Hundreds of thousands of holidaymakers could find themselves stranded abroad as customers of Thomas Cook face a nervous wait to learn whether the 178-year-old travel agency is going to go bust.

Many have taken to social media to voice their fears with one writing: ‘Flying with Thomas Cook on Sunday and potentially sounds like I won’t be coming back.’ 

The firm has been struggling for years to finance its £1.6billion debt mountain and its problems have been exacerbated by the UK heatwave two years ago and contracting consumer spending due to Brexit fears, while new online competitors crowd out the sector.

The firm is seeking £200million in funding as it attempts to avoid going under, but some insiders said it could fold as early as Sunday. Administrators have already been lined up. 

Collapse would leave 180,000 customers stranded abroad and necessitate the largest British peacetime repatriation in history – for which the DfT is already preparing contingency plans.  

Customers queuing at Thomas Cook check-in desks at Gatwick this morning were unsure whether the company would still be trading when the time comes to fly them home

Customers queuing at Thomas Cook check-in desks at Gatwick this morning were unsure whether the company would still be trading when the time comes to fly them home

Fearful holidaymakers took to social media in droves demanding answers this morning, with many accusing the travel giant of failing to keep them informed

Fearful holidaymakers took to social media in droves demanding answers this morning, with many accusing the travel giant of failing to keep them informed

Haris Khan, 7, (right), went in to school in tears today his father Amraaz (left) said, after he learned their Thomas Cook holiday in Turkey, for which he has been saving up his pocket money for months, could be cancelled if the company goes bust

Haris Khan, 7, (right), went in to school in tears today his father Amraaz (left) said, after he learned their Thomas Cook holiday in Turkey, for which he has been saving up his pocket money for months, could be cancelled if the company goes bust

Repatriation plans: How would 180,000 stranded holiday- makers get home?

If Thomas Cook does go bust nearly 200,000 people will find themselves abroad with no company to fly them home, which would require the biggest peacetime repatriation of stranded Britons in history.

The DfT refuses to comment on its contingency plans, understood to be codenamed Operation Matterhorn, to get them home.

But in 2017 when Monarch Airlines went under on October 2 the government launched a massive repatriation effort – to date, the biggest ever.

The Civil Aviation Authority operation saw more than 60 aircraft chartered from 27 airlines including EasyJet and Qatar Airlines, to bring back 84,000 stranded passengers.

The rescue operation covered flights to six UK airports from more than 30 destinations in 14 countries across the Mediterranean and beyond, including Spain, Portugal, Greece, Italy, Sweden and Israel. 

The operation flew more than 1.5 million miles and took two weeks.

Astonishingly 98 per cent of passengers came home on the day they’d booked to return with Monarch

The last of the 570 fights saw 122 passengers brought home from Tel Aviv to Luton Airport on October 16. 

The operation cost the UK government £40m and in 2018 the government commissioned a special review led by former rail regulator Peter Bucks to come up with a plan to prevent the government footing a future bill.

It reported in May 2019 and proposed an increase in the Atol levy on flights which goes into a pot to cover the costs of such operations if they become necessary.

But the Mail understands the Atol fund does not currently contain enough money to deal with a Thomas Cook-scale repatriation should it become necessary – and the DfT will be left using taxpayer money to get people home.

There are more than twice the number of Thomas Cook holidaymakers currently overseas than there were Monarch passengers in 2017. 

Customers today took to social media to demand confirmation their holidays would go ahead and some pleaded with the company not to go bust because they have vouchers worth hundreds of pounds which would become worthless. 

One customer said he was ‘nervously awaiting news of Thomas Cook’s fate’ and another said: ‘Less than two weeks before I go on holiday and I hear that Thomas Cook may be going bust. No no I give up!!!!!’ 

Amraaz Khan, 34, told MailOnline his son Haris, seven, went in to school in tears today after he learned their holiday in Turkey, for which he has been saving up his pocket money for months, could be cancelled.

Amraaz and his wife and two sons have saved up £1,400 for a week in Turkey to celebrate his birthday next week.

He said: ‘I’m upset, I’m angry, and I’m hurt.

‘I’ve trusted Thomas Cook and saved up all my money to go on a family holiday.

‘It’s hard to earn that £1400 and my seven-year-old was crying this morning – he’s been saving his pocket money for months.

‘Thomas Cook texted me just on Friday to say “have a good holiday” and remind me to get an e-visa.

