Thomas Cook Collapses

[cjmillsnun]

It's outdated in my opinion at least because more and more people (including my wife and I) do everything on line ourselves. Nowadays you don't need human interaction to book flights, accommodation or hire cars. How on earth they still had 500 shops in the UK is beyond me.

That's great until something goes wrong. One advantage of those people who booked a package through TC is that they have ATOL protection, meaning they will get a refund. If your flight company goes belly up (many people booked flight only with TC) you're reliant on a credit card chargeback (if you used a credit card) or your bank being kind and refunding you if you used your debit card.

 

[158756]

If the flights lose money and don't otherwise serve a purpose, they will be scrapped. Ryanair have cut a lot of routes recently, supposedly because of the 737MAX fiasco, but it's safe to say that's not the whole story.

If they consistently lose money they'll be scrapped, generally with a few months notice or just by not putting any more on sale. They don't cancel random flights mid season because they aren't full or because half the passengers have only paid a tenner.

 

[richw]

But the whole business model of easyJet and Ryanair is to offer cheap fares is it not?
I've flown with easyJet on multiple occasions, and I wouldn't say the fares have been that expensive

I’ve always found their prices one extreme or the other. Rock bottom or sky high. I’ve always been quite flexible so have managed the rock bottom. Never paid more than £70 return. But I’ve seen the flights I’ve taken a few weeks apart at £500 return

 

[RichmondCommu]

That's great until something goes wrong. One advantage of those people who booked a package through TC is that they have ATOL protection, meaning they will get a refund. If your flight company goes belly up (many people booked flight only with TC) you're reliant on a credit card chargeback (if you used a credit card) or your bank being kind and refunding you if you used your debit card.

In all fairness the solution is clear; when booking flights choose the operator very carefully. Given that Thomas Cook had been in trouble for quite some time I'm astonished that people were continuing to book flights / packages with them.

 

[Meerkat]

I think you would be astonished by how many people have barely any knowledge about current affairs at all, let alone obscure business news!

 

[richw]

In all fairness the solution is clear; when booking flights choose the operator very carefully. Given that Thomas Cook had been in trouble for quite some time I'm astonished that people were continuing to book flights / packages with them.

I knew of their troubles when I booked my holiday. They were undercutting all their Rivals at the time. I knew it was a gamble whether I would get a holiday but my money was safe through both using a credit card to book and ATOL protection. We had a fantastic holiday.

 

[Tetchytyke]

They don't cancel random flights mid season because they aren't full or because half the passengers have only paid a tenner.

I never said they did bin things on the day, I said flights that don't make money or serve another purpose will be scrapped.

This was in response to the idea that aggressive yield management provides bargain fares at the other extreme. It doesn't, except in cases where an airline got their sums wrong, and these don't last long.

Given that Thomas Cook had been in trouble for quite some time I'm astonished that people were continuing to book flights / packages with them.

Why? The money is protected and TC were effectively having a fire sale. Bargains were to be had, if you were happy to take the risk. I'd have done it if I had any holiday or money left!

 

[DavidGrain]

The last time I booked a package deal was in 2001. I was aware that I was booked on a Sabena flight and I was fully aware that they were in financial difficulties but I decided that I was a savvy enough travellor to risk it. They actually failed two months after my flight. However the average person booking a package deal has no idea of the financial risks attached to flights and hotel accommodation. I once rang a hotel in the UK to enquire about making a group booking and was told by the receptionist that they were ceasing trading the following day and were not taking bookings.

 

[Robertj21a]

I have a particular dislike of extremely aggressive yield management techniques. Whether there's a person doing it with an evil laugh, or a computer programme, you're still being fleeced.

How are you being 'fleeced' when it's up to you whether you accept the price or not ?

 

[johnnychips]

^Quite. You either accept that the price is worth paying or not. If not, research other fares or times or modify your holiday plans.

 

[Mojo]

It's outdated in my opinion at least because more and more people (including my wife and I) do everything on line ourselves. Nowadays you don't need human interaction to book flights, accommodation or hire cars. How on earth they still had 500 shops in the UK is beyond me.

