After 178 years of operation, British tour operator and of the world’s oldest travel brands with 19 million annual customers, Thomas Cook closed business on Monday.
How bad were things?
Quite bad, Thomas Cook had a debt of 1.7 billion pounds, about $2.1 billion, Although It had been in negotiations to obtain $250 million in emergency financing when it declared bankruptcy.
About 600,000 travellers around the world were affected by this shutdown, and more than 20,000 employees worldwide suddenly became jobless.
Why did this happen?
Although travel bookings business has increasingly moved online, Thomas cook failed to do so fast enough, opting instead for physical stores and telephone assistance.
Thomas Cook was a one stop shop for travel offering flights, hotels etc. but over the years due free access to the different elements of a travel tour, demands for travel tours have declined, meaning less business for the company.
Also In most recent times, the advent of Brexit has meant that many traveller have delayed their travel plans untill the fate of Uk is known, causing a shortage of normally expected revenue,
Did anyone see this coming?
Well customers who were left stranded might have been surprised, but not the British governement. The British government knew about this but refused bail out the battered company.
The Uk government is of the opinion that doing so would set a bad precedent by encouraging other troubled companies to take undue risks. It’s fair to say Thoma cook got cooked!