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Thomas Cook-2

Old 17th Sep 2019, 17:36
  #661 (permalink)  
 
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Originally Posted by pholling View Post
Keep in mind TCX have a larger percentage of non package holiday bookings when compared to Monarch, what that number is and whether it is enough I have no clue.
Could you please provide some proof of this? Monarch was predominantly a scheduled carrier and only a small percentage of our trade was package holiday bookings.
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Old 17th Sep 2019, 17:46
  #662 (permalink)  
 
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Originally Posted by CEJM View Post


Could you please provide some proof of this? Monarch was predominantly a scheduled carrier and only a small percentage of our trade was package holiday bookings.
Schedule vs charter doesn’t necessarily make the determination. It all depends on where the money is coming from and whether or not there is enough coming in plus reserves to pay the bills. I was making the Monarch inference from the statement the company released at the time. I am very happy to be corrected on this. It could also have been the corporate structure that forced the airline into admin. Insolvency law is a complicated space and in some cases mutual credit webs will drag multiple companies down. What isn’t disputed is that if an airline in the UK calls in the administrators they must cease trading.

Note: if the restructure goes through TCX will truly be separate from the rest of the group. In this case a failure of one wouldn’t guarantee a failure of the other. However, at least in the near term it would probably be likely.
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Old 17th Sep 2019, 17:51
  #663 (permalink)  
 
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The issue at play here is the cut and dry nature of doing business, and the brutal way in which regulation works. One thing is for sure, the wishful thinking that the UK Government would step in and bailout/nationalise the company, is exactly that - wishful thinking. The government would not go anywhere near it. It would certainly get very messy with respect of EU state funding rules if it even attempted such a move.

I'm inclined to also think that Monarch was more non-package direct ticket sales operation than a package operation at the end, and that Thomas Cook remains predominantly package holiday-filled flights, be that for a week at the beach or their sports and cruise arms.

All the points that rog747 made are entirely accurate in this instance. In business and in regulation, there is no time for sentiment and certainly no respect for heritage. If you don't have the dosh, you're finished. Simple as that.
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Old 17th Sep 2019, 17:56
  #664 (permalink)  
 
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Originally Posted by pholling View Post


Schedule vs charter doesn’t necessarily make the determination. It all depends on where the money is coming from and whether or not there is enough coming in plus reserves to pay the bills. I was making the Monarch inference from the statement the company released at the time. I am very happy to be corrected on this. It could also have been the corporate structure that forced the airline into admin. Insolvency law is a complicated space and in some cases mutual credit webs will drag multiple companies down. What isn’t disputed is that if an airline in the UK calls in the administrators they must cease trading.

Note: if the restructure goes through TCX will truly be separate from the rest of the group. In this case a failure of one wouldn’t guarantee a failure of the other. However, at least in the near term it would probably be likely.

Thanks Pholling, that is fair enough. Regarding the Monarch statement you are wrong but to be honest that is in the past anyway. We can only hope that the same doesn’t happen to the Thomas Cook employees!
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Old 17th Sep 2019, 17:59
  #665 (permalink)  
 
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Originally Posted by pholling View Post
What isn’t disputed is that if an airline in the UK calls in the administrators they must cease trading.
It's not necessarily correct, but is almost always the case. There have been airlines in the UK operating under the remit of administrators whilst trying to flog the operations as a going concern. Duo out of Birmingham is one that springs to mind that limped on for about a week under administration before the dosh ran out completely. AB Airlines also limped on for a short while whilst in administration in 1999 before its last remaining (valuable) assets were flogged to British Airways.

Any administrator worth their salt will want to get best value for the asset, and there is more value in an operating asset than there is in a closed one.

Where ceasing trading comes in, is when there is simply no money in the pot to pay creditors, and they start withdrawing their services and/or labour. For an airline, this is devastating because, as a brutal example, if you don't pay for your refuelling on arrival in Palma de Mallorca for your packed charter back to East Midlands, the folks on the ground in Palma are not going to let your aircraft leave.......... now we're off to the races.

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Old 17th Sep 2019, 18:03
  #666 (permalink)  
 
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Originally Posted by pholling View Post


To some extent that would depend on the rules in each of the other jurisdictions regarding AOCs and insolvency. However, if the AOC of the UK airline is suspended they will have to immediately sell their slots or lose them. This means they could not easily return to the same operations in the UK once they regained their AOC. Further, last minute transfers of ownership to other airlines in the group would probably be “frowned upon”.
Not sure any of that is true.
Aircraft and staff are transferred between the group AOCs with relative ease throughout the year. Also AOCs and slots have very little to do with ownership.
Thomas Cook has been using BA slots at LGW all year, and Condor used Thomas Cook slots at Gatwick and Manchester last year.

