Originally Posted by
diffident
To further add to
Albert Hall 's well made points there
Doc Q , even if the Government wanted to (and they don't), European Union state aid rules won't allow it. In an effort to stop the usual "yeh, buts" that I normally get when discussing businesses going bust and European state aid rules, the biggest question is - what about the banks?
State aid rules state explicitly: "A government can own a company under state aid rules but it is not allowed to keep it going if it would otherwise fail." In other words, the Government can't just go around buying up bankrupt businesses in the national interest. Thomas Cook has been in trouble for some time, some say possibly as far back as the MyTravel tie-up.
The banks were bailed out because the business models were proven solid (the banks were expected to rapidly return to profitability - and did), but had become under substantial strain due to market volatility. The same banks are back to returning billions in profit for shareholders today with little in the way of change regarding how banks operate, other than the rules surrounding protecting retail banking from investment banking.
Thomas Cook is not in trouble because of external forces. It is about to become the victim of poor business management.
Apologies diffident, but this sounds nonsense (comment in bold). The banks are not comparable to airlines. The government cannot allow them to fail, they provide state guarantees which is necessary to give people confidence to save and making their savings secure etc etc. The point is highly irrelevant. And suggestions on here that £200M is not much money is nonsense. This is exactly like Monarch. Very sad news, but the cat is out of the bag, at a time when they need cashflow and liquidity, clients will avoid booking or spending with them.
If you were investing into Thomas Cook you'd have to ask where do they add value and what's their point of difference?? As far as I can see Jet2 has wiped their eye and they no longer seem relevant.