‘I’ve spent all that money, I’ve done the shopping, bought things for my kids, bought my visas, and then last night I heard Thomas Cook are in all this trouble.’ 

Shares in the company dropped by 20 per cent when markets opened this morning following news of its possible collapse, although they have since largely rebounded.

The demise of one of the world’s oldest travel companies would mean huge job losses – the company still has 550 high street stores and employs 22,000 staff.

Collapse would also leave the taxpayer facing a massive bill of around £600million to bring stranded customers home because the Atol scheme funded by a levy on holidaymakers does not have enough in the pot to cover a collapse and repatriation of this size.

The Mail can reveal that Whitehall officials have already drawn up plans for what would be Britain’s biggest peacetime repatriation.

Known as Operation Matterhorn, it has been put together by the Department for Transport and the Civil Aviation Authority.

Senior sources suggested it could take up to two weeks to bring all Thomas Cook customers home if the company goes under.

The company said it is in talks with stakeholders, including leading shareholder Chinese firm Fosun, to bridge the funding gap to stave off entering administration.

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In an update to the market, it said the fundraiser is expected to significantly dilute existing shareholders’ stakes in the firm, with ‘significant risk of no recovery’.

In a statement today, Thomas Cook said: ‘Discussions to agree final terms on the recapitalisation and reorganisation of the company are continuing between the company and a range of stakeholders.

‘These discussions include a recent request for a seasonal standby facility of 200 million pounds, on top of the previously announced 900 million pounds injection of new capital.’

Hundreds of thousands of holidaymakers are facing an anxious wait today as the British travel agent Thomas Cook was on the brink of collapse (stock image)

Hundreds of thousands of holidaymakers are facing an anxious wait today as the British travel agent Thomas Cook was on the brink of collapse (stock image) 

Shares in the company dropped by 20 per cent at the start of the day's trading following news of its possible collapse but rebounded soon after and have stayed stable through the day

Shares in the company dropped by 20 per cent at the start of the day’s trading following news of its possible collapse but rebounded soon after and have stayed stable through the day

Were the company to go under, an estimated 180,000 people could be stranded abroad, while the firm employs 22,000 staff around the world, including 9,000 in the UK.

Thomas Cook said the £200million needed would be a ‘seasonal standby facility’, on top of £900million it had already raised from Fosun and its lenders.

The travel firm has suffered recently as a result of mounting debts, reporting a £1.2 billion net debt in its half-year results in May.

It has also been hit hard by an influx of online competitors which has resulted in oversupply, forcing tour operators to cut prices.

Q&A: The future of Thomas Cook 

Why is Thomas Cook in such a state?

Bosses have blamed Brexit uncertainty but the reality is it has become saddled with a £1.6 billion debt mountain after years of mismanagement and over-expansion. In July, the firm announced it had struck a rescue deal led by its biggest shareholder, Chinese conglomerate Fosun International, as well as its banks. Together they agreed to stump up £750 million to save it from bankruptcy. This emergency injection was topped up by another £150 million from other key backers including hedge funds, to see it through the winter.

Isn’t that enough to keep it afloat?

Thomas Cook’s lenders, led by Royal Bank of Scotland and Lloyds, are demanding another £200 million or they will pull the plug on the deal. The banks have already handed Thomas Cook a £675 million overdraft and are running out of patience. They fear the firm still does not have enough cash to tide it over during the off-peak season, including to pay suppliers and hoteliers. This has resulted in a stand-off, with Fosun and Thomas Cook’s hedge fund backers refusing to pay up, and the banks unwilling to budge.

Why can’t they just bide their time?

Thomas Cook bosses fear they will have to call in the administrators within days if neither side agrees to stump up the funding. It is a criminal offence to continue trading – and to take holiday bookings – when insolvent. Another reason the crisis is coming to a head is Thomas Cook’s Atol licence is up for renewal on October 1. Every company is required to hold an Air Travel Organiser’s Licence issued by the Civil Aviation Authority. Travel companies also have to put down deposits for hotel bookings for the following summer by October 1 – another reason why Thomas Cook’s position is so precarious.

What does this all mean for customers?

If Thomas Cook collapses imminently, about 180,000 customers will be abroad. Those who have booked a package holiday should be protected by the Atol scheme. This means they will be entitled to continue their holiday and fly home with another airline. But many face the prospect of being stranded for some time, as there may not be enough space on flights. Whitehall officials are preparing for the emergency repatriation of tens of thousands of holidaymakers. But it could take up to two weeks to bring everyone home.