Whatever happens, if a pre pack is deemed the best way to go, bigger legal brains than mine will be bought to bear on the issue.
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Old 17th Sep 2019, 20:53
  #667 (permalink)  
 
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It cannot be great if you’re a TCX employee but I do think, despite all of the doom and gloom surrounding TCX, that they will likely scrape through this by the skin of their teeth.

IMHO the media coverage, some of it people may see as scaremonging, has been the nail in the coffin for TCX. Are consumers likely to start putting faith back into TCX if they do pull through? I’m not so sure. The publicity surrounding the whole situation cannot be helping the already awful looking financial predicament.

For any crew on here, let’s hope for the best.
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Old 17th Sep 2019, 21:06
  #668 (permalink)  
 
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It's quite clear that the company isn't going down without a fight, having today filed for bankruptcy protection in the US against possible foreclosure from US creditors.

It also goes to show just how precarious the situation really is. The company now requires protection from the courts to continue operating in the short term.

Source: Bloomberg
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Old 17th Sep 2019, 21:51
  #669 (permalink)  
 
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Originally Posted by Doc Q View Post



TC are a lot bigger than Monarch were , The CAA won’t let them go under to many jobs at stake .
The Chinese are going to inject a lot of cash into the company next week , crisis over nothing to see so move along now
You're wrong to assume the CAA is just a giant bank that's there to keep large airlines aloft. I'm afraid that isn't in their remit. They will obviously be disappointed if the airline collapsed and people lose jobs but it isn't their job to look after failing companies, but to be a safety regulator and to protect the consumer.
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Old 18th Sep 2019, 02:26
  #670 (permalink)  
 
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The Credit Derivatives Determinations Committee will meet at midday UK time (BST) on Thursday 19 September to decide whether filing for Chapter 15 bankruptcy in the USA has triggered a credit event and thus whether credit default swap protection has been invoked
To those not familiar with the credit default swaps, this will all sound tediously dull, but the outcome of this meeting may have a significant impact on the long term survival of Thomas Cook
https://www.cdsdeterminationscommitt...ook-group-plc/
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Old 18th Sep 2019, 08:32
  #671 (permalink)  
 
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https://www.telegraph.co.uk/business...sday-scenario/
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Old 18th Sep 2019, 09:25
  #672 (permalink)  
 
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Originally Posted by Jonty View Post


Not sure any of that is true.
Aircraft and staff are transferred between the group AOCs with relative ease throughout the year. Also AOCs and slots have very little to do with ownership.
Thomas Cook has been using BA slots at LGW all year, and Condor used Thomas Cook slots at Gatwick and Manchester last year.

Whatever happens, if a pre pack is deemed the best way to go, bigger legal brains than mine will be bought to bear on the issue.
It is generally fine to move aircraft, slots etc around. Provided that any financing terms don't prohibit their transfer. However, if a company deliberately moves assets form one place to another right before declaring that they are insolvent, solely for the purposes of "protecting" them from creditors, courts often take a dim view. This would be doubly true for secured assets.

Last edited by pholling; 18th Sep 2019 at 09:49. Reason: corrected a misspelling
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Old 18th Sep 2019, 09:48
  #673 (permalink)  
 
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Originally Posted by CEJM View Post



Thanks Pholling, that is fair enough. Regarding the Monarch statement you are wrong but to be honest that is in the past anyway. We can only hope that the same doesn’t happen to the Thomas Cook employees!
I do stand corrected, thank you. At the time of the insolvency only about 20% of Monarchs passengers were ATOL protected. I don't know what TC's ratios are. Incidentally, the collapse of Monarch triggered a big review of Airline Insolvency in the UK. One of the basic outcomes is that while it isn't strictly necessary to suspend the OL and AOC for an insolvent airline it is the default, especially if the CAA was not involved in the process leading up to insolvency. The review recommended the a 'special administration regime' be setup to better manage airline insolvency. This would allow a gradual wind down of operations.

https://www.gov.uk/government/public...w-final-report
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Old 18th Sep 2019, 10:46
  #674 (permalink)  
 
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Not sure I would listen to that guy, Thomas cook indicated in court papers at the end of August that it would be filing for chapter 15 protection in the US.

