THOMAS Cook is reported to be at risk of collapse after the company confirmed they would need hundreds of millions of pounds to prevent folding.
Read on to find out what to do if you have flights or holidays booked.
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Is Thomas Cook going bust?
Tour operator Thomas Cook confirmed on September 20 that it needs £200million in extra funding to prevent going bust.
If it collapses up to 150,000 holidaying Brits could be stranded.
It would mean the Civil Aviation Authority dishing out £600m to rescue stranded Brits, according to an industry insider.
Thomas Cook said it is in talks with stakeholders including leading shareholder, Chinese firm Fosun, to close the gap in funding.
The UK’s oldest holiday company agreed a £900million rescue deal with Fosun last month – but lenders are now demanding another £200million.
Thomas Cook is struggling with massive debts and has seen its value plummet from £2.2bn to £180m in one year.
The firm had previously issued a fresh profit warning and reported a half-year loss of almost £1.5bn after a goodwill write-off of £1.1bn, reports The Times.
Analysts at investment bank Citigroup had also branded their shares “worthless” and said they should be marked at zero.
Thomas Cook, which served 22 million customers in 2018, has debts of around £1.25bn.
It also said that there have been several bids for all or bits of its business.
The company has closed 21 of its stores and its currency arm Thomas Cook Money is under review, plus there are more “cost efficiencies” planned.
More of its 566 stores will close when leases end and 150 jobs are being cut from head office.
The operator, which is led by German chief executive Peter Frankhauser, told The Sun in May 2019: “We have ample resources to operate our business and at the same time, as usual, our liquidity position continues to strengthen into the summer period.
“As an Atol-protected business, all of our holidays are protected under the package travel directive, so our customers can have complete confidence in booking their holiday with us.
“We’re looking forward to the summer season with 20 new own-brand hotels openings and some great offers for customers.”
What if I have the holiday and flights booked?
In light of Thomas Cook needing an extra £200million of funding to avoid going bust, worried customers have been contacting the tour operator to check whether flights and package deals are still going ahead, and it has been reassuring customers over social media.
Holidaymakers have previously been reassured they will not be left out of pocket if the firm sells, splits or closes.
That’s because Thomas Cook’s package holidays are Atol-protected.
By law, every UK travel company which sells package holidays and flights is required to hold an Atol, which stands for Air Travel Organiser’s Licence.
UK travel companies which sell package holidays and flights have to Atol protect them.
This means customers who have booked holidays with the firm are protected and can’t get stranded abroad or be left out of pocket.
If a travel company with an Atol ceases trading, the scheme protects customers who had booked holidays with the firm – making sure they don’t get stranded abroad or end up out of pocket.
However this doesn’t apply in the case of people booking flights and accommodation separately.
If you are not covered by the Atol scheme, you should also contact your credit card company or travel insurer. If you have travel insurance, check your policy for the phrase “airline failure”.
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What are my rights if the company goes bust?
In the unfortunate event of Thomas Cook going bust, here are some helpful tips on what you should do and what your rights are.
It’s important to keep all your booking information and make a record of your correspondence.
Before the holiday:
If you’re yet to travel, your first action should be to contact the travel company to make sure that your booking is in place.
Since Thomas Cook is Atol protected, any customer will be entitled to a full refund or replacement holiday should the travel firm collapse before the scheduled departure time.
First, contact Thomas Cook’s tour operator or agent, your accommodation provider and your flight airline.
If you booked through a travel agent and your tour operator goes out of business, contact your agent for assistance.
If you have made a booking with Thomas Cook and it has gone out of business, you may be able to make a financial claim.
However, some holidaymakers could be caught out if they have booked on Thomas Cook’s airline, which is separate from the travel firm, and sells flight-only trips, some of which are not Atol protected.
During the holiday:
If the travel agent you booked with goes out of business during your holiday, this shouldn’t affect your travel arrangements, Which suggests.
However, keep all your booking information and documents for your records.
Thomas Cook is also an Abta member, Abta Travel Association assists holidaymakers when things do not go according to plan.
The Package Travel and Linked Travel Arrangements Regulations require organisers of package holidays to provide protection for your money and to bring you home if necessary.
But what would happen if Thomas Cook or part of the business was sold?
Martyn James from Resover said: “When you book a holiday you enter in to a contract – so if another business takes over then your holiday transfers over to the new owners and you shouldn’t experience any problems.
“However it pays to know your rights if a mistake or problem occurs.”If the firm changes something about the holiday significantly (like the dates, hotel, flights) then you should be able to cancel without penalty – though I’d expect them to come up with a suitable alternative.”
He adds: “However, always take out a good travel insurance policy – and make sure it begins from the moment you book, so you’re covered if you can’t travel for any reason.”
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