Thomas Cook collapse: everything you need to know

After 178 years of booking holidays, UK travel giant Thomas Cook has gone out of business

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One of the world's oldest travel agencies ceased operations with immediate effect on Monday, September 23. The Thomas Cook group, which has several divisions including a travel agency, own-brand hotels and a Thomas Cook airline, has gone into liquidation.

As a result, all Thomas Cook flights have been cancelled with immediate effect. This has left an estimated 150,000 UK passengers and more than 300,000 international holidaymakers stranded around the globe

How did this happen?

The Thomas Cook Group has been facing financial difficulties for some time. Despite a nearly 200 year-old history in booking travel, the company has been posting financial losses for the past few years.

On Sunday, Thomas Cook failed to secure the £2 million (Dh9.1m) it needed to meet its financial demands. The company immediately declared bankruptcy in what has been called, “A very, very sad day for the travel industry indeed,” according to Maggie Bootsman, general manager for the UAE division of The Travel Counsellors, an independent travel agency headquartered in Manchester, UK.

What’s the impact for travellers?

MANCHESTER, ENGLAND - SEPTEMBER 22: Passengers wait to go through to the Thomas Cook check-in desks at Manchester Airport on September 22, 2019 in Manchester, England.Thomas Cook is holding emergency talks with potential investors to try and secure around £200m to avert its collapse. If the company does go under, approximately 150,000 British holidaymakers could be stranded abroad with the potential loss of many thousands jobs in the UK. (Photo by Anthony Devlin/Getty Images)

All Thomas Cook flights have been cancelled with immediate affect and a dedicated site has been set up by the UK Civil Aviation Authority (CAA) to assist Thomas Cook customers.

The Civil Aviation Authority said the UK government has launched a repatriation plan to bring customers back to the UK. This will start today and run until Sunday, October 6.  It has been dubbed the largest ever-peacetime repatriation operation and will involve alternative flights being provided for those travellers currently overseas.

Passengers who have booked with Thomas Cook have been advised not to travel to airports. All Thomas Cook flights are cancelled and British airports are starting to tweet telling people who booked with the company to stay at home.

Business as usual for UAE customers

Thomas Cook bookings in the UAE remain unaffected by the closure of the British travel agency. Customers that booked travel via Thomas Cook and Al Rostamani Travels in the UAE have nothing to worry about as these bookings are handled via Thomas Cook India, a separate entity that remains unaffected.

While there is no official statement from Al Rostamani travel, a spokesperson told The National that bookings will not be impacted by the closure. "We are getting calls from our clients but we are telling them not to worry, they are not affected," said the spokesperson.

Thomas Cook India issued a public statement on Monday reiterating that it is not affected by the closure of the British tour company.

"With the recent developments relating to the iconic British travel Company, Thomas Cook PLC, being reported in the media, it is imperative to highlight that Thomas Cook India Group is a completely different entity," said Thomas Cook India in the statement.

Ras Al-Khaimah Hotel

A Thomas Cook own-brand hotel in Ras Al Khaimah which opened two years ago is associated with the British travel company.  The Thomas Cook Smartline Ras Al Khaimah Beach Resort has three swimming pools, 253 chalets and 700-metres of private coastline and is one of 22 Thomas Cook own-brand hotels around the world.

The hotel is owned in partnership with Bin Majid Hotels and Resorts, a hotel operator based in the UAE. There is currently no clear plan on what the future holds for Thomas Cook-own brand hotels however, travellers staying in the Ras Al Khaimah hotel have been assured that all current bookings will be honoured.

"Our first priority is guest satisfaction so, one way or another, we are going to accommodate all guests that are staying with us," a spokesperson from Bin Majid Hotel & Resorts told The National.

Stranded holidaymakers

Travellers staying at Les Orangers Beach in Tunis were reportedly asked to pay additional money to cover hotel costs amid Thomas Cook collapse. Courtesy Flickr

Travellers in other countries are not quite so lucky. Despite the support from the UK authorities, thousands of travellers have been stranded around the world.

The UK Civil Aviation Authority is putting plans in place to cover the cost of hotel accommodation for travellers around the world but several people have reported being asked to pay more from the hotels they are currently staying in.

This is likely because hotel groups are typically paid by tour companies after travellers have already stayed in a property. The collapse of Thomas Cook has left hotel owners uncertain over where the payment will come from however, the CAA has said it was contacting hotels to assure them that they would cover the costs.

Travellers currently holidaying on a Thomas Cook package who are asked to pay more are advised to contact the CAA call centre on +44 1753 330 330 for assistance.

In Cyprus, an estimated 15,000 holidaymakers have been left stranded on the island, according to Savvas Perdios, deputy minister of tourism. Turkey is also bracing for travel chaos as the country currently over 45,000 travellers in the country via Thomas Cook.

A British mother at Palma Airport in Mallorca, Spain that was trying to get back to Scotland told Reuters TV about the lack of information being given to travellers: "So no one has phoned us, no one has emailed us, we've had to find out just when we've arrived."

Expected delays

In New York's JFK airport, passengers were lining up to board a plane as news of the collapse broke. The Thomas Cook aircraft due to fly passengers home did not show but, after more than a four-hour delay, an alternative aircraft was sourced to bring passengers home. UK aviation authorities are using other airlines including Virgin Atlantic, British Airways and EasyJet to find alternative flights for customers.

In addition to delays at airports around the world, Thomas Cook customers should also be prepared to have to fly on alternative dates and possibly into different airports in the UK. Passengers flying into airports that they did not originally book travel to will be transported in buses to the original point of arrival.

Am I financially protected?

Travellers that paid for a package holiday with Thomas Cook can be reassured that they are protected by the Air Travel Organiser’s Licence scheme (ATOL), which means they are covered for any financial losses. Travellers will receive refunds through ATOL, but the process is likely to take some time.

For passengers that booked flights or hotels through Thomas Cook but not as part of a package holiday, ATOL will not cover bookings.

Passengers who booked flights or hotels using credit cards are likely to be protected by their card’s insurance and are advised to check with their card issuers.

Travel industry impact

The collapse of Thomas Cook, one of the world's oldest travel company's, is a sad day for the travel industry. Courtesy Diliff

As one of the world's longest-running travel companies, the collapse of Thomas Cook is likely to have an impact on the travel industry as a whole.

"It is extremely sad news for many thousands of Thomas Cook customers and of course the staff that have been made redundant, and as an industry we must come together to offer support to these people and focus on helping those affected," said Kirsten Hughes, MD and chief commercial officer at The Travel Counsellors.”

Elsewhere, the impact on tourism is likely to be significant. Osman Ayik, the head of Turkey's Hoteliers Federation told Reuters that the country could lose up to 700,000 tourists annually due to the collapse of the British tourism agency.