeks.
They said, “Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavor to get people home as close as possible to their planned dates,”.
While talking about the repatriation plan, the British Transport Secretary, Grant Shapps said that as fas as Malaysia is concerned, dozens of charter planes have been hired to fly travelers back to home, free of any charges. He also added that hundreds of people were staffing call centers and airport operations centers.
He said that the task is enormous, the biggest peacetime repatriation in UK history. So there are bound to be problems and delays.
What Company Has To Say About The Situation?
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.” said, the chief executive Thomas Cook, Peter Fankhauser.
He added, “I would like to apologize to our millions of customers, and thousands of employees,”.
The company website crashed shortly after the company collapse was announced.
According to reports, most of the company customers are protected by the government-run travel insurance program. This assures that the travelers will get home if the British based tour operator fails to provide the services.
The Glorious Past Of The Company
The company was first introduced in 1841, with a one-day train excursion in England. Now it operates in 16 countries staffing 21,000 employees around the world.
It had been struggling over the past few years. Recently it had raised around $1.12 billion(900 million pounds) including money raised from the leading Chinese shareholder Fosun.
Due to this mishap, around 1 million future vacations for upcoming holydays are canceled. They are supposed to get refunds under the terms of the government’s travel insurance plan.
People Facing Troubles
The companies situation is affecting the vacationers who are set on their excursions already.
According to BBC radio, A British vacationer said that the Les Orangers beach resort in the Tunisian town of Hammamet, near Tunis, asked the guest, which were supposed to leave, to pay extra money for fear it wouldn’t be paid what it is owed by Thomas Cook. (reference Indiatoday)
many tourists refused the demand, since they had already paid Thomas Cook, so security guards shut the hotel’s gates and “were not allowing anyone to leave.” said Ryan Farmer, of Leicestershire.
Farmer added that It was like “being held hostage, who is due to leave Tuesday. He informed that he would also refuse to pay if the hotel asked him.
The hotel and the British Embassy in Tunis officials or managers kept quite on the subject and remained unavailable.
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