NEWS of struggle and failed rescue attempts, the collapse of a travel institution leaves the industry in turmoil
Freedom agents are devastated by failure
Efforts to secure a company to fulfil the bookings of Freedom Travel Group members, and save their businesses, appeared close to success on Tuesday night. A deal would save the bookings
s into liquidation
9,000 The number of Cook staff in the UK who have lost their jobs
role of management in it. Prime minister Boris Johnson
weighed in, declaring: “I have questions about whether it’s right that the directors should pay themselves large sums when a business can go down the tubes.” Yet there was industry anger at the
government’s failure to act on financial protection rules that put the costs of repatriating and refunding package holidaymakers on to the sector while taxpayers’ money goes to pick up the tab for non-Atol passengers. Tomas Cook had been in
difficulty for 12 months. Having issued two profit warnings in the run-up to its annual results last November, it put its airline up for sale in February and gave notice in May that it would not survive beyond the summer without an injection of capital.
travelweekly.co.uk But until last week it seemed it
would be saved by a deal valued at more than £2.5 billion. Tis would have seen a takeover by Chinese group Fosun and a consortium of banks and bondholders. Te rescue floundered over a
late demand from the banks for an additional “standby facility” of £200 million. Fosun reportedly balked at stumping up more cash, the government declined to act as a guarantor and a last-gasp atempt to raise funds from a group of Spanish hoteliers ran out of time. Chief executive Peter Fankhauser
expressed “profound regret” at the failure. Commentators were united in the
view, expressed by one newspaper, that Cook’s “crucial error was to stick with high street, mass market tourism”. However, the overriding problem
was the £1.6 billion debt Cook carried from 2011-13 when it previously came close to bankruptcy.
Have you been affected by
Thomas Cook’s failure? Email:
editorial@travelweekly.co.uk
of 26,000 customers aſter Freedom parent company Tomas Cook’s collapse led to 48 hours of confusion for Freedom members. Travel Weekly understands
the Civil Aviation Authority was poised to confirm details on Tuesday evening, aſter this magazine went to press. Freedom, which comprises
155 consortium agents and 140 homeworkers operating independently of Tomas Cook, went into liquidation as a result of the failure. Management services and
booking systems were shut down on Monday, leaving agents no access to client information on current or forward bookings and therefore unable to trade. Agents reported “total
confusion” over whether bookings, mostly dynamic packages, would be fulfilled – despite monies being paid into a trust fund. Some suppliers, including Hotelbeds and Holiday Extras, had cancelled bookings in a move the later said was to “protect our business”. Freedom member Andrew
Earle of Andrew Earle’s Holidays said: “We’ve been overlooked and a lot of us are fearful about
the future. It’s been so difficult because customers have been coming in and we can’t give them any answers.” He pointed out customers
did not know that Freedom was linked to Cook. Jayde Nassa, owner of Nassa
Travel, had 300 bookings with suppliers under Freedom’s Atol and more than 1,000 Cook customers. She said: “I’m trying to get signed up to another consortium. I’ve not been trading. I’ve lost so much business.” Another Freedom agent, who
asked not to be named, paid for clients’ accommodation out of his own pocket. He said: “We can’t trade until we have another Abta number. I don’t know how many can sustain their cashflows over the next few months. We have been leſt in the dark.” Agents were contacting other
consortia and homeworking groups in a bid to restart trading and keep their businesses afloat. Midcounties Co-Operative, Te Vertical Group, Te Travel Network Group and Protected Trust Services had all taken Freedom members on. David Elstob, director of
Future Travel of which Freedom Personal Travel Advisors is the trading name, said he was “absolutely devastated and appalled by the compulsory liquidation”.
26 SEPTEMBER 2019
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