‘Are you going into administration?’ Holidaymakers flood Thomas CookMay 19, 2019
‘Are you going into administration?’ Worried holidaymakers flood Thomas Cook with fears about their summer bookings as travel firm risks COLLAPSE after revealing a record £1.5billion loss
- Holidaymakers have bombarded Thomas Cook with concerned messages
- The travel operator is struggling under the weight of a £1.25billion debt pile
- Justin Waite, 48, booked a holiday to Mexico and is worried about his travel plans
Worried holidaymakers have flooded Thomas Cook with fears about their summer plans as the travel firm risks collapse being branded ‘worthless’ after a £1.5billion loss.
The UK’s oldest travel operator is struggling under the weight of debt as it closes stores, axes staff and puts its airline up for sale in a bid to salvage its finances.
Holidaymakers have bombarded the official Thomas Cook page with posts and comments in a desperate hunt for answers over their travel plans.
Thomas Cook risks collapse with summer holidays in jeopardy as shares tumbled another 40 per cent yesterday after City analysts branded them ‘worthless (stock image)
‘I’m flying to Menorca six weeks today. I hope the financial situation will be settled soon’, one holidaymaker wrote.
‘Are you going into administration? because I have a holiday booked in October’, a worried traveller said.
‘I just booked for next May to Turkey, I really hope you’re not going into liquidation’, another person commented.
However Thomas Cook were quick to quash travellers concerns by reassuring them that the company’s financial state would not impact on future holidays or flight only bookings due to ATOL protection.
Justin Waite, 48, from Southampton, who hosts a podcast for private investor community Vox Markets, booked a holiday to Mexico for July with Thomas Cook and is worried about the company’s uncertainty.
The father-of-two told MailOnline: ‘I am a private investor and so I know about balance sheets and at the moment Thomas Cook have liabilities four times the size of the entire company and they are making a loss so they can’t reduce this debt.
‘They lost £1.4billion in the last six months.
‘Luckily we have insurance but I fear there may be some who don’t. I will not book another holiday with them again as I fear they are going to go bust.
‘I’m sure I’m not the only person thinking this, which will make their business suffer even more.’
It comes as analysts at investment bank Citigroup said the company is ‘worthless’ and should be priced at zero – and warned that customers would be put off booking package holidays which could further plunge the company into debt.
Hitting turbulence: Thomas Cook is struggling under the weight of a £1.25 billion debt pile
Warning of a bleak outlook for the business, Citi analyst James Ainley said its troubles were likely to ‘unsettle consumers and drive further weakness in bookings’.
Thomas Cook, which is now valued at around £180million, has struggled to keep up with customers’ changing travel habits as holidaymakers turn their backs on package deals and traditional resorts.
Is your Thomas Cook holiday safe?
Holidaymakers may be out of pocket in the event of Thomas Cook going bust.
The company’s package holidays are protected by ATOL – a financial protection scheme that most air package holidays sold by travel businesses based in the UK.
This means customers who have booked hotels and flights won’t be lose their money or be stranded abroad.
But Thomas Cook boss Peter Fankhauser blamed Brexit uncertainty for Brits being put off their travel plans.
He said: ‘The prolonged heatwave last summer and high prices in the Canaries reduced customer demand for winter sun, particularly in the Nordic region, while there is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer’.
The company is currently taking drastic money-saving measures to ensure it stays afloat, including axing 150 head office roles, and closing 21 stores and 320 retail jobs.
The cash-strapped travel group were forced to put their airline up for sale in February in a bid to salvage its finances, with bidders thought to include Lufthansa and Virgin Atlantic.
Mr Fankhauser told ITV News that selling the profitable airline was a ‘good way’ to reduce the company’s debt.
It’s a stark change from a year ago, when its shares were changing hands at close to 150p, valuing the company at more than £2.2billion.
Michael Hewson, chief market analyst at trading firm CMC Markets, said: ‘Thomas Cook’s woes have gone from bad to worse after Citigroup downgraded the shares to sell with a 0p price target. Investors appear to be losing confidence in the ability of management to turn the ailing business around.’
Mr Fankhauser told ITV News that selling the profitable airline was a ‘good way’ to reduce the company’s debt (stock image)
The travel firm dates back to 1841, when 32-year-old Thomas Cook sold a one-day rail excursion for one shilling per head from Leicester to Loughborough.
The first trip, inspired by Cook’s belief that the working-class’s lives could be improved by travel and education, carried 500 people.
The company now sells package holidays, operates airlines in several European countries, owns hotels in 47 countries and has a travel money and insurance branch.
However, while the prospect of the business failing will be a worry for many of its customers, Thomas Cook said all of its holidays are Atol protected, meaning travellers will get a refund or a replacement holiday if it collapses.
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