Forum Topic

Thomas Cook

Something I don't understand.Why are all TC's planes grounded? Surely it'd make sense to let the company fulfill it's obligations and fly customers home per schedule rather than let the CAA scramble around finding planes and repatriating people to eg Birmingham when they expected Glsgow.

Simon Knight ● 2606d12 Comments

As I understand it the ones that TC leased are still flying and being used as part of the exercise as they owned by other companies. As TC is now insolvent and is being wound up by thge official liquidator the ones it owns can't be flown as 1. The planes could be impounded by foreign airports as security against unpaid bills for fuel, landing fees, etc 2. I assume its operating licence is now void. If it had gone into administration rather than liquidation I understand it would be allowed to operate until the administrator found a buyer or decided it had to be wound up. That's a laypersons view, not a legal or accounting one! 

Michael Ixer ● 2606d

The aircraft have been seized by the official Receivers / liquidators.  I guess it would be possible for the government to pay for the air crew, fuel and airport fees to keep them going for a week or two, but it would be a complicated arrangement and they'd need the cooperation of the Receiver.  It would take time to organise, which is no help to those who need to come home immediately.

John Gorst ● 2606d

I can understand if a plane is impounded abroad as surety there it stays until bills are met. But as for operating licence being void...unvoid it until people are brought back.As said it just seems to make no sense that prior to liquidation TC had a planned flight schedule that now can't be implemented because of "this". It must be cheaper and less hassle for CAA to pay for fuel etc and let TC fulfill and get people home.

Simon Knight ● 2606d

I understand that, but planes sitting on the apron in Manchester serve no purpose. Nobody disputes the planes aren't owned by the creditors but it must be to their advantage to hire them out with the CAA picking up the taxes, cabin crew wages, fuel etc.

Simon Knight ● 2606d

Simon. I've not been directly involved in a receivership, fortunately, but I have been on the sidelines of some; they're not necessarily fair, can be brutal and strict rules apply. The liquidator has to follow strict rules and his/her job is to gain as much as possible for the creditors. No saying that's right or sensible but I guess the strict laws are to prevent fraud, such as further debts being incurred that can't be paid. My understanding is that to be used the planes would need to be sold to another owner and I suspect that can't be done quickly? Another point is that the company is (as far as I know) incorporated under English law so the receivership will be carried out in accordance with English law. I suspect the receiver wants as many assets in the UK to avoid cross jurisdiction issues and costs. 

Michael Ixer ● 2606d

I have a passing interest in the subject as before retirement I was Operations Director of a large tour operator responsible for aircraft charter. I asked this question of the CAA when Monarch went under but never got an answer. To the layman it would certainly seem much easier, more sensible and certainly cheaper for the CAA to arrange some sort of temporary operating and insurance cover and use the 37 aircraft that TCA owned (according to the website) rather than charter in 40 aircraft from outside. If the CAA can guarantee hotel payments why cant they guarantee overseas airports the same?The meeja are quoting a cost of £600 million to repatriate 150,000 passengers which equates to £4,000 per head. Maybe that £600m includes bringing home TC's European customers. That's still £1,000 per person - which is a lot considering that TC will probably have costed in about £150 in their holidays for a short haul flights. PS Will someone please answer the question - what is the plural of aircraft? I've always maintained it's 'aircraft' but I've seen 'aircrafts' used a lot today.

Hugh Walton ● 2606d

"what is the plural of aircraft? I've always maintained it's 'aircraft'"Me too. "When referring to vehicles, “craft” is both singular and plural. Two aircraft, many watercraft, etc. Do not add an “S.”"https://brians.wsu.edu/2016/05/31/crafts/

David Ainsworth ● 2606d

Aircraft.  Simon, totally agree, but I guess the whole thing has fallen into a black hole of bureaucracy.For anyone who has flights booked with TC in the future (moi), this is my experience.  Checked the small print on my confirmation, the bits we never read and it said clearly not covered by ABTA. Called TC phoneline and their message is call ABTA... no point.Called my credit card company I paid with (Amazon/Mastercard) and they were fine, sending a form and the decision might take a month or so.  Booked new flights with TUI in the meantime (fingers crossed!).  In the meantime got a text from Barclaycard to say "we see you have booked with TC in the past, are you OK" (basically).  Who knew banks could be so nice?

Bunny Payne ● 2606d

@Hugh. I guess this is really one for the lawyer? Its interesting that holiday companies normally take payments in advance but don't seem to pay hotels so expeditiously. I can see the business sense in that if one's got the negotiating power to do it but it does leave customers in a precarious position. When "the government" in the guise of the CAA says it's paying I assume it's dipping into the ATOL fund which I thought travel companies paid for? (A a bit like the FSCS in the finance sector.) 

Michael Ixer ● 2606d

Yes - holiday companies will normally take your money 8-10 weeks before departure but won't typically pay the hotel until after you've left. They may of course had to pay advance deposits but yes, it does leave holidaymakers in a difficult position. As I understand it, the CAA will pay for accommodation only from the date that TC went bust so if the hotel extended credit to TC for earlier guests, they probably will never see it.  So if they're demanding money now it's actually to cover for guests who may have been in the hotel weeks before.When you book an ATOL covered holiday the price you pay includes £2.30 pp contribution into the ATOL fund to cover repatriation of guests covered by the ATOL. People who booked flight only typically won't have their return flights covered by ATOL and in theory should have to pay for them. However, a precedent was set in the Monarch failure when the Government did pay for everyone ATOL or not to be repatriated. I guess the same will happen again this time. Boris has enough other things to worry about than a few thousand holidaymakers.Incidentally I saw on a travel website today that Jet 2 are charging £982 per person one way for a Newcastle Larnaca flight next month. Nice money if you can get it.

Hugh Walton ● 2604d

Last I heard the German branch of Thomas Cook was still operational as was the French branch. There is also a Directive from the EU which may be relevant  see the link belowhttps://www.euractiv.com/section/economy-jobs/news/thomas-cook-collapse-will-put-new-eu-directive-to-the-test/?utm_source=EURACTIV&utm_campaign=142b617812-RSS_EMAIL_EN_Daily_Update&utm_medium=email&utm_term=0_c59e2fd7a9-142b617812-116228987

Katrina Black ● 2604d

Looks like the German subsidiary has now filed for insolvency, although its unclear what the impact of that is on customers...https://www.bbc.co.uk/news/world-europe-49824427

Michael Ixer ● 2604d