June 3, 2009

Thomas Cook in trouble?

Was really surprised to read that the parent company behind Thomas Cook is in trouble:

The German majority owner of travel firm Thomas Cook has warned it could go into administration within weeks until it gets emergency loans from Berlin.

However, there are increasing signs from both the German government and the European Commission that state aid will not be forthcoming for Arcandor.

Both Berlin and Brussels have indicated that the firm is ineligible because its troubles pre-date the global recession.

However, Arcandor’s troubles are not expected to affect the travel company.

A Thomas Cook spokeswoman said it was “completely ring-fenced” from Arcandor.

Arcandor has asked the German government for 650m euros ($930m; £561m) of loan guarantees, and a direct credit line of 200m euros.

The German government has a 100bn-euro fund to provide temporary loans for firms hit by last year’s financial crisis and its aftermath. But this does not apply to companies that first got into difficulties before 1 July 2008.

It’s interesting to see the suggestion that Thomas Cook is safe from the parent company problems, though it remains to be seen if its borne out.

With the collapse of XL last year - one of the biggest operators in the UK - it has to be said that a major concern for anyone going on holiday now, is whether their tour operator will go bust and leave them stranded.

Ironically, I used to think that Thomson and Thomas Cook were too big to fail - but as we’ve seen through the current credit crisis, there’s no such thing.

Here’s hoping those going on holiday with Thomas Cook this year don’t face any problems due to the parent company being in trouble - best of luck to you all.

Filed Under Tour Operators