We knew the risk booking our 25th Anniversary celebrations with Thomas Cook for September next year but had little choice as they are/were one of only a few who go to our chosen Greek Island.
I honestly care little about our cancelled holiday, we can work around it. But the affect this will have on our beloved little Island, which has already been decimated by the refugee crisis, will be catastrophic.
And I thought our main issue would be getting a goat sitter. That was the easy part.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
I've used Thomas Cook before for there sport packages to see Barcelona at The Nou Camp and also Sporting Lisbon v Benfica at the start of the year.
Also did Real Madrid a couple of years ago booking it all ourselves.
It's no surprise they've gone under when like others have said, when you DIY your own trips it becomes a lot cheaper than when companies like Thomas Cook book it all for you.
That said though I feel for the staff affected especially when you see the vast bonuses handed out at the top of the chain which is clearly what causes more damage in the long run than savvy customers DIY booking.
Like all these failed enterprises the top execs wont have a care in the world as been creaming it for years it's the poor workers who are now going to struggle to pay mortgages and rent next month! But also a lot of smaller companys /businesses who were contracted to Thomas cook will now go under as well This whole affair will have a huge knock on effect Company I grafted for 17 years went under and what a surprise the 3 top directors all turned up at a similar rival company a week later! It all stinks All utter b***ocks
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
I think what's surprising to me is that the cost of the bridging loan is about £200M: what is the cost of them going bust in terms of repatriations, redundancies and pensions now being picked up by the public purse, not to mention the extra in benefits paid to all the staff who've lost jobs. Another short-sighted decision by the government.
The vast majority of the repatriation cost is covered by ATOL which is funded by the travel industry via every holiday you book for this exact reason.
No it isn't. When Monarch went bust, the Government spent £50-60 million on repatriation. ATOL may cover some costs but not the vast majority.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
High Street (and prime shopping center) shops is what has done them. If, who ever the government is, don't do something about business rates whole town centers will die. Look in the high street now, it's all bookies (they will go now that fixed odfsbetting isn't the cash cow it was, not that that's a bad thing BTW), charity shops, pawn brokers and chains of coffee shops.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
Should the government really be bailing out private companies? I'm assuming flights were ATOL protected so people should, in theory, get their money back.
It's an awful situation but I'm not sure it's a stick to be beating the government with, as others have said, the business model has been somewhat unviable for years.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
High Street (and prime shopping center) shops is what has done them. If, who ever the government is, don't do something about business rates whole town centers will die. Look in the high street now, it's all bookies (they will go now that fixed odfsbetting isn't the cash cow it was, not that that's a bad thing BTW), charity shops, pawn brokers and chains of coffee shops.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
Charging twice the price of what it costs to do a simple google yourself is what done them.
I think what's surprising to me is that the cost of the bridging loan is about £200M: what is the cost of them going bust in terms of repatriations, redundancies and pensions now being picked up by the public purse, not to mention the extra in benefits paid to all the staff who've lost jobs. Another short-sighted decision by the government.
The vast majority of the repatriation cost is covered by ATOL which is funded by the travel industry via every holiday you book for this exact reason.
No it isn't. When Monarch went bust, the Government spent £50-60 million on repatriation. ATOL may cover some costs but not the vast majority.
My understanding is that there is also no obligation on the Government via the CAA to repatriate those that elected to arrange their own flights which aren't covered by ATOL - but they do nevertheless provided you are due back in the next two weeks.
Resource at the CAA is taken from all sorts of areas to get those stranded home (my wife is head of training, development and recruitment at the CAA but was on the front line doing her bit out of office hours and at weekends to help during the Monarch episode) as they simply do not have the staff to cope with such eventualities. I believe Monarch repatriated 100,000 and the figure I've read is 150,000 Thomas Cook customers. That is a hell of a lot of organisation especially when you can't charter flights to an individual's original destination so coaches have to be sorted too.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
Should the government really be bailing out private companies? I'm assuming flights were ATOL protected so people should, in theory, get their money back.
It's an awful situation but I'm not sure it's a stick to be beating the government with, as others have said, the business model has been somewhat unviable for years.
I suppose there are times when it should has it can be the cheaper option in the long run. But the government has to look at whether this is a blip or a long standing issue that will require more and more money to bail the company out going forwards. Added to that, even if Thomas Cook survived who is going to risk booking a holiday with them?
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
Should the government really be bailing out private companies? I'm assuming flights were ATOL protected so people should, in theory, get their money back.
