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Dominic Raab Says Customers Won't Be 'Left Stranded' as Thomas Cook Group Looks for Extra Funding

CC BY 2.0 / Riik@mctr / An Airbus A321 aircraft of the Thomas Cook carrier at the Manchester Airport (File photo).
An Airbus A321 aircraft of the Thomas Cook carrier at the Manchester Airport (File photo). - Sputnik International
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It was revealed earlier in the week that Thomas Cook could fold by Sunday night, leaving thousands stranded unless an extra £200 million of funding can be found.

While speaking to the BBC on Sunday, UK Secretary of State Dominic Raab assured holidaymakers that they will not be left stranded if Britain's Thomas Cook goes under.

He explained that the government has "contingency plans" to avoid people being stranded while being interviewed by Andrew Marr. He also said that it's unlikely that they will step in to save the firm unless it is in the "good strategic national interest" to do so.

The potential collapse of Britain's oldest travel agent could trigger a repatriation operation never before seen in peacetime in Britain, with around 165,000 holidaymakers in need of being flown back to the UK.

The rescue exercise would be carried out by Britain's Civil Aviation Authority and code-named 'Project Matterhorn.'

It was reported by Sky News that Thomas Cook requested an increase of £200 million in funding on Sunday, just hours before the company potentially folds.

The proposal, which is now under consideration by the company's lenders, would help prevent the company from collapsing on Monday and could allow Thomas Cook to survive the winter period.

An increase of £200 million would bring the package from £900 million to £1.1 billion. With £450 million from China's Fosun and other lenders already promised.

Discussions regarding a possible rescue continued throughout Sunday afternoon at Latham & Watkins office. The fact that the talks were ongoing is positive for the company but Thomas Cook's fate was still hanging in the balance, according to anonymous inside sources.

Unless a deal can be struck to save the company by this evening, board members will appoint administrators from AlixPartners, a consulting firm which specialises in corporate renewal. 

Credit card companies have also been asked to release £50 million in cash as collateral in case the company folds, as reported by Sky.

Numerous alternate plans including a buy-out from Triton Partners which would have seen the British arm of the company collapse, fell through over the weekend. Additional discussions with CQS Management to provide a bailout have also been rejected in recent weeks.

Shadow Business Secretary, Rebecca Long Bailey, said on Saturday: “This is yet more evidence of this government’s indifference to British jobs and businesses going under.“No British government in its right mind would countenance the loss of so many jobs and the prospect of just one major travel operator – TUI – controlling the mass market.” 

“All viable options must be explored by Thomas Cook and the government must consider stepping in and taking an equity stake to avoid this crisis.”

© AFP 2021 / Franko Lee ClubMed holiday brochures at a Chinese tourist agency in Beijing
Dominic Raab Says Customers Won't Be 'Left Stranded' as Thomas Cook Group Looks for Extra Funding - Sputnik International
ClubMed holiday brochures at a Chinese tourist agency in Beijing

The Transport Salaried Staffs Association (TSSA) union, which represents Thomas Cook staff, has also urged ministers to bail out the company to prevent British tourists becoming stranded.

It was first reported on Thursday by Sky that that the company is expected to fall into administration around Sunday night, which risks 20,000 jobs across the company, 9000 of which are in the UK.

Thomas Cook's financing requirements have had to be increased several times in recent months due to weak trading, which the company blames on uncertainty surrounding Brexit.

 

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