Thomas Cook, one of the most well-known brands in the
history of the travel industry, has collapsed after a financial rescue failed
to materialize.
The U.K. and Germany-listed public company needed a £200
million bailout to secure survival following a previous investment of £900
million in July.
Thomas Cook applied for "compulsory liquidation"
with immediate effect in the early hours of Sept. 23, putting the company in the
hands of external officials to wind down business operations.
Some 600,000 travelers are currently in-destination on trips
provided by its range of tour operating brands or on flight-only deals on its
airline.
The financial crisis that engulfed the company ahead of its
collapse this week was blamed on political problems in destinations such as
Tunisia and Turkey, travelers taking domestic holidays due to unseasonably warm
weather in Northern Europe in 2017 and unease around the U.K.'s ongoing Brexit
saga.
Thomas Cook has 34 aircraft and a 22,000 headcount
worldwide, including those in call centers, retail travel agencies and support
staff in hundreds of resorts.
The current incarnation of Thomas Cook goes back to 2007, when
it merged with fellow tour operating brand MyTravel -- the same year that arch
rival TUI (then Thomson) joined forces with First Choice.
But its roots stretch further to 1841, when a cabinetmaker with
the name Thomas Cook organized rail-based tours around the U.K. Within 25 years
it was sending travelers around Europe and to the U.S.
Despite sales of around £9 billion a year, Thomas Cook has
faced a string of problems ever since the merger with MyTravel, such as a
financial bailout in 2011 and a number of poor management decisions, including
those covering IT and digital strategy.
A £100 million project given to IBM in 2006, ahead of the
merger, became a poisoned chalice over the course of the next half a decade due
to the size of the task to unify and integrate each of the tour operating
brands onto a single reservation and customer management platform, running both
online and in its retail travel agencies.
BlueSky Technologies, one of the vendors tasked with
implementing much of the Globe project, collapsed in 2009 and relations between
Thomas Cook and IBM also became strained.
Thomas Cook eventually axed the project in 2011 amid a £86
million financial write-off, blaming a change in requirements and the
complexity of attempting to connect the myriad of brands.
Perhaps most infamously was then-CEO Manny Fontenla-Novoa's
belief in 2010 that Thomas Cook could challenge Expedia in Europe (strangely,
he never mentioned Booking.com) and become the biggest online travel agency in
the region within three years.
The project was given its own headquarters in London and
ex-Expedia managing director Simon Breakwell was brought in to oversee
operations.
Fontenla-Novoa resigned in 2011 and the OTA project barely
got a mention by his replacement as CEO, Harriet Green.
The OTA ambitions did get a somewhat ironic final chapter
when Thomas Cook announced in 2018 that it would be using Expedia's white label
to power large parts of its accommodation booking site.
Thomas Cook Group's CEO, Peter Fankhauser, who took over
from Green in 2014, says the need to find another £200 million proved "insurmountable."
He added: "It is a matter of profound regret to me and
the rest of the board that we were not successful. I would like to apologize to
our millions of customers, and thousands of employees, suppliers and partners
who have supported us for many years.
"Despite huge uncertainty over recent weeks, our teams
continued to put customers first, showing why Thomas Cook is one of the
best-loved brands in travel.
"Generations of customers entrusted their family
holiday to Thomas Cook because our people kept our customers at the heart of
the business and maintained our founder's spirit of innovation.
"This marks a deeply sad day for the company which
pioneered package holidays and made travel possible for millions of people
around the world."
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Source: PhocusWire