Europe

Tens of thousands stranded as Thomas Cook collapses

A Thomas Cook plane on the runway at terminal one of Manchester Airport. Source: AAP

British travel group Thomas Cook on Monday declared bankruptcy after failing to reach a last-ditch rescue deal, triggering the UK's biggest repatriation since World War II to bring back stranded passengers.

Tens of thousands of people have been left in limbo following the collapse of travel company Thomas Cook, which failed to secure a last-ditch rescue deal.

Travel giant Thomas Cook has ceased trading after failing to secure a last-ditch rescue deal, leaving an estimated 150,000 Britons abroad awaiting repatriation.

The company was unable to secure the extra $A368 million needed to keep the business afloat following a full day of crucial talks with the major shareholder and creditors in the UK on Sunday.

Richard Moriarty, the chief executive of the UK Civil Aviation Authority (CAA), said the government had asked his organisation to launch "the UK's largest ever peacetime repatriation".

"Thomas Cook Group, including the UK tour operator and airline, has ceased trading with immediate effect," the CAA said in a statement.

"All Thomas Cook bookings, including flights and holidays, have now been cancelled."

Thomas Cook's chief executive Peter Fankhauser said his company had "worked exhaustively" to salvage a rescue package.

"Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable," he added.

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

"I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years."

Webject takes financial hit

Australian and New Zealand online travel agency Webjet looks set to lose more than $43 million following the collapse of Thomas Cook.

In a statement to the ASX, Webjet said it would consider the $43 million its owed by Thomas Cook as a "one off expense". 

The company's expected earnings from its WebBeds accommodation  business have also been reduced by about $7 million as a result of Thomas Cook's collapse. 

Webjet shares dropped as much as 6 per cent but rallied by early afternoon to sit 2.5 per cent lower at $11.22.

Webjet said it would cover the loss with existing cash reserves, plus undrawn debt facilities. 

Mission to bring home stranded passengers

Transport Secretary Grant Shapps said dozens of charter planes, from as far afield as Malaysia, had been hired to fly customers home free of charge and hundreds of people were working in call centres and at airports.

Mr Shapps the government and UK CAA was working round the clock to help people.

The CAA's dedicated website for the firm's customers, thomascook.caa.co.uk, crashed shortly after the announcement.

The Department for Transport (DfT) said all customers currently abroad with Thomas Cook who are booked to return to the UK over the next two weeks will be brought home as close as possible to their booked return date.

Unions representing Thomas Cook staff, of which there are 9,000 across the group in the UK, had previously urged the government to intervene financially.

A million customers will also lose their future bookings, although with most package holidays and some flights-only trips being protected by insurance, customers who have not yet left home will be given a refund or replacement holiday.

One of the world's oldest and largest travel companies, the firm had been trading for 178 years - having been established in 1841 by a cabinet maker who organised a day trip for temperance movement supporters.

According to its website, as of this year the group employed 21,000 people in 16 countries, operated 105 aircraft and 200 own-brand hotels and resorts.

Stay up to date with SBS NEWS

  • App
  • Subscribe
  • Follow
  • Listen
  • Watch