It's an awful situation but I'm not sure it's a stick to be beating the government with, as others have said, the business model has been somewhat unviable for years.
No, I wasn't suggesting the Government "be bailing out private companies", Stu. There's already a minimum compensatory mechanism to refund in part those customers who've lost money. But many will lose more than money .... they lose their special occasion, perhaps even their dreams. And, of course, the staff lose their jobs, pensions.
But in the context of SnowinBerlin's post, they'll be those who've already profited from TC's troubles or are set up to profit from picking the bones of the carcass.
This has been coming for a while, and perhaps even the company director's and executive have arranged to be well compensated in recent years? They won't suffer.
And the Government won't do anything to change that, will they?
Many years ago I started my working career with Thomson Holidays (now TUI), a major competitor of Thomas Cook. It astonished me even then that the whole marketing of package holidays was price led, with little or no regard to brand.
Thomson sent millions of people on holiday each year yet the company's profit was around £2M, purely from the interest earnt from having customers' money in advance in the bank. There was no trading profit.
Now we were not a well off family but even then my parents would consider paying £10 extra on a £400 purchase of a washing machine that had more features or was from a better quality brand. Was that true of package holidays? Oh no, if one particular holiday also offered by a direct competitor was £5 more expensive in the Thomson brochure, Thomson would sell diddly squat.
Much of my early marketing career was spent comparing prices across all the brochures then reducing Thomson's prices in the next brochure edition so we were cheaper. Intasun, another huge company, went bust during that time.
The mass market part of the industry has been an accident waiting to happen for decades. The underlying issues were there long before the internet.
Some of you may know that I now own and run a specialist tour operator offering tailormade holidays throughout UK and Ireland. We have always focussed on pricing carefully and offering a quality service to ensure we make a small profit and have a sustainable business. We have to jump through hoops every year to prove our viability to the CAA. Seems the big boys somehow blag their way through that regardless.
My heart goes out to the Thomas Cook staff on the ground and any holidaymakers whose future plans are thrown into disarray by this. The warning signs have been there for a very long time.
excellent post. I had no idea the old business model was not to generate any trading profit, mental.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
High Street (and prime shopping center) shops is what has done them. If, who ever the government is, don't do something about business rates whole town centers will die. Look in the high street now, it's all bookies (they will go now that fixed odfsbetting isn't the cash cow it was, not that that's a bad thing BTW), charity shops, pawn brokers and chains of coffee shops.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
Charging twice the price of what it costs to do a simple google yourself is what done them.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
High Street (and prime shopping center) shops is what has done them. If, who ever the government is, don't do something about business rates whole town centers will die. Look in the high street now, it's all bookies (they will go now that fixed odfsbetting isn't the cash cow it was, not that that's a bad thing BTW), charity shops, pawn brokers and chains of coffee shops.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
Charging twice the price of what it costs to do a simple google yourself is what done them.
Don't cost anything to Google something
Exactly my point, why pay them double the price when you can get online and book it yourself. Just relys on a combination of older people believing that an institution knows best and lazyness.
Due to go a week today on holiday with TC. Shame. The GF already booking replacement with TUI for this Sunday instead. We’re not all in a position to be able to do that, i know refunds won’t start taking place for another week. I feel for the other families/couples who have saved up to go away.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
High Street (and prime shopping center) shops is what has done them. If, who ever the government is, don't do something about business rates whole town centers will die. Look in the high street now, it's all bookies (they will go now that fixed odfsbetting isn't the cash cow it was, not that that's a bad thing BTW), charity shops, pawn brokers and chains of coffee shops.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
Charging twice the price of what it costs to do a simple google yourself is what done them.
The failure of Thomas Cook goes back to two strategic failures in acquiring the old Airtours business and then effectively buying the Coop travel business providing it with a huge high street footprint when it's own footprint was already challenged by the growth of e commerce.
The company simply never had the wherewithal to manage the debts and flaky business models that came with such acquisitions.
The tragedy is there is a viable business model here. No company should expect a government/ taxpayer to step in but there was no actual money being spent here merely a surety to cover future trading. Such surety could have been removed as part of a future rescue plan.
The cost of £100mn repatriation of customers services is a pure loss.
The plan as I understood it would have involved a substantial write down/ write off of the £1.5bn company debt. It would have allowed already interested overseas investors to establish a viable trading entity to move forward.
Indeed a Consortium of Spanish Hoteliers and the Turkish Government were on the point of offerring the £200mn needed.