And those who have future bookings?

Hundreds of thousands of people who have booked holidays could also see their trips cancelled. If they have Atol protection, they are entitled to a refund or alternative holiday. Those who booked flights only should be able to claim a refund if they used a credit card and it cost more than £100. 

Thomas Cook has been struggling under the weight of £1.6billion of debt and tumbling profits. Debt-fuelled expansion and a series of poor bets on where Britons would want to travel and how many people would book flights has left its finances in crisis.

The company is locked in desperate negotiations with its lenders, Royal Bank of Scotland and Lloyds Bank, over a salvage deal. 

In July, bosses announced they were hammering out a rescue deal with Chinese company Fosun, Thomas Cook’s largest shareholder, and a group of hedge funds which owned its bonds.

But a group of banks who lend to Thomas Cook, including RBS, are apparently threatening to scupper the rescue deal. 

They are demanding an extra £200 million be pumped into the rescue package, sources close to Thomas Cook said.

Unless RBS backs down, Thomas Cook’s board will have to call in administrators within days.

This could happen as early as Sunday, the Mail understands, and the company has lined up administrators from Alix Partners to step in. 

Last night, reports of the company’s troubles saw Thomas Cook bombarded by messages on social media from customers worried about their holiday plans.

Gavin Wilson wrote on Twitter: ‘What are the chances of my return flights to Vegas next month going ahead?

‘Are Thomas Cook gonna be saved or are they about to go under?’

On its Twitter site, Thomas Cook assured holidaymakers that it would be around ‘for many years’.

But an industry source said last night: ‘Unless the management team can point to a viable transaction soon, they have a clear legal duty to cease trading.

‘To put it bluntly, they’re running out of options.’

If Thomas Cook does fail, the taxpayer will be left with a huge bill.

It would cost about £600million to bring home the 180,000 Thomas Cook customers who would be abroad if the company collapsed early next week, industry experts estimate. 

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Thomas Cook package holidays are protected by the Atol scheme, which means customers are supposed to be brought home free of personal cost and refunded for any holidays which don’t go ahead.

However, customers who bought only flights through Thomas Cook would not be protected under the scheme.  

And at the moment, the scheme – which is funded by the travel companies via a levy on travellers – contains only £18 million and is not big enough to cover the costs of a Thomas Cook collapse.

The Mail understands this would leave the Department for Transport having to scratch around for the remainder.

Thomas Cook attempted to play down talk of holidaymakers losing their trips abroad, with some told there was 'no need to be worried' (shown above)

Thomas Cook attempted to play down talk of holidaymakers losing their trips abroad, with some told there was ‘no need to be worried’ (shown above)

A couple look at holiday offers in the window of a Thomas Cook branch in Redcar. Tens of thousands of customers could be left stranded abroad if the firm goes bust

A couple look at holiday offers in the window of a Thomas Cook branch in Redcar. Tens of thousands of customers could be left stranded abroad if the firm goes bust 

Last night, RBS denied that it was responsible for putting pressure on the deal. A spokesman said: ‘We don’t recognise this characterisation of events. 

‘As one of a number of lenders, RBS has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook.’

Can you help provide information about this story?

If you have information about the financial position of Thomas Cook, or have been notified by Thomas Cook your holiday has been cancelled, and you wish to discuss your story with a reporter for inclusion in our coverage  please contact MailOnline by calling 0203 615 4959 or emailing joel.adams@mailonline.co.uk

The failure of Thomas Cook would be a huge blow to Britain’s travel industry.

It served 22 million customers last year, operates more than 550 high street stores and employs 22,000 staff. If the rescue deal does go ahead, Thomas Cook will split into two parts – an airline business and a tour operator.

Most of it will fall into the hands of the Chinese, as Fosun – which already owns Wolves FC – will invest £450 million.

Guy Anker, of the Moneysavingexpert consumer website, said: ‘This is extremely worrying news for hundreds of thousands of people who have booked holidays with Thomas Cook, particularly those who are abroad already.’

A Department for Transport spokesman said: ‘We do not speculate on the financial situation of individual businesses.’   

