Thomas Cook, the world’s oldest travel company, has abruptly shut down, leaving as many as 500,000 stranded passengers around the world feverishly Googling “max number of days it’s ok to wear the same socks.”
FYI: The 178-year-old U.K.-based firm specialized in low-cost package vacations, bundling flights and accommodations in over 60 destinations around the world. All 21,000 of its employees’ jobs are at risk.
How did T-Cook get here?
The money reason: In May, Thomas Cook issued its third profit warning in under a year. Its debts were approaching £2 billion ($2.5 billion), and recent emergency negotiations came up at least £200 million short.
- The U.K. refused to intervene, lest it create a “moral hazard.” PM Boris Johnson said one government bailout could suggest that’s an option for any risky company.
- And we know saving a travel firm, no matter how old, isn’t priority No. 1 for 10 Downing these Brexit days.
The meta reason: Ask any college junior who recently embarked on a semester abroad—EasyJet or bust. The rapid rise of a) low-cost European airlines and b) cheap, easy-to-book accommodations like Airbnb sucked the life out of the old-school Thomas Cook.
Now that it’s “ceased trading with immediate effect,” Thomas Cook has set off what U.K. officials are calling the largest peacetime repatriation effort in the country’s history, or at least since One Direction’s “Where We Are” tour finished its North American leg.
- The government has announced plans to bring back 150,000 travelers over the next two weeks. As of yesterday afternoon, they’d chartered 60 flights.
- Officials haven’t disclosed the cost of the operation, but the government forked over about $62 million to repatriate ~110,000 people when smaller tour operator Monarch Airlines folded in 2017.
Credit: Morning Brew