NEW DELHI: British travel firm Thomas Cook declared bankruptcy on Monday, leaving hundreds of thousands of holidaymakers stranded in many countries.
The world’s oldest tour operator, whose roots go back to 1841 and which has been a travel agent to many Indian Maharajas, went bust after last-ditch talks to raise funds failed. However, experts say it may not have a big impact on India. “The impact on inbound tourist traffic will not be that big because the brand doesn’t have a very big India account any longer,” said Sarabjit Singh, MD, Travelite India.
Operations of its erstwhile subsidiary Thomas Cook India will also continue unaffected since the unit is no longer part of the Thomas Cook group, having been sold fully to Fairfax Financial Holdings in 2012.
However, for Thomas Cook UK’s Indian partners (hotels, tour operators) and customers flying into the country on its packages, the collapse is set to make things very difficult. "If one firm in the value chain can no longer pay its bills, the whole chain collapses," said Bebasish Chatterjee, director, Business Travels.
Goa, a popular winter vacation for the British who flock to the state to avoid the freezing climate in their nation, could take a hit, according to reports. "Thomas Cook has been operating for the last 25-30 years in Goa. And losing out on Thomas Cook is a big, big blow to the industry," Savio Messias, president of the Travel and Tourism Association of Goa, was quoted as saying.
According to him, UK-based Thomas Cook ferried 2,000 tourists every week to Goa last year.While Thomas Cook India is unaffected, spooked investors selling the stock led to the scrip falling 1.82 per cent on the BSE despite the company’s chairman Madhavan Menon clarifying it has no connection to the former parent firm. “Post transfer of its entire stake in TCI to Fairfax, Thomas Cook UK ceased to be the promoter of TCIL from the said date, and since then Thomas Cook UK has had no stake in TCIL,” Menon said, adding that TCI was currently debt-free.
The United Kingdom contributed 8 per cent of all foreign tourist arrivals (FTAs) to India last month, out of a total FTA of 7,98,587.
Over 6 lakh tourists, of which 1.5 lakh are from the UK, have been left stranded across the globe after negotiations to secure £200 million to rescue the debt-ridden brand failed. Thomas Cook UK has a debt of £1.7 billion on its books. The UK government has mounted a repatriation operation to fly back its stranded citizens.
We are sorry to announce that Thomas Cook has ceased trading with immediate effect.
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— Thomas Cook Cares (@ThomasCookCares) September 23, 2019
TIMELINE OF FAULT LINES
MAR 2015 - Chinese conglomerate Fosun buys initial stake. Group returns to profit for the first time in 15 years but warns of an “unprecedented level of disruption” in the travel market
JUNE 2015 - A mass shooting in a tourist resort in Tunisia hurts demand for holidays to the country, one of Thomas Cook’s main destinations
NOV 2018 - Uncertainty over Brexit and competition eating into its market share force Thomas Cook to issue back-to-back profit warnings
MAY 2019 - Reports a record loss of £1.5 billion
AUG 2019 - Staves off disaster as it agrees the main terms of a £900 million rescue deal with Fosun, its biggest shareholder, and its debt holders
SEP 2019 - Thomas Cook collapses after talks with lenders, shareholders and the UK government fail to piece together a rescue package