ECONOMY

UK travel giant Thomas Cook collapses leaving hundreds of thousands stranded

A security person stands next to the entrance of the German headquarters of Thomas Cook. (File photo: AP)

British travel giant Thomas Cook declared bankruptcy on Monday after failing to reach a last-ditch rescue deal, stranding hundreds of thousands of holidaymakers around the world.

British Prime Minister Boris Johnson pledged to return stranded British travellers back home and said that the government had rejected a request from Thomas Cook for a bailout of about 150 million pounds ($187.1 million) because doing so would have been a “moral hazard.”

The company ran hotels, resorts, and airlines for 19 million people a year in 16 countries. It currently has 600,000 people abroad, forcing governments and insurance companies to coordinate rescue operations for their citizens.

The 178-year-old operator had been seeking £200 million ($250 million) from private investors to save it from collapse.

The liquidation marks the end of one of Britain's oldest companies that started life in 1841 running local rail excursions before it survived two world wars to pioneer package holidays and mass tourism.

“Despite considerable efforts, those discussions have not resulted in agreement between the company’s stakeholders and proposed new money providers,” Thomas Cook said in a statement.

“The company’s board has therefore concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect.”

Chief Executive Peter Fankhauser said it was a matter of profound regret that the company had gone out of business after it failed to secure a rescue package from its lenders in frantic talks that went through the weekend.

The UK’s Civil Aviation Authority (CAA) said Thomas Cook had ceased trading and the regulator and government had a fleet of planes ready to start bringing home the more than 150,000 British customers over the next two weeks.

“I would like to apologize to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years,” Fankhauser said in a statement.

“It is a matter of profound regret to me and the rest of the board that we were not successful.”

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Last Update: Monday, 23 September 2019 KSA 10:38 - GMT 07:38
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