Thomas Cook

Should the U.K. Government have stepped in with £200m and saved Thomas Cook - well, at least for the time being ?

In principle I don’t agree governments should get involved, state ownership or intervention, bailouts, mostly are all good money after bad.
In hindsight, maybe, a bailout with a plan to wrap up the company & recover what assets were available, might have been the most cost effective & least expensive considering the cost of repatriation.
It’s a sad day, but from what I know & have seen of TC it was on this same rocky slope for a number of years. It seems this low (lowest rock bottom) cost holiday package business model is the problem.


Hmm…If underneath a company looks sound and can be turned around after a short term injection of funds, then perhaps.

However, from the outside the firm seems to have been a bit of a basket case for some years and who knows how much money would have been needed.

I suspect though they’re most wary about setting a new precedent and being seen as pumping taxpayer money into this would be seized on by the media as a bad thing. Much like they’re currently suggesting that not rescuing it was a bad thing…

I think it’s more their business model belonged to a by gone era. Their primary service was investigating and packaging tourist services into a holiday bundle… when access to such information was more difficult for most.
These days many people simply do that themselves using the internet…and it is usually more straightforward.
Thomas Cook is sadly another retail service provider that didn’t / or couldn’t sufficiently adapt their business model with the advent of mass consumer web use.


When was the last time you went into a High Street travel agent and booked a package holiday?

For us it would be 30yrs or more ago.

Bailouts fine for industries with strategic importance and ongoing viability (and I think you can count banks as both) but not this case.


Though I do find it slightly ironic… in the mid 90s when I was involved with developing home hub services that could be accessed via the TV on platforms like Sky , this was before the proliferation of mass consumer web use, that Tomas Cook was one of those companies that embraced the new technology… but perhaps simply saw it of providing new reach to their services rather than understanding that it would radically change their business model over tine … however not many of us involved with the early web, and early consumer online services imagined it would expand as it has done.

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Definitely not.

In principle, as a tax payer who would be paying for the rescue, I do not support government money being used to prop up the leisure industry. I would rather see see money spent on low cost and/or social housing, the NHS, the national infrastructure, etc. If a business fails, it fails. If it’s too big to be allowed to fail it should be nationalised. Where are the shareholders? Why aren’t they coming up with the money if it is possible to rescue the company?

Yes - we spend tax payers money on much worse things and if it could have saved jobs then may have been worth it.

I doubt it would have saved jobs in the long term, it would have cost a lot of our tax money to do not much more than slow down the inevitable end.
CT have 1.7b of debt, they have little or no assets, its all leased & rented.
They have been in trouble for a lot of years, badly run, too many overheads such as high street shops & employees & a business model thats past its sell by date.

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I think it is complicated by the business having been an airline and a package holiday provider, and I think it is a pity some means wasn’t found to split the two before the collapse, as it is possible the flight airline part of the business may have been rescuable, and Gov’t support to tide over a transition might possibly have been justifiable.

Who pays varies - in some respects most of us in different ways anyway: ATOL or Travel Agent protection schemes are of course ultimately charged to all customers, likewise credit card claims, and travel insurance claims.

I am have a direct interest in this as I have a holiday booked for next year, as a package, that had flights booked with TC though the holiday agent is independent: I have no idea yet what the outcome will be - it may depend on whether another airline offers flights to the same destination at a similar cost.

I think they could have leant the money (at commercial rates) and made sure there was very tight controls of the management of the company. (perhaps secured against the aircraft?)

We are very blasé about letting companies go to the wall, except if they are bankers

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If the comany was worth saving there are plenty of “clever” guys out there that would have put the money in to save it and turn it around. The fact that nobody from private equity or any other source went in speaks volumes.
As has been said of their debt and assets, this morning their bonds are trading 3p in the pound (ie pretty much worthless) and the coupon they pay is trading without, so they are zero coupon. Clearly game over.


TC didn’t own any aircraft. They leased them. So nothing to secure a loan against.

Also the £250M they wanted from the Government (not £200M apparently) was part of a refinancing that was going to cost just under £1Bn. So I think the Government made the right decision in the circumstances.



I looked at fleet numbers & I don’t believe what I see, some must be out of date, or it explains why they’ve gone bust.
The current active fleet is 34 aircraft.
However they have 116 aircraft on the fleet books in registration lists & it looks like they are all are leased from 30 or more companies, maybe leased to 3rd party cmpys who lease, who knows. Outside the 34 active it looks like the rest are in storage, can’t see if they are off lease waiting new owners, or on a storage lease deal. A mess whatever.

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No they shouldn’t. It’s simply an unnecessary holiday company. The writing has been on the wall for years. We went with Thomas Cook many years ago, had issues with the campsite, complained and they were hopeless. They told us that we should have read the description better and understood that ‘lively resort’ meant open air discos will 3am. WTF? We resolved never to give them another penny. I’m sad for the staff of course, and hotels that might be out of pocket, but from a personal perspective I say good riddance.

Thanks David, from what you say (and others) it looks as if it was right.


Some of the fleet are 737 Max and hence grounded, so that might skew how many planes they lease and how many are “active”

That’s not what I see
They have no Boeing 737 Max on any fleet list & the Boeing list has none booked against TC

Let me check. When we spoke to the company a few months ago I am sure they had some but I could be wrong ! I am getting old and senile …