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Thomas Cook Gone

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Thomas Cook Gone

Old 23rd Sep 2019, 08:56
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It was the ill fated merger with My Travel MYT back in 2007 that was the first and by far the biggest nail in the coffin. The debt that came with MYT proved to be unsustainable and since then the management have spent far too much time and playing the equivalent of twister with the banks. But no matter how much they twisted the debt was still there. Since the merger TC has paid over one billion in fees and interest payments. That left virtually no cash for the investment required to keep up with the competition in a rapidly changing market.
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Old 23rd Sep 2019, 09:04
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Why didnít the U.K. government help ?

Why didnít the U.K. government help ?
Italian has saved many of its airlines past and present. Whatís the cost to the government now in social fees to the now unemployed ?
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Old 23rd Sep 2019, 09:07
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Originally Posted by icemanalgeria View Post
Why didnít the U.K. government help ?
Italian has saved many of its airlines past and present. Whatís the cost to the government now in social fees to the now unemployed ?
...less than the cost of keeping the business running indefinitely
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Old 23rd Sep 2019, 09:32
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Originally Posted by MarkDip View Post
It was the ill fated merger with My Travel MYT back in 2007 that was the first and by far the biggest nail in the coffin. The debt that came with MYT proved to be unsustainable and since then the management have spent far too much time and playing the equivalent of twister with the banks. But no matter how much they twisted the debt was still there. Since the merger TC has paid over one billion in fees and interest payments. That left virtually no cash for the investment required to keep up with the competition in a rapidly changing market.
My Travel had a clean balance sheet at the merger, after its own rescue from insolvency, (following a debt for equity swap which the banks then swiftly sold on at a good profit). Don't blame us oldtimers from MYT.
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Old 23rd Sep 2019, 09:32
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Thing I donít get.... British government was to stupid to fork out the last £150 million pounds(with a billion pounds already available from private parties to sort out the huge debt) and now everyone is stranded and with many job losses consequently. But in the meantime Condor is applying for a temporary loan from the German government, and is able to conduct normal business, and will probably be sold in the near future. So no repatriation needed and people can still go to work. Why the h*ll this is not happening in the UK?
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Old 23rd Sep 2019, 09:34
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Icemanalgeria. There are EU rules against governments bailing out failing businesses. Unlike our continental friends and partners, we are sticklers for the rules in Blighty.
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Old 23rd Sep 2019, 09:37
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Originally Posted by BristolScout View Post
Icemanalgeria. There are EU rules against governments bailing out failing businesses. Unlike our contine
These 'rules' do not prevent governments providing transitional support to companies, indeed MANY (?most) EU members have done so from time to time. It has been the UK govt's choice NOT to do so in many cases.

There are perfectly good political and/or economic arguments against such interventions but our politicians have fed the LIE that it is evil Europe that has prevented this and cost decent British jobs. And here we are.....
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Old 23rd Sep 2019, 09:38
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Originally Posted by A and C View Post
Itís nothing to do with Brexit but those pushing one political view or another would have you think so.
I must be the only one that didn't bother having a family holiday abroad this year because of Brexit uncertainty and piss poor exchange rates.

Mind you, even if I had, it wouldn't have been with TC due to their disgraceful corporate handling of the carbon monoxide deaths in Corfu so as you were, nothing to do with Brexit.
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Old 23rd Sep 2019, 09:46
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And why should Governments bail out businesses ? Business is business and it is often in a very hard commercial world. I didn't see the Government bail out British Eagle, Court Line, Laker, Air Europe etc, etc. As Professional pilots, we know, or should know the commercial risks of getting too loyal to a brand. TC definitely not the first and others will follow. Pick your employers carefully. Good luck to all at TC.
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Old 23rd Sep 2019, 09:46
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TCX's greatest problem was its incompetent management. It wouldn't listen to criticism, was in a permanent state of "group-think", and focused only on its individual reward. I recall being told, many years ago, by a manager now long gone, that we had nothing to fear from easyJet because "it was a totally different business model".
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Old 23rd Sep 2019, 09:48
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Jet2 are trying to cash in. Tried to book flights back from Lanzarote for next Jan as we were booked with TCX. Got all the details in and told price was circa £4700 (8 people). Went to the pay now page and they stated price had risen to £7600 due to demand. I can see many people will panic and just pay it. Fortunately TUI offered much fairer price. Condolences to all passengers and staff. Sad day.

As for Government bail outs - where would you stop? Would you expect them to bail out every business that fails? What about Jamie's food business? Or HofF or the numerous other businesses that are struggling and are on the brink?
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Old 23rd Sep 2019, 09:50
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Due to the UK still being a member of the EU, the stranded passengers will be able to get home under the EU passenger rights rules.
https://europa.eu/youreurope/citizen...r/index_en.htm
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Old 23rd Sep 2019, 09:54
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Originally Posted by anotherthing View Post
Jet2 are trying to cash in. Tried to book flights back from Lanzarote for next Jan as we were booked with TCX. Got all the details in and told price was circa £4700 (8 people). Went to the pay now page and they stated price had risen to £7600 due to demand. I can see many people will panic and just pay it. Fortunately TUI offered much fairer price. Condolences to all passengers and staff. Sad day.

