Thomas Cook Collapses with 600,000 Tourists Stranded

150,000 of them British

Posted by Gary Smith on Sept 23, 2019

It looks like there are a lot of angry overweight Thomas Cook tourists out there.

I wonder if the real reason the media choose those fat faces is to fill up the widescreens? Just a thought, but I'm pretty confident that is why they do it.

Anyway, Sky had a potentially stranded mother and daughter (this was on Sunday). The mother was in tears because she needed her medication on Monday and her flight was on Monday and what would she do if her flight was cancelled?

It's an interesting just in time medication strategy she is employing here. I would take a couple of extra days with me I think just for emergencies. How much is a couple of extra days worth of drugs sizewise? Probably smaller than a small bag of Minstrels. But maybe she has different priorities.

The media is filled to the brim with human interest Thomas Cook disasters today.

The Mail told us of a woman who had never been to Turkey before and had booked a holiday next May and said she would “go off” if she lost her money. Not sure how that works if the company has gone bust.

Perhaps the saddest funny holiday disaster I saw was Thomas Cook, 29, had been promised a surprise by Thomas Cook, 178, because it was his wedding next week. I hope someone will crowd fund something for him, but that's nothing to the trolling he's going to get from everyone on twitter if he dares raise his face for the next week or two.

I love the way the media in this country are concentrating on the 150,000 British holiday makers stranded. Completely ignoring that this British company has 450,000 foreign customers all in need of repatriation. I suppose news that this is the biggest repatriation in peace time doesn't work in the pro Brexit media if we help fly the Germans home, of which there are 140,000.

I assume the German government will repatriate them too. I wonder how the German media will spin it. Probably as the biggest repatriation in history, I mean stating the obvious here but they didn't do a repatriation after the Second World War we had to do it for them.

Thomas Cook is a substantial company with tentacles everywhere. This picture below has been taken from their last annual report, 2018. It shows where Thomas Cook has a presence.

Thomas Cook - Extent of Operations, Annual Report 2018

TC had a turnover of £7.4 billion in 2018. The company claimed in that annual report that it had a just under 20% profit margin (page 20). But still it lost £163milion in 2018. With £1.6bn of debt at the end of 2018 the company was clearly in a precarious position.

@Frances_Coppola had a widely shared thread summarising the problems Thomas Cook faced:

Frances Coppola's conclusion is that the company was unsavable.

The media concentrated on a £250 million shortfall that the government could somehow cover – it would have to pay £600mn for the repatriation so they were saving money was the implied story.

Sounds like someone had given that a bit of thought, a number of lefties have said it was a price worth paying. But Grant Shapps slapped that one down on the Radio 4 Today programme.

Summary: The government would have to pay for the repatriations when it collapses next time so it might as well be now. All this positive Brexit energy seems to be being directed elsewhere.

Short sellers have had a good time in Thomas Cook. It was a straight knife edge down for the last year. At the start of the year the share price was just over 60p, down all the way to presumably 0p, it was around 3p at close on Friday.

Thomas Cook 1 year to 23rd September 2018 - Source Hargreaves Lansdown

Source Hargreaves Lansdown

If you were expecting tears from the CEO of Thomas Cook, Peter Fankhauser, which sounds like a comedy name but isn't (the guy on Curb Your Enthusiasm is Marty Funkhouser) you would have been disappointed:

There was social media wittering that he earned something like £8million over the last 5 years. Half of that was five years ago though, he only earned a million in 2018. He got a bonus of £82K in 2018 when the company lost £163mn so that presumably was a much better result than they were expecting.

Did I read somewhere that £20million was paid to the board?

But the thing that didn't exactly bring a tear to my cynical eye but gave me a wistful sigh, and I can completely believe this happened having not witnessed it but seeing reports on Twitter, some Thomas Cook representatives, who were now probably jobless, turned up to help out customers on the Monday morning. I suppose they didn't have anything else to do and the prospects were they would have to go home on the same plane as their customers so probably it was a good move. That trip could have been awkward.

The company is now in liquidation so who knows what will rise from the ashes. Will 178 years of history be expunged or will it rise again like Kodak did. Kodak's liquidators sold it's name to a company.

I'm guessing we will see Thomas Cook again. It's a good brand. It means something special to millions, even though there are 600,000 people affected now, and many more with holidays and flights booked which they wont get but they should get their money back.

Gary Smith 23rd September 2019