Its Thomas Cook UK; NOT Thomas Cook India!

Hundreds of thousands of holidaymakers around the globe got stranded as the news of the
British travel giant Thomas Cook, the world's oldest travel firm getting collapsed made
rounds in the media on 23rd September 2019.

Image Source: https://www.bbc.com/news/business-49791249

This sparked the largest peacetime repatriation effort in British history. British Prime
Minister Boris Johnson revealed that the government had rejected a request from Thomas
Cook for a bailout of about 150 million pounds ($187.1 million) because doing so would
have set up a "moral hazard". He explained further, "It is a very difficult situation and
obviously our thoughts are very much with the customers of Thomas Cook, the holiday
makers who may now face difficulties getting home we will do our level best to get them
home."

The liquidation marks the end of one of Britain's oldest companies that started life in 1841
running local rail excursions before it survived two world wars to pioneer package holidays
and mass tourism. The firm ran hotels, resorts and airlines for 19 million people a year in 16
countries. It currently has 600,000 people abroad, forcing governments and insurance
companies to coordinate a huge rescue operation.

1
Image Source: https://www.bbc.com/news/business-49791249

The UK's Civil Aviation Authority (CAA) confirmed that Thomas Cook had ceased trading
and the regulator and government had a fleet of planes ready to start bringing home the more
than 150,000 British customers over the next two weeks.

The government and aviation regulator said that due to the scale of the situation some
disruption was inevitable. All the company's flights are cancelled.
Customers were told not to travel to airports until they have been told via a special website -
thomascook.caa.co.uk - that they were due on a return flight that was being organised by the

2
government. In Germany, a major customer market for Thomas Cook, insurance companies
will coordinate the response.

WHAT DID THE CEO SAY?

Thomas Cook CEO Peter Fankhauser said in a statement, "I would like to apologise to our
millions of customers, and thousands of employees, suppliers and partners who have
supported us for many years. This marks a deeply sad day for the company which pioneered
package holidays and made travel possible for millions of people around the world."

Watch Now: https://www.independent.ie/videos/world-news/video-thomas-cook-ceo-apologises-

for-collapse-as-holidaymakers-left-stranded-38524044.html

MAJOR CONSEQUENCES

The corporate collapse has the potential to spark chaotic scenes around the world, with
holidaymakers stuck in hotels that have not been paid in locations as far afield as Goa,
Gambia and Greece.

In the longer term, it could also hit the tourism sectors in the company's biggest destinations,
such as Spain and Turkey, leave fuel suppliers out of pocket and force the closure of its
hundreds of travel agents across British high streets.

What happens now and why did it collapse?

WHO IS AFFECTED?

The firm ran hotels, resorts and airlines for 19 million travellers a year in 16 countries,
generating revenue in 2018 of 9.6 billion pounds ($12 billion). It currently has 600,000
people abroad, including more than 150,000 British citizens.

3
Thomas Cook employs 21,000 people and is the world's oldest travel company, founded in
1841. The company has 1.7 billion pounds ($2.1 billion) of debt.

WHY DID IT COLLAPSE?

Hurt by high debt levels, online rivals and geopolitical uncertainty, Thomas Cook needed
another 200 million pounds on top of a 900 million pound package it had already agreed, to
see it through the winter months when it receives less cash and must pay hotels for summer
services.

The request for an additional 200 million pounds torpedoed the rescue deal that had been
months in the making. Thomas Cook bosses met lenders and creditors in London on 22nd
September, 2019 to try to thrash out a last-ditch deal to keep the company afloat. They failed.

THOMAS COOK INDIA STORY

On the other hand, Thomas Cook India has stated that it is a completely different entity from
Thomas Cook UK as it was aquired by Fairfax Financial Holdings via a 77% stake in 2012
and that the developments concerning the UK based company have not impacted it.

4
Image Source: the Mint, 23rd September, 2019

5
Post transfer of its entire stake in Thomas Cook (India) Limited to Fairfax, Thomas Cook UK
ceased to be the promoter of Thomas Cook (India) Limited from the said date and since then,
Thomas Cook UK has had no stake in Thomas Cook Thomas Cook (India) Limited, the
company said in a statement and added that it continues to grow and build its legacy as an
independent entity after Fairfax Financial Holdings acquired it.

Thomas Cook (India) offers services ranging from foreign exchange, corporate travel, MICE,
leisure travel, insurance, visa and passport services and e-business. It operates B2C and B2B
brands including Thomas Cook, SOTC, Sterling Holidays, TCI, SITA, Asian Trails, Allied T
Pro, Australian Tours Management, Desert Adventures, Travel Circle International Limited,
Travel Junkie (Ithaka), Digiphoto Entertainment Imaging (DEI), Private Safaris East & South
Africa - across 29 countries.

The Thomas Cook India Group’s cash and bank deposits balances stand at Rs 13,890 million
as of June 30, 2019. On a standalone basis, Thomas Cook India is debt free upon pre-
payment of Rs. 670 million debenture obligations ahead of schedule. This has been made
possible using stable and strong cash flows that the Thomas Cook India Group is generating
year over year.

Amidst the heart-breaking news of the collapse of the Thomas Cook, UK, the Thomas Cook
India released a statement saying, "We believe that it is important that we clarify for the
record that Thomas Cook (India) Limited is financially strong, profitable and maintains a
positive outlook in the travel and tourism sector and continues to witness strong growth.
The Group generates an average annual free cash flow of around Rs 2500 million”.