The UK political shrug of the shoulders evidenced showed a poor level of understanding of the financial package, the damage to the UK brand internationally (Thomas Cook traded in 18 countries to 53 destinations) and displayed an abject lack of leadership.
It does not augur well for the Brexit challenges to come.
Interestingly the German government seem to be prepared to step in keep the German Thomas Cook sister company (Condor) trading.
I fear we will be reading a lot more about 'ATOL protection' and what it really means in the context of such a large bankruptcy.
At the end of their last reporting period, the fund size was <£200m. Reportedly 800,000 people have future (now cancelled) bookings with Thomas Cook before the costs of the repatriation of current holidaymakers is taken into account. Even Diane Abbott could work out that absent some type of government bailout of the scheme, the ATOL protection will prove anything but.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
Should the government really be bailing out private companies? I'm assuming flights were ATOL protected so people should, in theory, get their money back.
It's an awful situation but I'm not sure it's a stick to be beating the government with, as others have said, the business model has been somewhat unviable for years.
No, I wasn't suggesting the Government "be bailing out private companies", Stu. There's already a minimum compensatory mechanism to refund in part those customers who've lost money. But many will lose more than money .... they lose their special occasion, perhaps even their dreams. And, of course, the staff lose their jobs, pensions.
But in the context of SnowinBerlin's post, they'll be those who've already profited from TC's troubles or are set up to profit from picking the bones of the carcass.
This has been coming for a while, and perhaps even the company director's and executive have arranged to be well compensated in recent years? They won't suffer.
And the Government won't do anything to change that, will they?
What exactly can the government do though? Make it illegal to work for a failing company? Insist people don't take a salary if a company isn't profitable?
I feel for the people who have lost their holidays but sadly in life companies go under and this one has been on the cards for a while.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Out of interest looked at last accounts. They have 19m customers and profit per customer was £0.47p. Healthy gross margin but huge overheads. Finance and interest payments account for 2% of revenue, so not an issue.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
High Street (and prime shopping center) shops is what has done them. If, who ever the government is, don't do something about business rates whole town centers will die. Look in the high street now, it's all bookies (they will go now that fixed odfsbetting isn't the cash cow it was, not that that's a bad thing BTW), charity shops, pawn brokers and chains of coffee shops.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
Charging twice the price of what it costs to do a simple google yourself is what done them.
Don't cost anything to Google something
Exactly my point, why pay them double the price when you can get online and book it yourself. Just relys on a combination of older people believing that an institution knows best and lazyness.
But double of nothing is nothing, yeah can see why they went under now. 😉
@shine@shine166 you got dreads and was in the Oak last week? Think i stood next to you at the bar and was gonna buy you a beer but werent sure
I think what's surprising to me is that the cost of the bridging loan is about £200M: what is the cost of them going bust in terms of repatriations, redundancies and pensions now being picked up by the public purse, not to mention the extra in benefits paid to all the staff who've lost jobs. Another short-sighted decision by the government.
TC is already in the red to the tune of £900M. The extra £200M in isolation is a drop in a bucket, of course but TC's business model is already years out of date, its management's credibility is shot with financiers and creditors, the chances of this bailout securing even a short term success were feint to none. The vast majority of those redundancies couldn't be delayed more than a year at best. Brexit hasn't even happened yet (may not at all) and it has already contributed a huge dose of uncertainty to a commercial operation on this scale. Some round figure sums: 150,000 ish Brits currently on holiday with TC - rough average £1000 holiday cost per person - that's £150M turnover revenue for TC when just those holidays were booked - maybe another 500k holidaymakers effected through all TC group companies - that's phenomenal revenue that TC has already pissed away before all the bills came in. The repatriation effort is largely funded by the operators' historic subscriptions to ATOL. If the banks gambled on demanding this extra £200M cash safety net, expecting HMGov to pony up, then they've gambled and lost, cos they'll now get eff all of their debts repaid, had they taken the £900M chinese buy in that was apparently workable last Friday, they may have had a chance to recoup a little more. Bankers losing money ain't keeping anyone awake. 9000 Brits staring down the barrel of redundancy is rotten for them and bad for all of us too.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
Should the government really be bailing out private companies? I'm assuming flights were ATOL protected so people should, in theory, get their money back.
It's an awful situation but I'm not sure it's a stick to be beating the government with, as others have said, the business model has been somewhat unviable for years.