A centenary event for 'Cook's first Swiss tour' is held in London in 1963. The 178-year-old company is now at risk of going into administration

A centenary event for ‘Cook’s first Swiss tour’ is held in London in 1963. The 178-year-old company is now at risk of going into administration 

How years of mismanagement saw Thomas Cook build up £1.6bn debt which left them needing to sell 300 MILLION holidays a year to break even

As the travel industry evolved worldwide and online start-ups sprang up challenging existing providers, Thomas Cook ploughed on with a high street business model which became less and less sustainable.

By 2012 the company had been mismanaged so badly it had to undertake a restructuring which left it £1.6bn in debt, comprised of a £1bn bond and a £600m overdraft.

The deal meant the troubled firm had to sell 300 million holidays a year just to make its interest payments and break even – leaving it horribly exposed to further market fluctuations.

It closed 100 loss-making stores in 2017/18 but that wasn’t enough.

Last year a UK heatwave, coupled with depressed consumer spending caused by fears over Brexit and the continued increase in online competition, created a perfect storm of low demand and over-supply.

The company was on the brink.

CEO Peter Fankhauser

CFO Sten Daugaard,

Thomas Cook’s chief executive, Peter Fankhauser, left and its (then-interim, since permanent) chief financial officer, Sten Daugaard, met in December with worried investors

Thomas Cook issued a timeline to investors to try to explain the group’s financial difficulties

Then a month ago the directors, including CEO Peter Fankhauser, and CFO Sten Daugaard – who has only been in place since December of last year – thought they had done a deal which would keep the company afloat.

On August 28, the Group released a statement explaining they had £900m of new money coming in – half from a Chinese consortium and half from their British-based banks and lenders.

They had also agreed that banks would convert most of the money the company already owed into equity in a restructured Thomas Cook – which should have given the troubled firm some breathing room.

Subject to final sign-off from all parties concerned, that deal would have come to fruition next month.

But then, the company says, last week one of the lenders, RBS, got cold feet.

The firm says the bank demanded an additional £200m ‘seasonal stability facility’ to cover the winter lull in business in the tourism industry.

And it is that demand, for another £200m on top of the £900m, which has led some to predict financial ruin could come as soon as this weekend.

That would mean the closure of 550 high street stores, the loss of 22,000 jobs, 180,000 holidaymakers stranded overseas, the biggest peacetime repatriation in British history, and a £600 million bill for the DfT who would be left picking up the pieces and flying tourists home. 

Thomas Cook's shares have suffered a long decline since 2007 despite a rally in 2014

Thomas Cook’s shares have suffered a long decline since 2007 despite a rally in 2014

A collapse would leave 180,000 customers stranded abroad – and dash the plans of thousands of families who have booked holidays (Thomas Cook desks at Gatwick earlier this month)

A collapse would leave 180,000 customers stranded abroad – and dash the plans of thousands of families who have booked holidays (Thomas Cook desks at Gatwick earlier this month)

The company made money in 2015, 2016 and 2017 and credits its success to the new team brought in after the departures of previous bosses, chief exec Harriet Green in 2014 and group chief executive Manny Fontenla-Novoa in 2011.

But the last two years have seen a constant stream of bad headlines in the financial pages.

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The travel company scrapped its dividend last year in an effort to retain cash and blamed a disappointing year on the prolonged summer heatwave across Europe, which meant people delayed their bookings, especially in the UK.

Many travel firms also had to discount their packages heavily in the late booking market.

However, investors also suspect the firm overbooked hotel room capacity, particularly in highly competitive Spanish destinations, forcing it to discount heavily as the market softened.

In late 21018 analysts feared the firm was facing structural challenges – beyond the one-off problems caused by the unusually hot summer – that would require significant changes to operations, including the likelihood of further closures in its large branch network.

During financial year 2017-18 the firm closed 100 stores it said were loss-making. 

It said it has no plans for more closures or job losses, but it intends to add more in-store foreign exchange staff to boost branch profitability.

The concerns among investors were exacerbated when the firm gave a vague outlook for 2019 adding to fears over the impact of Brexit or another crisis in an important package holiday destination such as Turkey. 

The now-chief executive, Peter Fankhauser, and his new chief financial officer, Sten Daugaard, met with investors in December worried about the firm’s financial strength and strategy.

A couple look at holiday offers in the window of a Thomas Cook branch in Redcar. Tens of thousands of customers could be left stranded abroad if the firm goes bust

A couple look at holiday offers in the window of a Thomas Cook branch in Redcar. Tens of thousands of customers could be left stranded abroad if the firm goes bust 

Then this May shares in Thomas Cook plunged 30 per cent after analysts at a bank said the travel firm’s shares were ‘worthless’.