Thomas Cook still had an online presence however so like others I don’t think this would have made a difference. It would be interesting to see what proportion of their customers booked online vs in a shop.

I even noticed an Ad this evening for Jet2holidays which seemed to give greater prominence to making a booking in an independent travel agent versus online.

 

[FQTV]

Thomas Cook still had an online presence however so like others I don’t think this would have made a difference. It would be interesting to see what proportion of their customers booked online vs in a shop.

I even noticed an Ad this evening for Jet2holidays which seemed to give greater prominence to making a booking in an independent travel agent versus online.

Thomas Cook failed purely as a result of being unable to service its debt; in this regard it was exactly the same as House of Fraser and many others.

The internet is used as some kind of scapegoat/excuse. It’s a specious argument. Thomas Cook was a tremendous business which was critically compromised by the way that it had been treated and run.

Many others are just as precarious; witness Aston Martin, even, as a complete house of cards.

 

[StaffsWCML]

The scummy banks should be paying out here. They are the one that refused to refinance or agree the buyout from Fosun.

Next time these scumbags fail let them all go to the wall, no more bail outs. In fact we should immediately recall the state loan from RBS.

The law should be change to encourage these parasites to do the best they can to keep business afloat. The best way to do this is ensure they are bottom of any payment list when a business fails, the money should be share amongst the little men first.

 

[DavidGrain]

The scummy banks should be paying out here. They are the one that refused to refinance or agree the buyout from Fosun.

Next time these scumbags fail let them all go to the wall, no more bail outs. In fact we should immediately recall the state loan from RBS.

The law should be change to encourage these parasites to do the best they can to keep business afloat. The best way to do this is ensure they are bottom of any payment list when a business fails, the money should be share amongst the little men first.

Banks have to undergo vigorous stress testing by the Bank of England to establish their resilience to various economic factors including national and global economic downturns and a disorderly Brexit. Banks have to maintain liquidity ratios so that they can meet customers expected withdrawals and I am not just talking about you drawing £50 out of an ATM, I am talking about all the companies paying over the PAYE and NI contributions and the VAT on the 19th of every month. In my last job before I retired I happened to do the bank run one day and fortunately I was paying in a large number of cheques that day. The bank clerk commented on that and I said yes I need to do so as I was paying out £1.25m the next day. And we were not a large company.

Comments like that I have quoted above shows a lack of understanding of the economics as laws like those suggested would result in banks not lending to businesses and this country going into a major recession

 

[didcotdean]

If the UK government had contributed the additional money, it would have amounted to further subsidizing a Chinese investor’s leveraged buyout.

The initial rescue plan was £900m of new money plus conversion of £1.7bn of existing debt to equity. The conversion of RBS’s part of those loans to shares which would have been virtually worthless would have already amounted to a sizable taxpayer bailout possibly to the tune of several hundred million pounds. On top of this, RBS and the other lenders had also agreed to contribute up to £450m of “new money”, broadly matching Fosun's investment, yet Fosun would have a controlling stake in Thomas Cook despite contributing far less to the recapitalization than the creditors.

It was in the end Fosun that walked away from its own acquisition, declining to put in further money for its controlling stake. The last minute appeal from Thomas Cook to the government amounted to demanding an open-ended commitment to provide unlimited support to an insolvent company, without the government in return receiving any stake itself and the existing shareholders suffering no loss.

 

[Mcr Warrior]

Tonight's Channel 4 TV programme "Thomas Cook: the Rise and Fall of Britain's Oldest Travel Agent" not exactly shedding much light on the reasons behind the demise of the firm.

 

[scotrail158713]

Tonight's Channel 4 TV programme "Thomas Cook: the Rise and Fall of Britain's Oldest Travel Agent" not exactly shedding much light on the reasons behind the demise of the firm.

