Unions are calling for the government to step in and prevent a collapse of Thomas Cook at the same time as reports suggest the Department for Transport is working on a contingency plan to repatriate up to 150,000 passengers who might be stranded if it goes under.
The TSSA, which represents many of Thomas Cook’s 9000 UK-based workers, said the government must intervene to save the tour operator.
Thomas Cook is continuing to trade normally while trying to hammer out a refinancing package with its largest shareholder, Chinese travel group Fosun, and its existing lenders.
However, if the UK’s third largest tour operator were to fail, TSSA warned that not only will it lead to a loss of 9000 jobs and thousands of stranded holidaymakers, but it could also lead to higher holiday prices because it will leave the UK with only one major travel firm, TUI.
General secretary Manuel Cortes said “Our members are going through a time of great stress and worry over their futures. We will, of course, do all we can to help – but what’s needed now is clarity about the future of the company.
“Thomas Cook must be rescued no matter what. This is not just about the threat of losing jobs and an iconic brand from our high streets but the fact that if Thomas Cook goes under, we will be left with just one major travel operator – TUI – controlling the mass market.
“That would be in no-one’s interests – a lack of competition will always lead to a hike in prices. If need be the government must step in to ensure Thomas Cook’s survival.”
However, the government is understood to be making contingency plans to repatriate some 150,000 holidaymakers if Thomas Cook fails in the next few days.
While those on package holidays will be protected by the company’s ATOL, Thomas Cook flight-only customers face the prospect of paying again for new flights home if Thomas Cook Airlines is grounded.
While many of these flight-only customers will be able to claim refunds from their credit card issuer or insurance policy for their original flight, they might have to pay significantly more for replacement flights.
However, the government is understood to be working on a contingency plan, codenamed Operation Matterhorn, which will see it scramble unused aircraft to repatriate customers. It is not clear, however, whether this will include repatriating flight-only customers who aren’t covered by the CAA’s ATOL scheme, or whether they would have to pay again for flights.
The government took similar action, with the Civil Aviation Authority’s assistance, following the collapse of Monarch almost exactly two years ago. It brought back all Monarch clients, including those without ATOL protection.
It chartered 567 flights from British Airways to bring 110,000 customers home, at an estimated cost of £60 million to the UK taxpayer. While it tried to recover some of this cost from tour operators who had bought seats on Monarch, it is understood it didn’t receive refunds of the taxpapers’ money spent.
Many in the industry were furious at the government’s intervention following Monarch’s collapse, with some saying the government wasted money needlessly chartering BA flights while Monarch’s own aircraft were grounded, and others said it was wrong of the government to protect clients who had bought unprotected flights as this eroded the value of booking packages with an ATOL operator.
At the time, AITO chairman Derek Moore said the travel industry was ‘disgusted’ at the government’s decision to fly passengers home for free and then ask travel companies to stump up £250 a head towards the cost.
The Department for Transport and the CAA have refused to comment on the possible contingency plans in the event of a Thomas Cook collapse.
Thomas Cook issued a statement this morning confirming that it needs an additional £200 million loan facility to secure a £900 million refinancing package. It has previously stated that time is running out for it to secure a deal.