Thomas Cook, the UK’s travel giant, filed for liquidation early on Monday and immediately ceased trading after 178 years in business, leaving 21,000 jobs at risk and hundreds of thousands of holidaymakers stranded.
The troubled firm’s extreme move comes after talks for $250 million from investors to avert insolvency collapsed on Sunday.
The deal seemed possible until it hit a
stumbling block over funds for the standby facility, Peter Fankhauser, chief executive
of Thomas Cook, said.
He called it a sad day and apologised to the company’s staff, clients, suppliers and partners.
Some 600,000 customers are on holiday with Thomas Cook which employs around 9,000 people in Britain alone.
British Prime Minister Boris Johnson rejected Thomas Cook’s request for a bailout of $187 million arguing that other firms might expect similar treatment if they go bankrupt. However, he promised to bring stranded British holidaymakers back home.
UK aviation regulator Civil Aviation Authority (CAA) and the UK government are planning to use other airlines to return them.
The CAA has advised passengers who have already booked Thomas Cook flights and are stuck abroad not to travel to airports until their flights back to the UK have been confirmed on the dedicated website.
Thomas Cook customers in the UK have been advised not to proceed to airports as all flights leaving the country have been cancelled.
Germany’s charter airline Condor, which is part of the Thomas Cook group, has sought a bridging loan from the German government which is considering the request. Condor said, for now, flights will remain operational.
Germany is one of the biggest markets of Thomas Cook. According to an official, insurance companies in Germany will help bring back stranded passengers.