THE demise of 178-year old
British tour operator, Thomas
Cook, has sent shockwaves
through the global travel
industry.
Pioneers of the “package
holiday”, The Thomas
Cook Group, entered into
compulsory liquidation last
week (September 23) after
the company failed to secure
funding at the eleventh hour,
leaving 600 000 holiday
makers stranded around the
world and the UK government
to carry out what is said to
be the biggest peacetime
repatriation since World War II.
So where did it all go wrong?
TNW spoke to an anonymous
UK-based industry expert, who
said that the collapse was
caused by a host of issues.
He said that while macro
factors such as Brexit (and
the combination of the falling
pound against the euro) and
fierce competition against lowcost airlines like easyJet and
Norwegian (which impacted
the group’s airline business)
had been felt, other factors
had played a part. The bad
purchases from years ago of
companies such as My Travel
and Going Places, the resulting
ownership of brick-and-mortar
shops when everyone else was
looking to reduce retail space,
and the £1,7 bn (R31,7 bn)
of debt that the company
needed to service, combined
to create a perfect storm.
Travel Vision’s David
Bradshaw – who worked for
Thomas Cook for 24 years
in the UK, South Africa and
Zimbabwe – says that the
while the collapse had been
on the cards for a while,
due to the company’s welldocumented struggle against
the weight of billions of
pounds of debt, it is a terribly
sad occasion.
David speculates that
cannibalisation had also
been a factor in the brand’s
demise, explaining that
Thomas Cook’s many buyouts and mergers over the
last few years had resulted in
some small UK towns having
up to three high street retail
branches, operating under
different brands but owned by
the group. He adds that the
multi-million bonuses paid to
directors, while the company
was so beleaguered with
debt, had been irresponsible.
Rennies Travel’s Jose Cruz,
who worked for Thomas Cook
Rennies Travel before the
company pulled out of South
Africa in the eighties, says
the lesson to learn from this
incident is that even a household brand name with 178
years of experience is not
immune to financial collapse
in the current environment.
He warns industry members
to stay vigilant.
Impact on SA
The closure of Thomas
Cook has not had much of
an impact on South African
travellers, as the group did
not operate in South Africa.
However, Thomas Cook UK
flights have been removed
from the GSA’s (Aviaireps)
system.
Subsidiary, Condor Airlines,
will continue to operate as
usual. The airline issued
a statement stating that it
had the financial means to
continue flight operations
and to pay for the services it
needed, says Aviareps gm for
Southern Africa, Charmaine
Thome. Condor has received
a guarantee for a EUR380
million (R7 billion) six-month
bridging loan from the
German and Hessian State
Governments. However, the
deal must still be approved
by the European Commission
before it is confirmed.
Condor Airlines operates
a seasonal service between
Cape Town and Frankfurt
between September and
April and is still planning to
increase its service from a
schedule of three per week
to four, effective October 28.
Thomas Cook UK
Airlines was scheduled to
recommence its seasonal
Cape Town to London
Gatwick service in December,
however with the airline no
longer operational, those
flights appear to be off the
table. “The refund process
for these flights is handled
by the Civil Aviation Authority
in the UK. Should the trade
need support they are
welcome to contact Aviareps
for assistance,” says
Charmaine
