UK launches tourist airlift after Thomas Cook collapse

Bloomberg

The UK government deployed the “largest repatriation in peacetime history” to bring home more than 150,000 tourists stranded on overseas beaches and in vacation hotspots by the collapse of tour operator Thomas Cook Group.
The massive airlift, using chartered jetliners, follows the collapse of the 178-year-old company after eleventh-hour fundraising talks with investors failed. The move saw all bookings, flights and package tours canceled, sparking online panic for travelers and prompting a plunge in Thomas Cook bonds.
The government said it would work to return vacationers over the next two weeks in an exercise dubbed Operation Matterhorn. The rescue will cost about 75 million pounds ($93 million), according to a person familiar with the situation — about 50 percent more than the UK spent to bring home travelers affected by the demise of Monarch Airlines two years ago.
Those who have reached their destinations were urged to stay in place and continue their vacations, with the government saying it’ll cover the cost of accommodation and their return home around the scheduled time. Bookings are covered by the Air Travel Organizer’s License program, or ATOL, which provides insurance against travel disruptions.
Still, the collapse of Thomas Cook has thrown travel plans into chaos for thousands of people who had yet to depart — throwing a monkey wrench into family reunions, weddings while sowing confusion among vacationers who took to Twitter to vent.
Thomas Cook is the highest-profile casualty of a decades-long shift in the travel business. The rise of discount airlines and online booking platforms has encouraged sun-starved Europeans to spurn package-tour operators and arrange their own trips, while the highly seasonal industry has suffered shocks ranging from terrorism to political turmoil.
The demise of one of the UK’s best-known brands, leaving more than 21,000 jobs at risk, caps months of talks with its investors, led by Fosun Tourism Group. The Chinese company, which owns the Club Med resort chain, proposed a $1.1 billion bailout in exchange for control of Thomas Cook’s tour operations and a minority stake in its airline.
Last week, the London-based company said it needed 200 million pounds more, prompting its rescue prospects to
unravel. “Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable,” said Chief Executive Officer Peter Fankhauser.
Thomas Cook shares were suspended in London and its euro bonds plunged 72 percent. German rival TUI AG rose as much as 11 percent, while British Airways parent IAG, Easyjet Plc and Ryanair Holdings Plc got a boost from the prospect of flying home stranded passengers at the UK government’s expense, as well as increased bookings down the road. The collapse deals another blow to the European travel sector, just months after the bankruptcy of Icelandic budget airline, Wow Air.