No, I wasn't suggesting the Government "be bailing out private companies", Stu. There's already a minimum compensatory mechanism to refund in part those customers who've lost money. But many will lose more than money .... they lose their special occasion, perhaps even their dreams. And, of course, the staff lose their jobs, pensions.
But in the context of SnowinBerlin's post, they'll be those who've already profited from TC's troubles or are set up to profit from picking the bones of the carcass.
This has been coming for a while, and perhaps even the company director's and executive have arranged to be well compensated in recent years? They won't suffer.
And the Government won't do anything to change that, will they?
I think there's not enough regulation or scrutiny in the financial sector, there seems to be a common theme where big companies / employers are left at the mercy of ruthless banks, private equity firms, who suck out any value left then let it crash
Loot at this article where a hedge fund was invested in it's failure. That's money taken from the pockets of ordinary people, plus the knock on effect to the taxpayer and into the pockets of hedge fund managers - that should not be allowed to happen
As I said on another thread, when my mate worked for them you had to go down five tiers of management to find a person with any travel experience. Clearly from what others have said, the failures of the well paid chancers at the top in this case would have caused this to happen in any industry, but this merry-go-round of executives who are just executives and bean counters seems to be doing many large UK companies no good at all. Someone with experience "on the coal face" should surely be in the boardroom of any company, in some capacity?
I have been chatting with my mate about the effect on his company, they are agents for TC's Cabo Verde business and handle their bookings in The Eden Resort here in Albufeira. He says they are owed about €100k in bookings. Fortunately they can swallow it, other smaller agencies may not - so the knock on effect can ripple far and wide.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
What profiteers? There's no private equity or asset stripping involved here. TC has been losing money for years now. It took on massive debts to keep the business going and got investment from China. The banks refused to lend any more money and so it is now in administration. Everyone loses here - the banks, Fosun (the Chinese investor) and of course TC employees and customers.
The Government should do alot more. It's another case where a big company suffers financially then is at the mercy of the Banks or private equity firms who suck all the value out of it, so they could be making profits but it's all going on extortionate interest payments, these private equity firms come in and charge huge admin fees and interest until they are totally unviable then dump them into administration. It shouldn't be allowed to happen when thousands of jobs are at stake and then less consumer choice in the future
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
The Government won't do anything.
They represent and act in the interests of the profiteers. But not the victims.
What profiteers? There's no private equity or asset stripping involved here. TC has been losing money for years now. It took on massive debts to keep the business going and got investment from China. The banks refused to lend any more money and so it is now in administration. Everyone loses here - the banks, Fosun (the Chinese investor) and of course TC employees and customers.
I suspect he's referring to the directors who have paid themselves ~£20m in bonuses.
Leaving aside the fact they've gone bust, how the hell does a firm like Thomas Cook afford to pay their directors £20m in bonuses? It obviously ain't performance related
Comments
I honestly care little about our cancelled holiday, we can work around it.
But the affect this will have on our beloved little Island, which has already been decimated by the refugee crisis, will be catastrophic.
And I thought our main issue would be getting a goat sitter. That was the easy part.
I can't believe a big firm with more than 100,000 customers at any one time is a failing business
Also did Real Madrid a couple of years ago booking it all ourselves.
It's no surprise they've gone under when like others have said, when you DIY your own trips it becomes a lot cheaper than when companies like Thomas Cook book it all for you.
That said though I feel for the staff affected especially when you see the vast bonuses handed out at the top of the chain which is clearly what causes more damage in the long run than savvy customers DIY booking.
But also a lot of smaller companys /businesses who were contracted to Thomas cook will now go under as well
This whole affair will have a huge knock on effect
Company I grafted for 17 years went under and what a surprise the 3 top directors all turned up at a similar rival company a week later!
It all stinks
All utter b***ocks
They represent and act in the interests of the profiteers.
But not the victims.
If you have high fixed costs and relatively low sales costs, you can only make a profit if sales volume is sufficient to cover the fixed costs. Once you cover your fixed costs the increasing sales would generate an ever increasing gross margin, so would appear attractive to investors, which included many of the respected financial institutions. Thomas Cook appears to have been heamouraging customers, part of which is down to reduced travel to certain destinations TC was heavily reliant on, so I guess it came down to sales volumes insufficient to generate enough cash to pay its day to day expenses - and little prospect of sales increasing.
There aren't even many high street recruitment agencies any more. I get people like to book holidays in shops but you don't need massive shops to serve 2 or 3 people a time.
It's an awful situation but I'm not sure it's a stick to be beating the government with, as others have said, the business model has been somewhat unviable for years.
