More than half of the 150,000 holidaymakers stranded abroad after Thomas Cook collapsed on Monday will have returned to the UK by Friday night after a huge operation by Britain’s aviation regulator.
News came as the government revealed that the combined cost of the rescue flights and refunds for holidaymakers whose trips were cancelled, reached £520m. It is unclear how much of the final bill will be covered by taxpayers.
Brexit
“There is now little doubt that the Brexit process has led many UK customers to delay their holiday plans for this summer,” said the chief executive, Peter Fankhauser, in May. But it cannot be the whole story - arch-rival Tui has coped because its finances are healthier.
Weather
The summer heatwave of 2018 encouraged would-be holidaymakers to stay at home, undermining prices in the “lates” market where operators try to clear unsold holidays. There seems to have been a hangover into 2019, with customers calculating that waiting to book is a productive strategy.
Competition
A pincer movement of Airbnb and budget holidays has changed consumer behaviour, though Thomas Cook still managed to sell 11m package holidays last year.
Banks and debt
The tour operator has been attempting to shoulder a huge pile of debt for the past decade – £1.7bn worth at the last count. Successive managements failed to remove meaningful chunks. The banks argue they have supported an overstretched company for years and the details of why it could not be saved may have to await the report from the Insolvency Service.
Bad management
Thomas Cook’s borrowings were too high. The moral of the tale is that tour operators should fund themselves conservatively. If your balance sheet is fragile, you are at the mercy of events in an industry where most of the cash arrives in the summer and then flows out in the winter.
Nils Pratley, financial editor
More than 61,000 people had been brought home on 275 flights by Thursday night, four days after the Civil Aviation Authority launched Operation Matterhorn to bring back stranded holidaymakers. Another 72 flights were expected to bring home a further 16,000 people on Friday.
The CAA said that so far, 95% of customers had been returned on their original travel dates. It expects to have operated more than 1,000 flights in total by the time the operation ends on 6 October.
The collapse of the world’s oldest tour operator in the early hours of Monday morning triggered the largest peacetime repatriation in UK history, an operation which is expected to cost around £100m.
That adds to a growing bill to cover refunds of future holiday bookings under the Air Travel Organisers’ Licence (Atol) insurance scheme, which government figures said have reached £420m.
The CAA chief executive, Richard Moriarty, said: “Despite the challenges of this unprecedented situation, I am pleased that our Operation Matterhorn is on track with around 61,000 people flown home in the first four days – over 40% of the total.
“Around 95% of people have flown home on their original date of departure at the end of their holiday. An operation of this scale and complexity will inevitably cause some inconvenience and disruption and I am very grateful to holidaymakers for bearing with us as we work around the clock to bring them home.”
