Too big to fail? No such thing as Thomas Cook made headlines in 2019

One of the best-known names in travel is no more as Thomas Cook collapses

TORONTO — As a retailer and a tour operator it’s been out of the Canadian market for years but the Thomas Cook name still resonates, and the travel industry here is now watching as the oldest brand in the travel business calls it quits despite last-ditch efforts to save it. There’s also potential impact for Transat and its partnership with the company.

Upwards of 600,000 travellers, including 150,000 from the UK, are stranded in vacation destinations around the world after Thomas Cook filed for bankruptcy over the weekend.

The beleaguered company’s fate had been in the balance for months and it needed an extra 200 million pounds, on top of a 900 million pound rescue package already received, to get it through.

Competition from OTAs as well as uncertainty surrounding Brexit, terrorist attacks in UK favourites like Egypt and Tunisia, plus a few hot summers that saw UK travellers staying home instead of travelling abroad to more UK favourites including Greece, Spain and Portugal, created a perfect storm for the 178-year old company.

Agents in the UK and around the world continued to book the company, and there was a sense that it was too big to fail.

Some 600,000 people were travelling with the company as of Sunday, though it was unclear how many of them would be left stranded, as some travel subsidiaries were in talks with local authorities to continue operating. Thomas Cook said it served 22 million customers a year.

The British government was taking charge of getting the firm’s 150,000 U.K.-based customers back home from vacation spots across the globe. The process began Monday but officials asked for patience and warned of delays.

According to reports, some 50,000 Thomas Cook travellers are stranded in Greece; up to 30,000 are stuck in Spain’s Canary Islands; 21,000 are in Turkey and 15,000 are in Cyprus. Airports saw crowds of Thomas Cook travellers lining up for other ways to get home.

Thomas Cook operated a fleet of 105 airline jets and had about 550 travel agencies on major streets across Britain, and 200 hotels.

TICO has issued a closure notice for the company.

“Thomas Cook didn’t have any flights to/from Toronto (or Ottawa), so there don’t appear to be any direct flights that are impacted. It’s still very early in the process, but TICO is ready to assist consumers and answer any questions they might have. At this time, we haven’t received any calls from consumers who had purchased services from Thomas Cook. We’ll be keeping a close eye on the situation,” said Richard Smart, TICO’s President and CEO.

Meanwhile Transat says it could face fallout from Thomas Cook’s collapse.

Transat was in the second year of a seven-year deal to exchange aircraft with the British airline on a seasonal basis. Transat announced the agreement in October 2017.

Transat was slated to receive at least seven jetliners from Thomas Cook this fall, but now the partnership is dead with Thomas Cook’s declaration of bankruptcy.

However Transat says it is still “confident” it will receive the Airbus A321 planes. Transat is working to complete its takeover by Air Canada next year.

Back in 2007, MyTravel merged with Thomas Cook. Airtours had acquired Sunquest in 1994 and rebranded as MyTravel in 2002. Thomas Cook Canada was one of the biggest players in the Canadian tour operator industry for years.

In 2013 Frank, Enzo and Joe DeMarinis announced that the company they acquired from Thomas Cook Group would be known as TravelBrands Inc.

Thomas Cook’s retail presence in Canada was also dominant. In 2006 Transat had its eye on 430 retail outlets by buying Thomas Cook Travel for $7.4 million.

The airline Condor, which is owned by Thomas Cook and which serves the Canadian market, could be bailed out by the German government with a bridging loan.

Condor is still flying, despite the Thomas Cook bankruptcy, according to a statement from the airline.

“Condor flights will continue its flight operations despite the fact that its parent company Thomas Cook Group plc has filed for insolvency.

“Thomas Cook Group plc, the previous parent company, had to file for insolvency on 23 September 2019. Despite intensive efforts, the Group was unable to obtain refinancing from Fosun, banks and creditors. Condor continues to operate as a German company. In order to prevent liquidity constraints Condor has applied for a state-guaranteed bridging loan, which is currently under review by the Federal Government.”


With files from The Canadian Press & The Associated Press

Travel Week Logo

Get travel news right to your inbox!