TC debt was incurred not in the daily operation of an airline, nor in the shops. Their management knew the score with these. Both, at least, broke even.
What they also had was a huge borrowing from buying up, over the years, all the contributing businesses, travel and aviation. I believe that Airtours was especially expensive, likewise Condor. The focus of the Germany-based management was principally to get one up on Tui. All this money had to be paid back somehow, and with limited returns from shops and airline, it wasn't, and just ballooned.
In the USA you do Chapter 11, write off the loans, and the business continues. Didn't happen here. The fact that the loans were generally in Britain but a number of the travel operations were in Germany, Scandinavia added to it all. The "losses" quoted were after that year's repayment and interest charges on all the loans, not indicative of the trading position.