Thomas Cook Q&A: Why has it gone bust and how can I get help if I’m stuck abroad?
What has gone wrong?
Thomas Cook became saddled with a £1.6 billion debt following years of mismanagement and over-expansion. It announced a £900 million rescue deal in July, led by its biggest shareholder, Chinese conglomerate Fosun, and other backers.
Early this morning it was announced that the company had gone bust.
Why did it collapse?
The firm’s lenders, led by Royal Bank of Scotland and Lloyds, had said the company needed a £200 million loan to tide it over. The banks’ patience ran thin, given that they had already given Thomas Cook a £675 million overdraft.
Thomas Cook became saddled with a £1.6 billion debt following years of mismanagement and over-expansion. Pictured are Thomas Cook passengers checking in at Glasgow Airport yesterday
What happens next?
Administrators will be called in. It is a criminal offence to continue trading when insolvent.
What if I am already abroad with Thomas Cook?
Those who have booked a package holiday should be protected by the Atol scheme. This means they will be entitled to continue their holiday and fly home with another airline.
Foreign Secretary Dominic Raab yesterday promised that none of Thomas Cook’s estimated 165,000 customers will be left stranded abroad, paving the way for Britain’s biggest peacetime repatriation.
Passengers flying from Antalya, Turkey, to Glasgow on Friday were relieved to have boarded what could be one of Thomas Cook’s last ever flights. But when a fault with the plane prevented it from taking off, they were stranded at the airport overnight
It remains unclear how much this would cost, with estimates ranging from £100 million to £600 million. Many holiday-makers could be forced to wait for up to two weeks before returning.
What about future bookings?
If customers have Atol protection, they are entitled to a refund or alternative holiday. Those who booked flights only can claim a refund if they used a credit card and it cost more than £100.