Prime minister briefed on Thomas Cook's troubles

Prime minister David Cameron has asked to be briefed on what's happening at troubled tour operator Thomas Cook amid fears that its collapse could cost the taxpayer millions of pounds, it was revealed this afternoon.

Speaking to the Press Association, Cameron said: "I've obviously asked the business department to give me a report on what is happening in terms of Thomas Cook, because I think it is important to make sure this business is in a good, healthy state."

His comments came amid speculation that Europe's second largest tour operator, which carries 22m passengers a year, is "too big to fail".

The collapse of a licensed tour operator the size of Thomas Cook would take a devastating toll on the Air Travel Trust Fund, which is already £42m in the red. As the ATTF is propped up by Government guarantees, there has been speculation that the Government will intervene to ensure Cook gets the financing it needs to stay in business.

The Civil Aviation Authority, which is responsible for the ATTF, refused to say today whether it had held talks with Thomas Cook.

A spokesman said: "We do not discuss the financial position of any ATOL (licence) holder. I am happy to confirm that Thomas Cook still has an ATOL. Customers should not be influenced by speculative comments in the national media."

Thomas Cook's shares have recovered slightly today after nosediving yesterday on news that it had asked its banks for a further £100m funding to see it through the quieter winter months.

Interim chief executive Sam Weihagen has sought to reassure customers that the company's future is secure and that the company will report an underlying profit when it releases its end of year results, the announcement of which has been delayed until the conclusion of talks with its lenders.

With permission from Travelmole

we got caught with aegean last year, we booked on the internet and paid by credit card, we claimed our flight money back from the bank also they paid consequential costs so even though the flights were alot more we did not have to pay a penny and it only took 5 weeks to get our money back

Insurance 'temporarily suspended' on Thomas Cook flight-only:
http://www.travelweekly.co.uk/Articles/2011/11/24/38866/insurance+temporarily+suspended+on+thomas+cook+flight-only.html

David

Agents rally round Thomas Cook

Agents have pledged their support for Thomas Cook as the company continues to hit the headlines over its financial troubles.

Advantage Travel Centres leisure director Julie Lobue-Said accused the media of over playing the situation and said she remained confident in selling Thomas Cook holidays.

"We have absolutely no concerns as to what we're selling and are still recommending selling Thomas Cook products," she said.

She said Advantage was not concerned by the decision by insurance underwriter Northern & Western Insurance Company to temporarily suspend its supplier failure insurance on Thomas Cook flight-only and accommodation-only sales.

"This only applies to a small handful of our members who sell ATOL to ATOL. The vast majority of Thomas Cook products are ATOL protected," she said.

She said over-hyped media coverage of Thomas Cook's financial situation had further damaged the industry's reputation.

"Not in the trade press, but certainly in the consumer press they always want a horror story. It's not great for the industry, not for the economy and not for the consumer. It doesn't give the consumer any guidance," she said.

"We aleady have low consumer confidence and this will not help. As an industry we are used to deal with difficultities and it's a great shame that this has made the headlines."

IPP, the industry's other major insurance underwriter, has not withdrawn cover on Thomas Cook or Thomas Cook Airlines.

"Other Insurers may have overreacted to the recent press reports due to their lack of experience in the travel industry," said a spokesman.

With permission from Travelmole

Direct Hols (TC) wanted the final payment 10 weeks before departure - which I thought was a bit much so decided to wait until I got my final reminder.

I wonder how many other customers have been delaying paying their balances off by the due date agreed when the booking was made and whether this has contributed to TCs current financial troubles? And whether TC, and other TOs for that matter, will now start taking harder line about cancelling holidays as soon as the due date has passed? Or will they allow customers to push the boundary on this point in the expectation of eventually getting the full amount out of them?