As for Government bail outs - where would you stop? Would you expect them to bail out every business that fails? What about Jamie's food business? Or HofF or the numerous other businesses that are struggling and are on the brink?

Shortsightedness is something hard to overcome.

However if you can avoid paying £600 million pounds for repatriation, minimize tax revenue loss and avoid millions of benefit payouts by lending a £150 million pounds, then that makes more sense then just simply stick to capitalistic principles. Donít forget, private investors and banks had already a billion pounds in place....
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Old 23rd Sep 2019, 10:11
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Originally Posted by FR9999 View Post
Shortsightedness is something hard to overcome.

However if you can avoid paying £600 million pounds for repatriation, minimize tax revenue loss and avoid millions of benefit payouts by lending a £150 million pounds, then that makes more sense then just simply stick to capitalistic principles. Donít forget, private investors and banks had already a billion pounds in place....
One might equally ask if private investors and banks had already a billion pounds in place, why was an extra £150 million too much for them?
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Old 23rd Sep 2019, 10:26
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Originally Posted by FR9999 View Post



Shortsightedness is something hard to overcome.

However if you can avoid paying £600 million pounds for repatriation, minimize tax revenue loss and avoid millions of benefit payouts by lending a £150 million pounds, then that makes more sense then just simply stick to capitalistic principles. Donít forget, private investors and banks had already a billion pounds in place....
FR9999

there is a saying in business Ďthe first loss is the best lossí

£600M to repatriate etc versus £150M to bolster. TCX have posted a first half year loss of over £1Bn. So HMG throws in £150M to cover.

what happens next time? Throw in more money? Keep throwing in money, good after bad?

where does HMG stop? Which businesses should it bail out and which shouldnít they? The banks are a different proposition. An airline/holiday company, although sad for individuals involved, is not an essential fabric of the economy, especially whenJet2 etc are there to mop up, which they will.

TCX is a failed business. It is sad, but it is a fact. Plenty other businesses are managing despite ĎBrexití which some people in here are laying the blame at the feet of.

HMG is right not to take a financial interest in. As to what other European countries do, that is there business. Europe is not, despite best intentions, a level playing field
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Old 23rd Sep 2019, 10:32
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Originally Posted by Claude1 View Post
So are there any companies that might snap up some of the aircraft and pilots?
Flybe are reaching out...


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Old 23rd Sep 2019, 11:24
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I believe I am correct in saying that the administrator can agree to pay off outstanding airport charges, including landing fees, if there is insufficient capacity, in order to free up TC aircraft to be used for repatriation purposes.
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Old 23rd Sep 2019, 11:33
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Originally Posted by parabellum View Post
I believe I am correct in saying that the administrator can agree to pay off outstanding airport charges, including landing fees, if there is insufficient capacity, in order to free up TC aircraft to be used for repatriation purposes.
Yes but hasnít TCXís AOC been stopped? So the aircraft (and crew to operate them) would need to be put on another operators AOC?
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Old 23rd Sep 2019, 12:24
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Originally Posted by parabellum View Post
I believe I am correct in saying that the administrator can agree to pay off outstanding airport charges, including landing fees, if there is insufficient capacity, in order to free up TC aircraft to be used for repatriation purposes.
Where do we think the administrator is going to get the money from ? There are going to be a lot of unpaid bills around. It will take them until probably past the repatriation period to understand all the accounts and the legal implications of what they find.

If the carrier has ceased trading there is nobody with their name on the line to take responsibility. The insurers will have suspended cover on everything. The aircraft are likely to be seized by bailiffs for the first who gets to them who is owed significant sums. You can't work like that.

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Old 23rd Sep 2019, 13:03
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It's all very simple really.

Thomas Cook had £1.7 billion of debt owed to the banks. That's over £26 of debt for every man, woman and child in the whole of the UK.

A look at its last published accounts for y/e 30/9/18 (a year ago) showed;
  • £4.2 billion current liabilities
  • £2.1 billion in non-current liabilities
  • £6.3 billion total liabilities (the previous two added together)
  • Net assets of just £291 million
  • Accumulated losses of £1.965 billion.
(Source: Thomas Gook Group Annual Report and Accounts 2018)

What it must have been like 12 months later I can't begin to imagine.

Bankruptcy was inevitable when the cashflow could no longer cover interest payments and the costs of running the business at the end of the summer holiday period when TC should have been making money hand over fist.

Why is anyone surprised? Blaming BREXIT for this is a joke. A very bad joke. Three things caused this; debt, debt and debt. Period.
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