The failure of world’s oldest travel company- Thomas Cook- has left travel industry in shock. There were reports that 186-year-old company was struggling but, its fall would come so soon, nobody has foreseen it. Its sudden collapse is baffling and raises many tough questions including the role of regulators and auditors.
As many as 600,00 holidaymakers were left in lurch in the collapse of this 178-year-old British company. As the Thomas Cook's empire stretches across Europe, tens of thousands of tourists were travelling with its subsidiaries.
Fortunately for holidaymakers, unlike India in Europe, holidaymakers are protected financially from a company's insolvency as well as having the right to repatriation under EU package holiday rules.
Accordingly, Britain Civil Aviation Authority has had the task of bringing back more than 150,000 holidaymakers. It repatriated more than 14,000 passengers on Tuesday and another 16,500 on Wednesday.As per reports the biggest group affected outside the UK is from Germany. A spokeswoman said on Wednesday that 97,000 people were currently travelling with the company.
Thomas Cook Germany employs some 2,000 people and has several national brands, including Neckermann, Öger Tours, Air Marin and Bucher Reisen. A thousand people are employed by the company near Frankfurt in Germany. The German government has already granted a €380m (£335m; $420m) bridging loan to the holiday airline Condor.
Condor is 49% owned by Thomas Cook. Condor on Wednesday filed for insolvency to save the company and to extricate itself from its parent company's "financial tie-ups and related liabilities". British government has already announced a fast-track inquiry into the collapse by the Insolvency Service, which is charged with closing down the 178-year-old holiday business.
Undoubtedly, the failure of Thomas Cook is a big setback to tourism and travel industry. Some countries such as Egypt and Greece have expressed concern that local businesses could be financially impacted by loss of tourism.
Goa's Travel and Tourism Association in India said that the loss of Thomas Cook is a "big, big, blow to the industry"
Spain's Balearic Islands faces losses running into millions of euros. Thomas Cook has a tax office in Palma with hundreds of employees, and also works with hotels in the Balearic Islands and Canary Islands
The Gambia's government has held an emergency meeting expressing concern over Thomas Cook's collapse. It will will hurt tourism, which provides about a third of the country's GDP.
The loss for hoteliers and the economy in Cyprus, is projected at about €50m, according to deputy tourism minister Savvas Perdios. Hotels are owed money for July, August and September, he added.
In Greece, hotels expect losses on payments from recent months. He said they would attempt to recover money from Thomas Cook in court.
Turkey's Hoteliers Federation (TUROFED) has warned that the country could miss out on up to 700,000 tourists a year due to the collapse.
One of the reasons for the collapse of the company has been attributed to exorbitant pay out to its directors. As mucn as £35m were paid out over the past 12 years some directors. The collapse of Thomas Cook is a warning to the tourism and travel industry. There has to some safeguards in India as well, Big companies can't have all the fun.