Thomas Cook’s tour operations and airline were worth £738m at the time but with debt valued the same that ‘implies zero equity value’, Citigroup told the BBC.

Citigroup’s damning conclusion came a day after Thomas Cook issued its third profit warning in less than a year and reported a £1.5bn half-year loss.

Its outlook was ‘significantly weaker than expected,’ Citigroup said.

 Last night, RBS denied that it was responsible for putting pressure on the deal. A spokesman said: ‘We don’t recognise this characterisation of events. 

‘As one of a number of lenders, RBS has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook.’ 

Thomas Cook’s 178 years of history are under threat with firm on brink of collapse

Thomas Cook is Britain’s oldest tour operator and viewed as the inventor of the modern package holiday.

Named after its founder, a Victorian cabinet maker, the firm is now 178 years old.

Cook’s first trip, on July 5, 1841, involved chartering a train to take 500 Temperance supporters 12 miles from Leicester to a meeting in Loughborough.

Cook, a supporter of the movement which campaigned against alcohol, charged travellers a shilling per head.

His idea to run tours had come almost a month earlier when he was walking from his home in Market Harborough to Leicester for a Temperance meeting.

Cook later recalled: ‘The thought suddenly flashed across my mind as to the practicability of employing the great powers of railways and locomotion for the furtherance of this social reform.’

Victorian cabinet maker Thomas Cook (pictured) founded the holiday firm in 1841

Victorian cabinet maker Thomas Cook (pictured) founded the holiday firm in 1841

A vintage advertising poster for Thomas Cook which was founded in 1841

A vintage advertising poster for Thomas Cook which was founded in 1841

A pair of vintage advertising posters for Thomas Cook, offering holidays in Britain and abroad

Thomas Cook's World Ticket Office in Jerusalem, offering trips to Palestine

Thomas Cook’s World Ticket Office in Jerusalem, offering trips to Palestine 

His early trips involved rail journeys in the Midlands for local temperance societies and Sunday schools.

Commercial tours began in 1845, with a trip to Liverpool, and expanded to organising transport from Yorkshire and the Midlands to the Great Exhibition of 1851 at Crystal Palace.

The visionary businessman went international in 1855, organising trips to Europe and then North America, along with the launch of a ‘circular note’ – a precursor to traveller’s cheques – which could be cashed for local currency.

In Egypt, a fleet of steam ships were launched to take tourists along the Nile, and also used to convey British troops as part of attempts to break the siege of Khartoum, in Sudan, in 1884-85.

After the deaths of Thomas and his son John Cook in the 1890s, business continued to boom when the firm was inherited by John’s sons Frank, Ernest and Bert.

An advertisement for 'Cook's Nile Service', a cruise on the Express Steamer 'MS Hatasoo' run by Thomas Cook & Son Ltd, circa 1900

An advertisement for ‘Cook’s Nile Service’, a cruise on the Express Steamer ‘MS Hatasoo’ run by Thomas Cook & Son Ltd, circa 1900

A poster promotes a trip along the Nile, accompanied by an image of a bust of Queen Nefertiti, 1930

This 1929 poster romotes travel to the Continent for winter sports destinations

A poster from 1930 (left) offers a Thomas Cook steamer ride along the Nile while another advert from 1929 (right) promotes a winter sports trip to the Continent 

One new hit was winter sports holidays, plus tours by motor car and commercial air travel.

The Cook family sold the firm to the Belgian owners of the Orient Express in 1928.

During World War Two, the company was requisitioned by the British government, then sold jointly to the UK’s four main railway companies, before becoming part of nationalised British Railways.

Thomas Cook was at the forefront of the post-war overseas holiday boom but still also provided breaks within the UK, including at a holiday camp in Prestatyn, North Wales.

It returned to private ownership in 1972, initially purchased by Midland Bank, hotels group Trust House Forte and the AA, then becoming wholly owned by Midland.

The chain rapidly expanded its high street travel agencies and bought up smaller rivals.

Thomas Cook temporarily passed into German hands in the 1990s before merging with UK firm Carlson Leisure Group in 1999, then returning to German ownership in 2001. It was floated on the stock exchange in 2007. 

*** If you have information about the financial position of Thomas Cook or have been notified by Thomas Cook your holiday has been cancelled please contact MailOnline with your story on joel.adams@mailonline.co.uk or 0203 615 4959***



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