Thomas Cook, the world's oldest travel firm, collapsed today, stranding hundreds of thousands of holidaymakers around the globe and sparking the largest peacetime repatriation effort in British history.

What happens now and why did it collapse?

Who is affected?

The firm ran hotels, resorts and airlines for 19 million travellers a year in 16 countries, generating revenue in 2018 of £9.6 billion. 

It currently has 600,000 people abroad, including more than 150,000 British citizens. 

Thomas Cook employs 21,000 people and is the world's oldest travel company, founded in 1841. The company has £1.7 billion of debt.

What should affected Irish customers do?

The Commission for Aviation Regulation has said Irish customers of Thomas Cook who are currently abroad and are due to return to the UK on or before October 6 will be accommodated on a new flight.

In a statement, the CAR said such journeys will either be on a UK Civil Aviation Authority operated flight or on an existing flight with another airline.

"If you travelled from Belfast, you can avail of a repatriation flight to Belfast," it said.

However, these repatriation flights will only operate for the next two weeks and after this date passengers will need to make their own arrangements to get home.

Thomas Cook was covered by the UK ATOL travel protection scheme and so passengers should be reimbursed for the cost of returning, but should keep their receipts, the CAR said.

In the event that a booking was not covered by ATOL, the CAR said customers should contact their card issuer, bank or travel insurer for advice about the possibility of claiming a refund.

"Some non-flight packages or hotel bookings may be protected by trade organisations in the UK such as ABTA," it said.

For customers of Thomas Cook who have booked but not yet travelled, the CAR said most holidays and flights booked through the company are now cancelled.

Refunds can be sought by making a claim through the ATOL scheme, it said.

Customers who have booked a Thomas Cook package through an Irish travel agent should also be covered under ATOL.

In such circumstances, the CAR is advising passengers to contact the Irish travel agent that they booked with.

More information is available at https://thomascook.caa.co.uk/.

What happens to UK tourists?

The British government has asked the UK Civil Aviation Authority (CAA) to launch a repatriation programme over the next two weeks, from Monday to October 6, to bring Thomas Cook customers back to the UK. 

"Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavour to get people home as close as possible to their planned dates," it said. 

A fleet of aircraft will be used to repatriate British citizens. In a small number of destinations, alternative commercial flights will be used. 

About 50,000 tourists are stranded in Greece, mainly on islands, a Greek tourism ministry official told Reuters today.

The CAA has launched a special website, thomascook.caa.co.uk, where affected customers can find details and information on repatriation flights.

For those customers not flying from Britain, alternative arrangements will have to be found. 

In Germany, a popular customer market for Thomas Cook, insurance companies will coordinate the response.

What is the advice to passengers?

"Customers currently overseas should not travel to the airport until their flight back to the UK has been confirmed on the dedicated website," the CAA said.

"Thomas Cook customers in the UK yet to travel should not go to the airport as all flights leaving the UK have been cancelled."

Who will pay for the cost of hotels?

The CAA said it was contacting hotels and other companies likely to be impacted by Thomas Cook's collapse to reassure them they will be paid. 

The regulator said that if holidaymakers are being asked to settle bills they should contact the CAA.
 
Thomas Cook package holiday customers are covered by ATOL - Air Travel Organiser's Licence - which protects accommodation and return flights. However, the CAA said some customers may be asked to relocate to other accommodation.

What happens if a holiday is booked for the future?

The CAA says that if customers have not yet started their trips most holidays and flights booked with Thomas Cook are now cancelled and customers should not go to the airport.

The Liquidation

Thomas Cook said it had entered compulsory liquidation and an order had been granted to appoint an official receiver to liquidate the company.

AlixPartners UK or KPMG will be appointed as special manager for the different parts of the business.

The Industry

The impact is already being felt further afield, with Australian travel group Webjet Ltd saying it was €27m out of pocket and British online travel group On The Beach saying it would suffer from helping its customers in resorts who had flown with Thomas Cook. 

The collapse could provide a boost, however, to major rival TUI, whose shares surged more than 10% in early trading today, and to Europe's overcrowded airline sector, which could benefit from the closure of Thomas Cook's airline.

Why did Thomas Cook collapse?

Thomas Cook was brought low by a $2.1 billion debt pile that prevented it from responding to more nimble online competition. With debts built up around 10 years ago due to several ill-timed deals, it had to sell three million holidays a year just to cover its interest payments.

As it struggled to pitch itself to a new generation of tourists, the company was hit by the 2016 coup attempt in Turkey, one of its top destinations, and the 2018 Europe-wide heatwave which deterred customers from going abroad.

Thomas Cook needed another £200m on top of a £900m package it had already agreed, to see it through the winter months when it receives less cash and must pay hotels for summer services.

The request for an additional £200m torpedoed the rescue deal that had been months in the making. 

Thomas Cook bosses met lenders and creditors in London on Sunday to try to thrash out a last-ditch deal to keep the company afloat. They failed. 

Under the original terms of the plan, top shareholder Fosun - whose Chinese parent owns all-inclusive holiday firm Club Med - would have given £450m of money in return for at least 75% of the tour operator business and 25% of its airline. 

Thomas Cook's lending banks and bondholders were to stump up a further £450m and convert their existing debt to equity, giving them in total about 75% of the airline and up to 25% of the tour operator business.

What did its CEO say?

"I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years," Thomas Cook CEO Peter Fankhauser said.~

"This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world."~