UK travel giant Thomas Cook’s sudden collapse has sent shock waves throughout the industry and left hundreds of thousands of customers stranded overseas.
The estimated 600,000 holidaymakers reportedly stranded overseas are thankfully covered by UK scheme ATOL that offers protection in the form of compensation and if overseas covers the cost of bringing them back.
The repatriation of so many people, a project known as “Operation Matterhorn”, has meant that the UK government has had to hire planes including those of Qantas to transport holiday makers.
The demise of Thomas Cook has been a while coming but still took many by surprise. While some blame its merger with MyTravel Group in 2007, the changing nature of travel throughout the 21st century including fierce competition was also a factor. A falling pound has also weighed on their bottom line.
A last minute plea for £200 million ($369 million) in funding to keep the struggling company afloat but was turned down forcing its collapse.
Although Thomas Cook ended its Australian operations earlier this year, locally listed travel business Webjet still has a commercial arrangement with the company which has left it exposed to a $44 million hole that was owed by the UK firm.
“There will be no material adverse impact on Webjet’s liquidity as any write-off will be absorbed by existing cash reserves and undrawn facilities,” Webjet said.
“There will be no impact on the more than 3000 hotel contracts Webjet acquired from Thomas Cook in August 2016, which are wholly owned by WebBeds and available for sale to all WebBeds customers.
“The vast majority of these contracts are currently sold at full margin to non-Thomas Cook customers.”
Australian Tourism Industry Council executive director Simon Westaway said Thomas Cook’s collapse was not cause for great alarm.
“The UK is our fourth largest international market. China, New Zealand and the US are the top three by a long way, so I think we need to reflect on that point,” he said.
“As dramatic an announcement as it is, as much as it’s a world-renowned name, the reality is there are numerous sellers of travel into Australia for an international customer.”