I don’t think they can really reveal that on a Channel 4 documentary not even a month after going bust

 

[dgl]

Seems like Hays Travel are going to be buying all Thomas Cook stores (rebranding them as Hays Travel), although whilst unconfirmed I would guess that locations which already have a Hays Travel one of the stores would end up closing. This will quadruple the number of stores Hays Travel operate, and given some of their stores are not in the largest of places (i.e. Crewkerne, although originally Bath Travel) they must know what they are doing.

https://www.bbc.co.uk/news/business-49985369

All 555 Thomas Cook shops are to be bought by rival Hays Travel in a move that could save up to 2,500 jobs.

The independent travel agent said the move gives it shops in areas where it had little or no presence, including Scotland and Wales.

John Hays, who set up the Sunderland-based firm 40 years ago, said he hoped the shops would reopen within days.

It had been an emotional day, he said, with many staff crying when they were told their jobs were saved.

He said it was difficult to give cast-iron guarantees about every Thomas Cook shop, because there would now be talks with individual landlords.

However, "it is certainly our intention to take on all the staff; to welcome them back," he added. The shops will be branded under the Hays name.

 

[ainsworth74]

Feels like a brave move to me! But then I'm not a businessman. Hopefully they're not financing it with leveraged capital and/or taking out a mountain of debt to pay for it all.

It'll be interesting to see how this pans out. Hays have a shop in Middlesbrough already on the high street whilst there was a Thomas Cook shop in one of the shopping centres about five minutes away. Can't imagine that the Thomas Cook shop will reopen as I doubt Middlesbrough needs to Hays outlets! Though I do wonder if they might not move some of their shops into the ex-Thomas Cook units if they're in a better location?

 

[richw]

The shops are all leased/ rented so not a huge outlay. Reported somewhere negotiated cheaper rents too on most. hays don’t have loads of debt neither and a completely different business model.

 

[dgl]

Though I do wonder if they might not move some of their shops into the ex-Thomas Cook units if they're in a better location?

That was my thought, the Hays Travel in Weymouth is lower down on St. Mary's Street whereas Thomas Cook is opposite M&S, so the Thomas cook store would be the more logical one to keep open. Plus if they get some good deals on the Thomas Cook stores it could be cheaper for them to lease that than the local Hays Travel location, thus sensible to close the more expensive shop.

 

[Meerkat]

They only have the TC shops for6 months (don’t really understand the
legalities of it being a licence) whilst they squeeze the landlords for better terms.
I assume most of the Hays branches are duplicated by TC ones - I therefore assume they can only play the landlords against each other if the Hays lease is short.

 

[DaleCooper]

I saw staff in the local Thomas Cook shop today.

 

[Peter Mugridge]

I saw staff in the local Thomas Cook shop today.

They'll be working for Hays but they won't have re-branded the shop yet.

 

[DaleCooper]

They'll be working for Hays but they won't have re-branded the shop yet.

Yes, I realise that.

 

[Cowley]

Yes, I realise that.

Ah. Looking for the old last minute deals to the Dark Side eh?
They just pretend to be closed when you walk up...

 

[DaleCooper]

Ah. Looking for the old last minute deals to the Dark Side eh?

That's a one way trip as I found to my cost.

 

[DavidGrain]

Ah. Looking for the old last minute deals to the Dark Side eh?
They just pretend to be closed when you walk up...

My understanding from local TV News is that the new Hays shops will open on Monday

 

[KashmireHawker]

For those who may not know: Fosun International brought the brand assets, along with the Casa Cook and Cook Club Hotel chains in November and the Fosun Tourism owned Thomas Cook Tourism UK Limited, is expected to be up and running come June.

http://www.thomascook.com is now a holding page, for a new site although the site map on the link, has shown Fosun are not hanging around.

 

[najaB]

For those who may not know: Fosun International brought the brand assets, along with the Casa Cook and Cook Club Hotel chains in November and the Fosun Tourism owned Thomas Cook Tourism UK Limited, is expected to be up and running come June.

Just in time for nobody to book a holiday...