It it was a standard part of the proceedings.
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Old 18th Sep 2019, 10:58
  #675 (permalink)  
 
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Originally Posted by Jonty View Post


Not sure I would listen to that guy, Thomas cook indicated in court papers at the end of August that it would be filing for chapter 15 protection in the US.

It it was a standard part of the proceedings.
Filing for bankruptcy protection is by no means a standard part of proceedings. The whole purpose of the filing in the US courts is to stop Thomas Cook's creditors over there from grounding its planes or turning its paying customers away from hotels that haven't been paid. It also stops the bondholders from calling in their positions.

It is only done by a company that is in not only dire straits, but simply does not have the cash on hand right at that moment of filing. It buys Thomas Cook a few days of continuing liquidity at best, but should such a filing be on the cards in Europe, its straight to the administrators without passing go or collecting 200.
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Old 18th Sep 2019, 11:12
  #676 (permalink)  
 
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Originally Posted by diffident View Post
Filing for bankruptcy protection is by no means a standard part of proceedings. The whole purpose of the filing in the US courts is to stop Thomas Cook's creditors over there from grounding its planes or turning its paying customers away from hotels that haven't been paid. It also stops the bondholders from calling in their positions.

It is only done by a company that is in not only dire straits, but simply does not have the cash on hand right at that moment of filing. It buys Thomas Cook a few days of continuing liquidity at best, but should such a filing be on the cards in Europe, its straight to the administrators without passing go or collecting 200.
If you read the 500+ page Explanatory Statement In Relation To Schemes Of Arrangement filing as to the timescales and process to be followed, it is always stated that this Chapter 15 filing would be done on the 16th
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Old 18th Sep 2019, 11:42
  #677 (permalink)  
 
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Originally Posted by NormanDLandings View Post


If you read the 500+ page Explanatory Statement In Relation To Schemes Of Arrangement filing as to the timescales and process to be followed, it is always stated that this Chapter 15 filing would be done on the 16th
That as it may be, and if it is the case that yesterday's (17th) filing in New York is as part of that, investors will have a fair complaint against the company. Something I'm sure will be at the forefront of tomorrow's CDDC meeting.

I can't see it being favourable for Thomas Cook at that meeting. The Chapter 15 effectively blocks some of the bondholders from derailing the sale or re-organisation of the company by paying them out on the basis of the company being in default, thus triggering the CDDC meeting.

If the CDDC meeting gives a damning verdict on the company's position and liquidity (which it almost certainly will), it will turn out to be a very tough end of the week for the company on the European markets - if its shares aren't suspended from trading by then.
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Old 18th Sep 2019, 11:47
  #678 (permalink)  
 
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Perhaps a more informed article diffident....
https://www.ft.com/content/c495f92e-...b-77216ebe1f17
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Old 18th Sep 2019, 12:05
  #679 (permalink)  
 
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Originally Posted by 763 jock View Post
Perhaps a more informed article diffident....
https://www.ft.com/content/c495f92e-...b-77216ebe1f17
I saw that article yesterday.

It says broadly exactly what I have said, but in a shall we say, more succinct way. The outcome is the same, the CDDC will make a ruling which will have a profound effect on the company.

If the CDDC determine the company to be insolvent, then that's that. If the CDDC determines the company to be solvent and have liquidity, the hedge funds will kick up a stink at the creditor meetings at the end of the month.

Either way, and I'm in the camp that surely something can be done somewhere to rescue the company, it doesn't look great for Thomas Cook's future when it appears the bondholders and the hedge funds have seemingly made their minds up.
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Old 18th Sep 2019, 12:36
  #680 (permalink)  
 
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Originally Posted by diffident View Post
Filing for bankruptcy protection is by no means a standard part of proceedings. The whole purpose of the filing in the US courts is to stop Thomas Cook's creditors over there from grounding its planes or turning its paying customers away from hotels that haven't been paid. It also stops the bondholders from calling in their positions.

It is only done by a company that is in not only dire straits, but simply does not have the cash on hand right at that moment of filing. It buys Thomas Cook a few days of continuing liquidity at best, but should such a filing be on the cards in Europe, its straight to the administrators without passing go or collecting 200.
Are you sure your not confusing this with Chapter 11 bankruptcy protection?

All Chapter 15 does is say that this company is being restructured under different law in a different country and it protects Thomas cook from legal action in the US, saying all US investors have to take legal action in the UK. It defines the jurisdiction applicable to the restructuring. It’s got nothing to do with people being turned away at check in.

https://www.uscourts.gov/services-fo...kruptcy-basics
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