Resource at the CAA is taken from all sorts of areas to get those stranded home (my wife is head of training, development and recruitment at the CAA but was on the front line doing her bit out of office hours and at weekends to help during the Monarch episode) as they simply do not have the staff to cope with such eventualities. I believe Monarch repatriated 100,000 and the figure I've read is 150,000 Thomas Cook customers. That is a hell of a lot of organisation especially when you can't charter flights to an individual's original destination so coaches have to be sorted too.
There's already a minimum compensatory mechanism to refund in part those customers who've lost money. But many will lose more than money .... they lose their special occasion, perhaps even their dreams. And, of course, the staff lose their jobs, pensions.
But in the context of SnowinBerlin's post, they'll be those who've already profited from TC's troubles or are set up to profit from picking the bones of the carcass.
This has been coming for a while, and perhaps even the company director's and executive have arranged to be well compensated in recent years? They won't suffer.
And the Government won't do anything to change that, will they?
The company simply never had the wherewithal to manage the debts and flaky business models that came with such acquisitions.
The tragedy is there is a viable business model here. No company should expect a government/ taxpayer to step in but there was no actual money being spent here merely a surety to cover future trading. Such surety could have been removed as part of a future rescue plan.
The cost of £100mn repatriation of customers services is a pure loss.
The plan as I understood it would have involved a substantial write down/ write off of the £1.5bn company debt. It would have allowed already interested overseas investors to establish a viable trading entity to move forward.
Indeed a Consortium of Spanish Hoteliers and the Turkish Government were on the point of offerring the £200mn needed.
The UK political shrug of the shoulders evidenced showed a poor level of understanding of the financial package, the damage to the UK brand internationally (Thomas Cook traded in 18 countries to 53 destinations) and displayed an abject lack of leadership.
It does not augur well for the Brexit challenges to come.
Interestingly the German government seem to be prepared to step in keep the German Thomas Cook sister company (Condor) trading.
I fear we will be reading a lot more about 'ATOL protection' and what it really means in the context of such a large bankruptcy.
At the end of their last reporting period, the fund size was <£200m. Reportedly 800,000 people have future (now cancelled) bookings with Thomas Cook before the costs of the repatriation of current holidaymakers is taken into account. Even Diane Abbott could work out that absent some type of government bailout of the scheme, the ATOL protection will prove anything but.
I feel for the people who have lost their holidays but sadly in life companies go under and this one has been on the cards for a while.
@shine@shine166 you got dreads and was in the Oak last week? Think i stood next to you at the bar and was gonna buy you a beer but werent sure
Some round figure sums: 150,000 ish Brits currently on holiday with TC - rough average £1000 holiday cost per person - that's £150M turnover revenue for TC when just those holidays were booked - maybe another 500k holidaymakers effected through all TC group companies - that's phenomenal revenue that TC has already pissed away before all the bills came in.
The repatriation effort is largely funded by the operators' historic subscriptions to ATOL.
If the banks gambled on demanding this extra £200M cash safety net, expecting HMGov to pony up, then they've gambled and lost, cos they'll now get eff all of their debts repaid, had they taken the £900M chinese buy in that was apparently workable last Friday, they may have had a chance to recoup a little more. Bankers losing money ain't keeping anyone awake. 9000 Brits staring down the barrel of redundancy is rotten for them and bad for all of us too.
Loot at this article where a hedge fund was invested in it's failure. That's money taken from the pockets of ordinary people, plus the knock on effect to the taxpayer and into the pockets of hedge fund managers - that should not be allowed to happen
https://finance.yahoo.com/news/thomas-cook-collapse-sets-250-094906671.html?guccounter=1&guce_referrer=aHR0cHM6Ly9uZXdzLmdvb2dsZS5jb20v&guce_referrer_sig=AQAAAElO8vMsbuiB5r1RMjgPDyEdtij5i3qUPgsBoaNoPPfLlFEsTlnA1MO75qvrc6-wRsVQ3SAoEfU1sLR3pTBuCLzwI8WI5cMqXcserSu9a9B5AYiXQ9Bixg-p27TE0pwuEOukSZsQlJX6px4GN5AGZWgDixBZeu4T56ON_3rC8Peq
I have been chatting with my mate about the effect on his company, they are agents for TC's Cabo Verde business and handle their bookings in The Eden Resort here in Albufeira. He says they are owed about €100k in bookings. Fortunately they can swallow it, other smaller agencies may not - so the knock on effect can ripple far and wide.