Thomas Cook files for US bankruptcy protection

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This topic contains 83 replies, has 18 voices, and was last updated by  transtraxman 31 Oct 2019
at 10:21
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Viewing 15 posts - 31 through 45 (of 86 total)

  • SimonS1
    Participant

    On the other hand it appears some hotels have not been paid a € this year yet and are owed huge sums.

    They negotiated with the operators and if they negotiated badly or did not enforce terms they cannot expect customers who paid in full for their holidays in advance to ‘cough up’ a second time.
    I can understand their actions, but it is morally and (probably) legally wrong.

    How would you “enforce terms”?


    mkcol74
    Participant

    This article makes some valid theoretical points, although the author appears to lack knowledge of how things work in real life.

    https://www.telegraph.co.uk/travel/comment/uk-airline-insolvency-review/?li_source=LI&li_medium=li-recommendation-widget

    Thankfully the paywall prevented me from reading too much as I was already getting annoyed by the middle of the 2nd para, after a rather stupid statement in the first viz “inevitable once the company moved its efforts into the highly volatile mass market package holiday market” – what on earth does the author think they’d been doing for the last few decades?

    1 user thanked author for this post.

    capetonianm
    Participant

    How would you “enforce terms”?

    Just as an example, the contract should state :

    ‘payment ‘x’ days before arrival of pax failing which bookings will be cancelled.’


    cwoodward
    Participant

    Thomas Cook has been living on borrowed time for the past eight or so years and in that time has never made a profit and lost 1.8 billion pounds.
    The basic problem was that its business model was long outdated and as one informed commentator mentioned ‘ still a brochure business when the industry has moved on to a barcode one.
    Margins in the package holiday business have always been slim and with the advent of low cost carriers and a growing desire for independent travel the business laterly became a black hole and however much the shareholders pumped in more was needed because the business model had not moved with the times and was fundamentally broken and unsustainable.
    In early July shareholders and creditors agreed to pump in a further 750 million pounds to avoid collapse but by August the amount needed had increased to 900 million pounds which was a step too far for all concerned.
    The group has some interesting major shareholders of which China’s Fosun Tourism Group with 18% is I suspect the most interesting and is perhaps playing a long game to acquire all of the firms assets.
    The group already own France’s Club Med, Canada’s Cirque du Soleil, and Greek jeweler Folli Follie as well as premiership club Wolverhampton Wanderers and has substantial investments in mining and pharmaceuticals.
    They have a stated aim of developing there tourism and airline assets probably via their Hong Kong’s Fosun Tourism arm.
    Perhaps the Thomas Cook brand is not dead!

    1 user thanked author for this post.

    Swissdiver
    Participant

    Thomas Cook has been living on borrowed time for the past eight or so years and in that time has never made a profit and lost 1.8 billion pounds.
    The basic problem was that its business model was long outdated and as one informed commentator mentioned ‘ still a brochure business when the industry has moved on to a barcode one.
    Margins in the package holiday business have always been slim and with the advent of low cost carriers and a growing desire for independent travel the business laterly became a black hole and however much the shareholders pumped in more was needed because the business model had not moved with the times and was fundamentally broken and unsustainable.
    In early July shareholders and creditors agreed to pump in a further 750 million pounds to avoid collapse but by August the amount needed had increased to 900 million pounds which was a step too far for all concerned.
    The group has some interesting major shareholders of which China’s Fosun Tourism Group with 18% is I suspect the most interesting and is perhaps playing a long game to acquire all of the firms assets.
    The group already own France’s Club Med, Canada’s Cirque du Soleil, and Greek jeweler Folli Follie as well as premiership club Wolverhampton Wanderers and has substantial investments in mining and pharmaceuticals.
    They have a stated aim of developing there tourism and airline assets probably via their Hong Kong’s Fosun Tourism arm.
    Perhaps the Thomas Cook brand is not dead!

    Fosun is also a major shareholder (somewhere between 25 and 30%) of Millennium BCP, the largest Portugal privately own bank.


    SimonS1
    Participant

    How would you “enforce terms”?

    Just as an example, the contract should state :

    ‘payment ‘x’ days before arrival of pax failing which bookings will be cancelled.’

    Yes I understand that, however if rooms were cancelled wouldn’t customers who paid in full for their holidays in advance end up having to‘cough up’ a second time. Or lose their money?


    rferguson
    Participant

    CWOODWARD I completely agree. Personally, I don’t know anyone that goes into a high street travel agent and books a package holiday anymore. Not even my parents. I think airines are also filling in the void by offering quasi-package holidays. You go onto virginatlantic.com or lufthansa.com and enter dates to check on a fare and it also brings up options and prices for hotels, car hire, transfers, attractions.

    Hotels also became less keen to do the deals of yesteryear for the holiday companies as with more people travelling independently and using hotel booking sites the hotels are able to fill the rooms at a better rate lessening the margins for the holiday companies.