Given that TOs T&Cs allow them to cancel immediately if you haven't paid the balance off by the due date it seems a dangerous game for customers to play to me. There's no point in feeling 'enraged and insulted' if this happens - especially if, as fredthedog originally did - you've deliberately decided to withhold the money just because even before their current financial troubles surfaced, you think paying off the balance 10 weeks before departure is a bit much. After all most DIYers will have had to pay for their flights up front and in full at the time of booking and possibly accommodation and transfers etc too.

SM

Iv booked with thomas cook for lanzarote on march.(Shop) Stupidly I paid the balance off before it was due (16 december)-thought by doing that it would be one less money worry- and i could concentrate on paying for Christmas. Im kicking myself now!!- and for not using a credit card-!

Booked main holiday june - again thomas cook.(Online). As we put a certain amount away every week into our holiday account. I said to other half a few weeks back "Im going to pay the holiday balance off- then we can concentrate on the spending money". Thankfully I just have not had time to get around to doing it. Thats due in april.

Booked accomodation only online for september next year - thomson- paid in full.

Im presuming thomson/first choice/manos/airtours/portland and the other tui companies will be affected- it cant just be thomas cook can it?

Im absolutely livid with myself- as I have never booked a holiday with thomas cook ever. Nearly always booked flights jet2/accomodation travel republic. With many companies going bust- I thought it would be safer to book through a reputable company. Really wish I hadn't bothered!

Belly

bellbaby
It is Thomas Cook with problems, not TUI, so none of their companies Thomson, FC, Portland etc have anything to do with it.

Thanks for clarifying that sunaddict-

At least my accomodation in september is safe!!

Belly

...but you mentioned Manos and Airtours, they are TC companies. Under normal trading conditions there probably won't be any danger of collapse. But add the British media trying to create a disaster with people behaving hysterically and anything's possible. I bet TUI takings also drop as a result of this as people half read badly written articles and get the numerous subsidiary companies mixed up.

If TC were to collapse could ABTA and ATOL bonding survive as we know it? And what would become of the UK package tour industry if it didn't?

Belly

If it is a package holiday you have booked then it is ATOL bonded, provided ATOL can survive the collapse of TC.

If you paid by Visa debit card then you are also protected with Visa Chargeback as long as you submit a claim within 120 days of knowing there is a problem.

luci

Thanks for that Lucy.

Yes they are both packages. March one booked in TC shop- paid deposit by visa debit £520- and the rest nearly £1000 in cash. This holiday was for 4 adults- for sons 18th. Im hoping as I paid over £1`00 on debit card- iof the worst came to the worst I wouold be able to claim all of it back. (?)

June a package-booked online- £300+ deposit by visa debit- £600+ to be paid April. This was direct holidays, (part of TC)- presuming this holiday may be effected. (?)

Belly

There is some information on the chargeback scheme HERE

luci

luci HT Mod wrote:

If it is a package holiday you have booked then it is ATOL bonded, provided ATOL can survive the collapse of TC.

If you paid by Visa debit card then you are also protected with Visa Chargeback as long as you submit a claim within 120 days of knowing there is a problem.

Trouble is that if ATOL doesn't survive and everyone claims on their credit card guarantess then the banks that provide those cards take the hit......and they're not exactly flush, could push the financial sector further into trouble.

Thomas Cook has agreed a £200m loan deal

http://www.travelweekly.co.uk/Articles/2011/11/25/38896/thomas-cook-agrees-200m-loan-deal-with-banks.html

luci

Thomas Cook secures bank loan

Thomas Cook Group has managed to get a £200m loan from its banks and has thanked its partners, suppliers and customers for their support over the last few days.

Issuing a statement late on Friday evening, it said it has secured the cash until 30 April 2013, replacing the £100m short-term loan announced on 21 October 2011.

In addition, its banks have agreed a further relaxation of the financial covenants under the existing facilities.

This, said Thomas Cook, provides it with "much increased headroom to deal with unexpected events and the effects of an uncertain economic environment".

It said a strategic review is planned to help the board reduce the company's debt and reach a more "appropriate capital structure" over time.

