Bankruptcy of U.K.’s Largest Travel Operator Strands Thousands of Vacationers

The U.K. government is undertaking the largest repatriation effort since WWII to bring home 150,000 Thomas Cook customers

Thomas Cook Plane
Aero Pixels via Wikimedia Commons under CC 2.0 license

Yesterday, hundreds of thousands of travelers around the globe found out that they were potentially stranded when Thomas Cook, one of the largest and oldest travel agencies and charter airlines in the world abruptly announced it was bankrupt. The firm immediately began liquidating assets and laid off its 22,000 employees. The event has put the British government on the hook for bringing 150,000 of its citizens home, the largest repatriation effort by the country since World War II.

Patrick Collinson at the Guardian reports that the 178-year-old travel company has experienced financial troubles for the past decade after merging with another travel group called MyTravel. Cook absorbed that company’s substantial debts while at the same time contending with increasingly competitive online travel hubs. That, plus a decline in bookings following Brexit uncertainty, all led up to the situation on Monday. When the company was denied a $250 million loan from private investors to stay afloat, it led to the immediate dissolution of the company.

Ben Perry at AFP reports that the bankruptcy has forced the government to step in. In a project dubbed Operation Matterhorn, the U.K. government and Civil Aviation Authority are lining up private flights to bring people home. “All customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home as close as possible to their booked return date,” the government wrote in a statement. It's not clear what, if any, type of arrangements are being made for non-U.K. travelers.

Any future travel plans arranged through Thomas Cook are canceled and customers will be refunded, mainly through government-back insurance, as Ceylan Yeginsu and Michael Wolgelenter at The New York Times report. The insurance will also reimburse hotels for customer stays, but some resorts don’t appear to have been made aware of that. Nightmare scenarios from people currently on vacation are slowly coming to light. Ian Westbrook at the BBC reports that all guests booked through Thomas Cook in one hotel in Spain had been locked out of their rooms and forced to pay out of pocket if they wanted to get back in. Several couples of elderly people were reported sleeping on couches in the hotel lobby. Molly Olmstead at Slate reports that up to 50,000 people are currently stuck on various Greek islands.

The New York Times reports that the shuttering of the company could have major impacts on certain destinations that rely heavily on Cook’s travel packages. The island of Crete, for example, receives 400,000 visitors booked by Cook annually. The Canary Islands receives about 3.2 to 3.6 million visitors via Cook charter flights each year.

Thomas Cook was started back in 1841 by cabinet maker Thomas Cook of Leicestershire, a supporter of the temperance movement. At that time, he arranged for a special train to carry supporters 12 miles to a temperance rally. As CNN reports, Cook continued to organize trips to temperance events and Sunday schools until 1845 when he organized his first commercial trip to Liverpool, complete with a travel guide for the event.

From there, things snowballed, and a decade later Cook was organizing trips to visit continental Europe, the United States and Egypt. In 1872, the company, continued by Cook's son, even put together the first round-the-world tour. Over time, it became the largest tour operator in Britain. It was considered so important that, after World War II almost bankrupted it, the tour agency was nationalized from 1948 to 1972.

When the company asked the government for a bailout this time around, the Boris Johnson administration said no. The New York Times reports that U.K. transportation secretary Grant Shapps pointed out that the company was billions of dollars in debt, and that a short-term bailout would not have saved it in the long run.

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