Over half a million British travelers are stranded on vacation today, after 178-year-old travel firm Thomas Cook folded before dawn this morning. Just four weeks ago, the British agency — which functioned as a tour operator and airline, and sold vacation packages — received a $1.1b rescue deal from Chinese investment group Fosun. It came a few months after Thomas Cook reported almost $2b in losses, but it apparently wasn’t enough. Thomas Cook needed another $250m to make it through the winter, when holiday booking experiences a natural hit, and talks officially broke down.
This is devastating news for 21,000 employees now out of a job (including 9,000 alone in the United Kingdom), and for local hoteliers, restaurants and tour operators long dependent on Thomas Cook’s extensive bookings network. It’s also a dramatic exhibition of young travelers’ preference for shorter, more affordable “micro-trips,” which they can plan on their own time. Thomas Cook had to sell three million trips a year to cover its interest payments; there was nothing athletic or adaptable about its business model, and the British government, when approached about a possible bailout, decided it was a bad bet.
That said, the government is stepping in to help Britons get home safely. The UK’s Civil Aviation Authority has chartered 40 airplanes from a number of airlines, including Virgin Atlantic and easyJet, and is currently working to bring its 150,000 countrymen and women home. The rescue effort, which literally has a name — Operation Matterhorn — began today, and the fleet bringing people home immediately becomes Britain’s fifth-largest “airline.” For those lucky enough to get on one of the 64 routes flying today, this will be a strange, unexpected 24 hours of travel woes. For those on the tail-end, as efforts could take two weeks, especially the many honeymooners (!!!) trying to get home, from Cancun, or the Greek islands, this could be the start of an unconscionable nightmare.
If you’re a British reader of InsideHook: thanks for the support, and you can keep tabs on your rescue flight home here. Meanwhile, the money you spent on your holiday package is protected by the ATOL scheme. Find more information here.
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