"I am absolutely delighted that we have reached agreement and I would like to thank the banks for acting so swiftly," said group chief executive Sam Weihagen.

"Over the last few days, we have been overwhelmed by the messages of support from our holidaymakers, suppliers and partners and I would like to thank them for their good wishes and our employees for their hard work and dedication.

"For over 170 years Thomas Cook has provided customers across the world with fantastic travel experiences. Today they can look forward confidently to holidays with us for many years to come."

Thomas Cook will announce its preliminary results for the year ended 30 September 2011 during the week starting 12 December 2011.

With permission from Travelmole

I get the feeling this breathing space will be used to wind down a lot of UK activities. They aren't doing well competing with online companies in the cheap end of the market and may decide to cut their losses. Their main money making markets are Scandinavia and Germany.

So 2012 bookings are safe (although ther emay be some consolidation of off-peak holidays) but the 2013 season will be well into planning and I suspect that will have some big cuts in resorts, hotels and flight programme.

Not sure where this leaves Co-op Travel, whether it will be possble for them to get out of their new alliance and carry on as before.

Open letter from Thomas Cook chief exec

Sam Weihagen, group chief executive at Thomas Cook Group, has this morning issued the following open letter following news that the company has secured a £200m bank loan (see earlier story).

"What a week it's been for Thomas Cook, its people, partners and, most importantly, our valued customers. We've received a great deal of attention and many have been voicing their opinions on our company.

I'm so pleased to let you know that our banking discussions have been completely successful and I want to show our appreciation for the incredible encouragement and support we have received over the past few days.

Thomas Cook today is an even stronger and more confident company. You can be sure that your holiday really is in safe hands with us and so, we look forward to welcoming you to one of our stores, our websites, onboard our aircraft and into one of our many thousands of resorts worldwide very soon.

As one of the world's largest leisure travel groups, we have the most recognised and established name in the industry. Our customers have trusted Thomas Cook with their holidays and travel experiences for more than 170 years, so we know just how much they mean to you. That's why, all over the world, across 22 different countries, we have a team of more than 31,000 colleagues on a mission to go further every single day to make your holiday time with us the best time of the year. We feel proud and privileged to have been part of the Great British heritage for nearly two centuries and I have no doubt that we will still be in another 170 years and beyond.

Thank you once again for your extraordinary support, and a big thank you to the thousands of Thomas Cook people who have worked tirelessly over the last few days to ensure there has been absolutely no impact at all on the holidays and services we deliver for our valued customers."

With permission from Travelmole

TC hits back at rivals for cheap digs

Ian Ailles, CEO for mainstream at Thomas Cook UK & Ireland, has hit back at rival companies for taking a 'cheap dig' during its time of financial uncertainty.

"Some companies have taken the opportunity to have a cheap dig," he said. "It's not something we would do, but we've broad shoulders and there's been overwhelming support from the majority and we're concentrating on what we do best, sending people on their hard-earned holiday."

In a statement issued this morning, he said: "I've been overwhelmed by the support from customers who've come out in their droves to show their support - not just by booking holidays this week, but by taking the time to write to us. We are extremely grateful and I would personally like to thank them.

"Thomas Cook is the original package holiday provider. No other travel company has seen or experienced more over the past 170 years. Having weathered depressions, recessions and two World Wars, Thomas Cook is certain to remain at the heart of the high street and taking Brits abroad for many more years to come."

Thomas Cook has admitted it saw a 30% drop in sales in the days after it announced it needed more money.

With permission from Travelmole

Good Luck TC. I would hate to see them fold. Imo they are just as good as Thomson's and if they went out of business Thomson would then get the monopoly on the Package holiday market and their prices are high enough already.

Just think about the implications of that Shirley - Thomsons prices are higher, Thomas Cook have financial problems - there's probably a link there! Maybe if TC charged the same as Thomson they wouldn't have these troubles. And if they didn't pay so many brand managers to compete against each other for the same business they might do better, how long left for Airtours, Direct Holidays etc.?