Originally Posted by
davidjohnson6
The share price has fallen 94 % in the last 12 months. The entire company (travel agencies, airlines, etc) is now worth less than the list price of a single A321.
Update - The Times reports that the CAA is making contingency plans for the possible collapse of Thomas Cook. While the airline can legally operate independently of the travel agency and thus the airline has no formal need of an ATOL, the lack of an ATOL would force the UK travel agency business into closure and mean a significant decline in the number of pax for the airline - airline ops would likely be deeply loss making without the revenue from the ATOL-based travel agency. The ATOL is reported to be due to expire on Tuesday 01 October - not sure if that's Tuesday morning or Tuesday evening. Talks have reportedly been held with Alix Partners about a possible bankruptcy
This is the time of year when leisure-based travel agencies and airlines find cashflow becoming very tough - summer has positive cashflow, but the period from October to April does not
I really hope that Thomas Cook pull through - it is very sad to see such a proud name going through such problems
Disclaimer - I have a flight booked on my debit card with Thomas Cook,so if they go bust I lose out financially
Some of the 'legality' will depend on how the corporate structure exists as of now. In some structures it is possible that the main group could call in the administrators and the airline could continue on. In other cases the airline would be under administration. Further, depending on the terms of the loans specific to the airline the collapse of the rest of TC group would leave TCX as a creditor to TC overall. The result is the airline could quickly become insolvent. In which case they would have to call in the administrators. The challenge is under CAA rules administrators are not 'fit and proper' so the AOC is immediately suspended. In which case a quick sale of the airline to a well funded backer might be the only option. Note: I am not speculating on what the actual situation or likely outcome are, just that Administration of the holiday arm of TC can quickly prove fatal to TCX.