Peterborough, HQ of Thomas Cook,
Saturday September 21st:
'Thomas Cook is currently trading and its lenders are urgently negotiating to secure its future'... Calm words but in reality The Thomas Cook Group is like a swan, all serene above the waterline but flapping hopelessly under the water, writes Julian Bray Aviation Operations Expert, Broadcaster and Journalist.
Simply the Group has an astronomical debt mountain, circa £6billion, and has to urgently put new financial arrangements in place within the next few days.
Sadly duff, highly alarming, information is relentlessly being peddled throughout the day by some TVNews channels, interviewing poorly briefed celeb travel content bloggers and screeching that many thousands of British package holidaymakers will be stranded!!! The final page of your booking invoice will bear the ATOL certificate and a number.
Screech no more, enjoy your holiday, and if you paid more than £100 of the total invoice using a valid credit card, the credit card company is joined in and will refund the full amount of the TOTAL invoice! ( For the celeb. travel blogger popping up on the bulletins, the authority she could not remember is Section75 of the Consumer Credit Act).
The Monarch collapse provides a useful blueprint and the ATOL bond or levy will ensure all package holiday customers get a flight home. There are reports that some Thomas Cook aircraft are already being parked up 'out of the way' on remote airport gates or stands.
Equally other reports suggest the CAA rescue 'Ghost airline' is already shadowing Thomas Cook aircraft, should any TC aircraft be seized by worried creditors in far off lands...
So not at all a case of being stranded, just that the aircraft might not be flagged Thomas Cook but could well be any of a dozen or so major or regional airlines with their own pilots and cabin crew.
It is however potentially a huge problem for the politicians as there is only £18 million in the ATOL bond, but a full repatriation rescue flights programme will cost some £600 million!
As its mostly calculated in US $!!
And planes for hire are still quite busy!
So you can see why it is now claimed that Thomas Cook directors this weekend are pleading with Government to magically come up with the topslice £200million! It will not have escaped your notice that it could all blow up right in in the middle of Party Political Conference season! Now a collapse of this size will stifle any Conference tittle tattle, soat or sackings.
You'll find details of the proposed initial series of deals on the Thomas Cook Group website in the media centre press release dated August 28th, but to save you the trouble, its akin to strictly dancing on the head of a pin....
Virtually impossible, but the firm was sufficiently bullish to talk it up, existing shareholders would however be a casualty and the firm would be carved up, and control passed to a China based group.
The £900 million rescue funding offered by the Chinese would seem to have done it. However they forgot to first get the sanction ie approval of Royal Bank of Scotland, Barclays and Lloyds Bank who have demanded the funding should be increased by another £200 million, essentially tonsed the Group through the lean cashflow winter and early Spring period.
Its like a stack of dominoes, or a complex jigsaw, if one interlocked conditional deal goes over then so do the rest. The firm then without the support of creditors and banks calls in the administrators.
The key date is Friday 27th, when all the stakeholders are due to meet, that date was fixed before, the 'unexpected' demand for an extra £200 million was revealed! So the Board could well decide the game is up and opt for administration.
Assuming the firm gets through the 27th September meeting unscathed, then the next problem will be the UK Civil Aviation Authority who must approve the renewal of the ATOL certificate. Without it, the Thomas Cook airline is grounded and cannot operate.
So that backgrounds what is going on, loyal Thomas Cook staff must be very worried, and their retired pensioners equally so. Different parts of Thomas Cook are already divided into separate legal entities. The package holiday (ATOL protected) was sold to you by Thomas Cook Retail Ltd.
But what of the customers? So far the company is trading normally - their words not mine - but the average family or group faced with all this and politicians on an extended holiday ligging it up in seaside conferece hotels ( the hotels also possibly crefitors of Thomas Cook Group!) seemingly not giving the plight of holidaymskers a thought.
However Ugandan born solicitor Shailesh Vara MP has had words with the management and assures me he is looking out for the Peterborough based staff.
@JULIANBRAY +44(0)1733 345581, Journalist & Broadcaster, Aviation Security & Airline Operations Analyst/expert, ... http://feeds.feedburner.com/BraysDuckhouseBlogwww.aviationcomment.com, ... http://www.freelancedirectory.org/user.php?user=8121 ... www.freelancedirectory.org?name=Julian.Bray.aviation.comment, ... Aviation / Travel / Maritime & Cruise Industries, NUJ, EQUITY, LIVE ISDN LINK, Broadcast ISDN COOBE ++44 (0)1733 345020 ... SKYPE: JULIAN.BRAY.UK e&oe Old faithful NOKIA: 07944 217476