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  • The collapse of Thomas Cook has ruined the livelihoods

  • of 21,000 staff working for the troubled travel company who now

  • stand to lose their jobs and disrupted

  • the holidays of hundreds of thousands of customers.

  • The British government has launched Operation Matterhorn,

  • the biggest peacetime repatriation of UK citizens,

  • which will fly 150,000 British holidaymakers back home.

  • But for hundreds of thousands of customers

  • who have booked package holidays and flights with Thomas

  • Cook, what are your rights now that the company has entered

  • administration?

  • Let's start with those currently overseas.

  • Over the next two weeks, the UK's Civil Aviation Authority

  • has committed to fly home all Thomas Cook

  • customers with return flights who are currently overseas.

  • It says it will endeavour to get people home as close

  • as possible to their planned travel dates and has set up

  • a dedicated website - ThomasCook.caa.co.uk -

  • where affected customers can find details and information

  • on repatriation flights as well as advice on accommodation.

  • The regulator has also set up a 24-hour helpline for Thomas

  • Cook customers, which can be reached on 0300-303-2800 from

  • the UK and Ireland and +44-1753-330-330 from overseas.

  • All UK customers who have booked a package holiday

  • - that's hotel and accommodation -

  • will be covered by ATOL, the consumer protection

  • scheme which is funded by industry levies.

  • This guarantees to fly customers home

  • in the event of a company failure

  • and refund the cost of replacing ATOL-protected parts

  • of their trip as well as covering

  • out-of-pocket expenses as a result of delayed flights home.

  • Now normally, customers who had only

  • booked a flight through Thomas Cook

  • would not be covered by ATOL protection.

  • But the CAA has confirmed that it

  • will fly home both ATOL and non-ATOL customers.

  • It stresses that customers who are currently overseas

  • should not travel to the airport until their flight back

  • to the UK has been confirmed on the dedicated website.

  • So what about those who have yet to travel?

  • Thomas Cook customers in Britain have already been told not

  • to go to the airport, as all flights leaving the UK have

  • been cancelled.

  • ATOL-protected passengers with future package holiday bookings

  • will be entitled to a full refund for their cancelled

  • holiday.

  • But this will take some time to process.

  • The CAA says it will not be in a position

  • to start accepting claims until next Monday, the 30th

  • of September, and has warned that from then it

  • could take as long as 60 days after that for the money

  • to be refunded, which takes us to the end of November.

  • This will unfortunately leave many passengers

  • with a rebooking dilemma.

  • As they wait to get their money back,

  • the price of flights and holidays with rival tour

  • operators is going up.

  • Travel experts are already warning

  • it could take even longer, due to the huge scale of Thomas

  • Cook's operations.

  • When Monarch collapsed in 2017, the CAA

  • had to process 30,000 claims under ATOL

  • and managed to refund 80 per cent

  • of those within three months.

  • But it is estimated it will receive hundreds of thousands

  • for Thomas Cook.

  • When its claims website goes live next Monday,

  • those making a claim will need to provide

  • their ATOL certificate issued at the time of their package

  • holiday booking and proof of payment

  • in the form of bank or credit card statements.

  • Those who only booked a flight through Thomas Cook's airline

  • will need to make a claim through their travel insurer

  • or attempt to get their money back through their credit

  • or debit card provider.

  • Finally, while all the upheaval is

  • distressing for holidaymakers, you

  • will get your money back eventually.

  • Sadly, the same cannot be said for the thousands of staff who

  • stand to lose their jobs at Thomas Cook.

  • So for investors, this means a number of things,

  • depending on what kind of investors they are.

  • Equity investors will be wiped out by this.

  • But they would have been, in most circumstances, anyway.

  • And equity investors have been pulling out

  • of this stock for a long time.

  • Its troubles are maybe 15 years old.

  • This business has been badly-run for many years.

  • It's had three really quite underwhelming chief executives.

  • We've seen a slow decline in its market.

  • It's been very badly positioned.

  • I think if you're looking around the travel industry space,

  • it also shows that there are some opportunities.

  • There are some other businesses that

  • have been doing very well by being a little more agile

  • than Thomas Cook has been.

  • There's a company called Dart, for example,

  • which is a UK-listed holidays and airlines group.

  • They've been going up this morning.

  • TUI, a big German group, which has a large UK side as well,

  • has also seen a bounce in the shares today.

  • But I think you also have to think deeply

  • about how legacy businesses with lots and lots of balance

  • sheet invested in things like hotels and cruise ships

  • are going to do.

  • This is now quite an asset-light sort of industry.

  • And there are a lot of online startups

  • who have been disrupting what had

  • been a very stable and comfortable space for people

  • like Thomas Cook.

  • Other investors, if you look at people who have bonds,

  • for example, or loans extended to Thomas Cook,

  • they will probably get back less than expected

  • as a result of this being an insolvency process rather

  • than an administration.

  • When Monarch Airlines went under, parts of it were bought.

  • And that meant that more went back to debt investors

  • than would have otherwise been the case.

  • The interesting question is what credit default swap investors

  • get because there is a theory which

  • is abroad at the city this morning

  • that what happened here was that investors in credit default

  • swaps, which pay out when a business can no longer meet

  • its loan or bonds obligations, may have encouraged

  • this collapse and also nudged it in the direction

  • of an insolvency rather than an administration.

  • That could be a very politically explosive conclusion,

  • if it's correct.

The collapse of Thomas Cook has ruined the livelihoods

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What the Thomas Cook collapse means for customers and investors | FT

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    林宜悉 posted on 2020/03/07
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