The bankruptcy of Thomas Cook or the chronicle of an announced disaster

LONDON – It took a weekend to seal the fate of Thomas Cook. But this precipitous fall by the intransigence of some banks is explained both by years of risky management, a fierce competition from the internet and Brexit.
The venerable British tour operator put an end on Monday morning to 178 years of history, since its founder, Thomas Cook, had invented in 1841 modern tourism at the beginning of the Victorian era.

His brutal bankruptcy is not a surprise given the health of the group that continued to deteriorate for ten years, with a gigantic debt of over a billion pounds.

“The debt was only the symptom of a deep ache. Thomas Cook failed because he failed to evolve with his time, “said Neil Wilson, an analyst at

For its part, the British government, which opened an investigation, estimated that “there were several complicated reasons behind the bankruptcy,” according to a spokeswoman for Downing Street.

The turning point can be dated 2007 when the group embarks on the acquisition of MyTravel, a British specialist in traditional organized travel.

This acquisition at a high price will be difficult to digest, just when the model of the group is challenged by the rise of vacations purchased on the internet.

In the early 2000s, he had already bought Havas agencies, then the network of tour operator Jet Tours, two French groups that had their heyday in the 80s and 90s.

A few years later, in 2011, the group went through a severe turbulence zone because of the Arab Spring in Tunisia and Egypt, which chilled many European tourists.

The merciless market

He approaches bankruptcy the first time and owes his salvation to a new injection of money from his creditors, which increases his debt and will force him to spend hundreds of millions of pounds in interest.

Thus weakened, it faced for two years a new storm between the uncertainties of the Brexit, which encouraged many tourists to postpone their holidays, the fall of the pound, which weighs on his accounts, and a heat wave that prompted many Europeans to spend their holidays near their homes rather than looking for the distant sun.

The group has multiplied warnings on results and increased its losses, the action collapsed: it was worth only 3.45 pence, 0.0345 pounds, Friday night, against 1.2 pounds early 2018.

That did not stop the leaders from pocketing some 20 million pounds over the past five years despite their inability to get Thomas Cook back on track, the British press reported.

Coup de grace

The announcement in the spring of a takeover of the tour operator business by the Chinese Fosun, already owner of Club Med, has given back some hope. Creditors had to take over the airline for nearly a billion pounds as part of the deal.

But that was not enough for some donors, especially the banks RBS and Lloyds, who demanded at the end of last week that the group finds 200 million pounds more to ensure its survival until November 2020 .

“Banks cut him off,” says Wilson.

From a source close to the file, beyond the banks, it is the same assembly planned with Fosun which raised doubts, some judging that there was much to lose as the situation of Thomas Cook had become precarious.

As a result, despite last-minute meetings held in London over the weekend, no one wanted to put more money, especially the Conservative government, which does not intervene in case of bankruptcy. a private company.

Government support for Thomas Cook, nationalized between 1948 and 1972, “would have kept it afloat only for a very short time,” the Minister of Transport, Grant Shapps, told the BBC on Monday.

According to him, “the group had profound difficulties to evolve in the travel sector which has moved away from downtown agencies to turn to online bookings.” The group’s 22,000 employees, including 9,000 Britons, could pay the price.

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