British travel giant Thomas Cook declares bankruptcy

After failing to reach an agreement with investors, the Thomas Cook Group, UK’s renowned travel agency has ceased operations this Monday, September 23, 2019.

British travel giant Thomas Cook declares bankruptcy

Thomas Cook, the world’s oldest travel agency with hundreds of businesses under its umbrella of operations including flights, hotels, and cruises has officially ceased trading and deemed financially insolvent.

 

Apparently, the tour giant has been witnessing a stagnating interest for its destinations in Europe due to economic uncertainty and Brexit woes. Coupled with online competitors as well as easier access to flights and hotels by individuals who could now plan their vacation themselves, the profit margins had to be trimmed excessively in order to be competitive. The latest records show the group had accrued a considerable debt of more than $2 billion dollars which ultimately proved overwhelming.  

 

Vacationers stranded abroad

With the company terminating all operations, all bookings have been cancelled and the planes of its airlines have been deserted. As if the thousands of employees finding themselves today without employment wasn’t bad enough, there’s also the issue of the approximately 600.000 Thomas Cook customers who are currently on holiday and have no way to get back home.

 

Some travelers have also been held hostage at their hotels since the payment for their accommodation was to be settled by the company which has now gone bust. Government and regulators are now on the move to handle the repatriation of more than 150.000 stranded Britons while those who have booked their future holidays with the group are growing increasingly nervous while waiting for an update regarding their reimbursement.

Brexit

 

The company’s insolvency, however, is going to have devastating effects for the UK economy as well as for other hotels and resorts around the world. The travel firm had partners and suppliers in 16 countries serving more than 19 million customers annually.

 

With Thomas Cook going under, popular destinations in Greece, Spain and Turkey will probably see a dramatic decrease in the inflow of British tourists and their economies will likely feel the brunt as well.

 

 

 

No bailout

Some politicians have called for the provision of financial aid to save the historic firm and secure the jobs of its thousands of employees in the same fashion the taxpayer’s money was used to bail out the banks during the 2008 financial crisis – an initial bailout of more than £500 billion.

 

Reportedly, the company also requested a £150 million rescue package from the government which was promptly rejected. Commenting on the group’s request, PM Boris Johnson said that bailing out Thomas Cook would create a dangerous precedent where, in future, other companies might expect the same treatment.

 

In fact, other prominent British airlines such as Ryanair and Easyjet have also reported deteriorating demand due to Brexit uncertainty and the future doesn’t seem quite promising.

 

A cheaper pound

Since the Brexit referendum in 2016, the pound sterling has been gradually losing its footing against the euro with more than 11% drop – currently trading at €1.130. The weakened currency is of course very appealing to holidaymakers who will find that booking a vacation in one of UK’s top destinations is now much cheaper overall.

Therefore, while Britons are foregoing their vacations, tourists eyeing the UK will be more than glad to take advantage of the sinking pound and the cheaper shopping, eating and transportation costs that come with it.

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on email
Email

Recent .

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
Dollar still on ten month lows while AUD gains
Stock Market Forecast: S&P 500, Dow Jones, NASDAQ Predictions and Analysis for 2021

With 2021 just around the corner, financial analysts are offering their outlook on where the stock market is headed in the coming year — and many of these experts are hoping for a bullish outcome. Read on.

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin rollercoaster sees massive highs & lows – Is the crypto bubble set to burst?

Bitcoin hit a high of $42,000 on January 8 only to plunge by nearly 21% on Monday (January 11) to $35,555. Is the cryptocurrency bubble set to burst?

Read More →
˄