Thomas Cook, a British travel company of over 178 years, has collapsed after concerted talks with lenders, shareholders and the government failed to produce a rescue package.
Thomas Cook’s officials said on Monday that the company had been forced to close shop despite “considerable efforts” that held at Latham & Watkins law firm throughout the weekend,
Thomas Cook had “no choice but to take steps to enter into compulsory liquidation with immediate effect,” the company said in a statement. Peter Fankhauser, the company’s CEO, said efforts were made to secure 1.1 billion pounds in rescue package but failed.
Other subsidiaries of Thomas Cook may also be shut down as part of the fallout, but the company insisted its airline operations would continue indefinitely.
The liquidation has put 21,000 jobs at risk and rendered 150,000 British holidaymakers stranded overseas. The government has begun its biggest emergency repatriation in peacetime. A further 350,000 foreign nationals are also stranded across the world on Thomas Cook holidays.
Prime Minister Boris Johnson said the government would review laws around the travel industry to protect holidaymakers and public funds in future.
“It is true a request was made to the government for a subvention of about £150 million,” Mr Johnson said on Monday en route New York for the United Nations General Assembly. “Clearly that is a lot of taxpayers’ money and sets up a moral hazard in the case of future such commercial difficulties that companies face.
“One way or the other, the state will have to step in to help stranded holidaymakers. One is tempted to reflect on whether the directors of these companies are properly incentivised to sort these matters out,” he said.
There are reports that the government may spend about £100 million to repatriate the Britons stranded abroad. Other countries and Thomas Cook officials are finding ways to return all travellers back to their homes.