Thomas Cook, the world’s oldest travel firm, collapsed on Monday, stranding up to 600,000 holidaymakers around the globe.
It’s such a big deal that it’s sparked the largest peacetime repatriation effort in British history.
Here’s what’s going on, and what happens next.
What went wrong?
There were multiple setbacks for Thomas Cook including:
- shifting travel habits
- the rise of online booking sites
- the sinking pound
- unusually hot summer weather at home that discouraged travel
That was all on top of a 1.6 billion-pound ($2.9 billion) debt pile from a decade ago that made it less able to react to change.
It had to sell 3 million holidays a year just to cover its interest payments.
It has been overtaken by online services like Airbnb and internet travel companies who may separate or combine hotel, rental car and flight offerings, which puts pressure on prices through comparison shopping.
“The company has struggled to adapt to a changing travel and retail environment,” said Michael Hewson, chief market analyst at CMC Markets UK.
UK Civil Aviation Authority (CAA) will run its repatriation programme over the next two weeks.
Until October 6, it’ll 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 on Monday.
Everyone that had a Thomas Cook holiday coming up in the next few days or weeks has been told to not even turn up at the airport because everything has been cancelled.
What about people who aren’t British?
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.
The Belgian branch of Thomas Cook said that clients who booked their holidays via Thomas Cook Belgium or its local partner Neckermann are covered by a travel guarantee fund.
he Dutch arm of the company said in a statement that customers who have booked a holiday are covered by a non-profit organisation that protects travellers.
Turkey’s Tourism Ministry said it would launch a credit package to Turkish businesses that may be negatively affected by Thomas Cook’s closure.
A Swedish Thomas Cook customer stranded on Cyprus is making the best of a bad situation, but told the Associated Press there’s no information on arrangements being made for him and five other Swedes he travelled with.
Who’s going to pay for all this?
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.
Thomas Cook package holiday customers are covered by ATOL — Air Travel Organiser’s Licence — which protects accommodation and return flights.
Anyone who hasn’t left yet will have the cost of their holidays refunded under this scheme, according to the BBC.
Things that weren’t booked as part of the package, like car hire, will have to be chased up by each person through their own travel insurance.
However, the CAA said some customers might have to give up the hotel they’d been booked in for an alternative.
Are Australians caught up?
Yes, but nowhere near as many as is the case in the UK.
Thomas Cook hasn’t operated in Australia for almost two decades.
Where the pinch is being felt the most is by Australian travel group Webjet Ltd, which says it’s 27 million euros ($48 million) out of pocket because of the collapse.