    To be honest I know very little about Thomas Cook. But from what I read, although the company was in dire straits as a whole the UK airline division Thomas Cook Airways UK was profitable (in 2018 operating profits of £129m while the larger company overall made an operating loss of £60m in the first quarter).


    SimonS1
    Participant

    Good to see Virgin showing some heart in repatriating stranded crew in Upper Class.

    Whilst according to the Independent, BA asked crew stranded in LAS for £10,000 each for three empty business class seats…..

    https://www.independent.co.uk/travel/news-and-advice/thomas-cook-collapse-cabin-crew-stranded-las-vegas-a9118086.html

    Another great PR own goal for Alex’s boys.


    rferguson
    Participant

    BA has stated internally that they have a process in place to repatriate any TCX passengers, crew and other staff back to the UK for free.

    I have seen the news reports and social media posts to the contrary though.

    The main story I saw was that four TCX staff were offered the last four seats ex LAS at $10k a pop. BA denies this. Though a number of factors need to be considered.

    There was a process for TCX staff to follow that they may not have been aware of. Of course these days there are no actual BA staff at most US ports, it’s all third party contractors. Thomas Cook as a brand and its collapse was probably not even a blip in the US media and I can see a situation where TCX staff rocking up at a US airport going to the check in counter and saying ‘we are thomas cook staff and we need to get home’ could be met with some typing on a keyboard and a fare quote.

    I’m totally guessing here, I don’t know the details. But BA insists its policy is to repatriate all TCX customers, crew and staff for free back to the UK.

    1 user thanked author for this post.

    SimonS1
    Participant

    But the bottom line is Virgin managed to help and BA didn’t.

    Let’s be honest, where mo ey is involved most people on this forum would have bet on that outcome.

    So the TC people didn’t know in the stress of the moment that there was “a process”. Did BA management reach out to help?

    Regardless, once again it’s good PR for Virgin whilst BA look mean and penny pinching.

    1 user thanked author for this post.

    rferguson
    Participant

    SimonS1

    Absolutely. A lot of BA staff have vented exactly what you have just posted on an internal forum.

    But let’s face it…PR wins are hardly BA’s forte!

    3 users thanked author for this post.

    IanFromHKG
    Participant

    I remember many years ago when another airline-cum-travel-company collapsed. I was working in the London office of what was then the world’s largest law firm and we had staff (not me!) in cars waiting airside at Heathrow for ‘planes to land so that the moment they came to a stop my colleagues would attempt to “arrest” the aircraft on behalf of our particular creditor clients before anyone else did. Although this might sound odd, aircraft are treated in the same way as ships, and legal action can be taken “in rem” (against the property) rather than, as is more usual, “in personam” (against a person); which means that aircraft can be “arrested” (taken into custody, if you like). Traditionally ships were arrested by nailing a notice to the mast (first person to do so “wins” that stage of the legal process). That obviously doesn’t work too well with aircraft, so apparently the modern technique is to use sticky tape!

    I wonder if the same happened with Thomas Cook…?

    I gather that only a minority of stranded pax were ATOL-protected, which I suppose just goes to show the advantage of bolting on to any UK flight purchase (where the operator is an ATOL member) some sort of add-on turning it into a “package”. Insurance is probably the cheapest add-on. So you can buy insurance to protect you against being stranded, which won’t be necessary since by buying it you get ATOL protection which will actually get you home rather than just refund your money, meaning you didn’t need the insurance, except that you did in order to get the ATOL protection (and so on round and round in circles…)…


    cwoodward
    Participant

    Nice story about’arresting’ aircraft Ian.
    Actually there are not a lot of aircraft to be arrested as the TC group only own 11 aircraft the other 100 or so are leased from around 25 aircraft leasing companies (that must just about every aircraft leasing company in existence) They are old also with an average age of twenty years.

    Interesting Cathay Pacific has been fast off of the mark and is looking to pick up some of the Thomas Cook groups now unemployed pilots launching a recruiting roadshow in both London and Manchester.


    MartynSinclair
    Participant

    I realise the firm is no longer – but can someone explain about the repatriation of crew and passengers.

    My understanding is the Government (or some entity) is chartering aircraft and crew to undertake what is being described as the biggest repatriation since world war 2. Why aren’t the TC aircraft and crew being used. Surely, liquidators / trustees could negotiate an extension for crew licenses / insurance / maintenance etc – if someone is paying for Charters, why not use the resource already in place?

    As for BA and trying to charge £10,000 to stranded aircrew….


    cwoodward
    Participant

    Martyn
    Not being in the UK I cant offer much insight into the repatriation exercise that is basically being undertaken by and paid for (at least initially) by British government agencies but I can offer an explanation re the use of TC leased aircraft.
    The TC aircraft can’t be used because the leasing companies have basically reposesed them. It is likely that they are owed lease payments by TC and in any case there is no one now TC is in liquidation to continue to make the lease payments. Lack of any insurance cover would also I believe be an issue and there would be other fundamental reasons why the TC aircraft can’t be used.
    The BA story may be something of a beat-up I suspect.

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