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Thomas Cook Could Go Bust In Days If It Doesn't Secure £200 Million

Thomas Cook Could Go Bust In Days If It Doesn't Secure £200 Million

Thomas Cook, Britains oldest travel agent, could go bust as soon as Sunday if it does not secure a £200 million salvage deal.

The 178-year old tour and flight operator has nearly secured a £900 million rescue deal lead by Chinese firm Fosun, owner of Club Med, late last month.

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However, it's lenders including RBS are now demanding another £200 million buffer.

Credit: PA
Credit: PA

If not secured, the holiday firm could go into collapse as soon as Sunday - leaving 150,000 Brits stranded and thousands more losing flights and holiday packages.

A source told the Daily Mail that officials in the Department for Transport and the Civil Aviation Authority have drawn up plans for what could be "Britain's biggest peacetime repatriation" known as Operation Matterhorn.

This involves getting hundreds of thousands of holiday makers home, something officials are saying could take two weeks.

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Costs of repatriations could cost the company pup to £600 million.

Credit: PA
Credit: PA

What's more, over 9,000 British jobs could potentially be lost, and 21,000 worldwide.

"Around 20,000 staff worldwide will lose their jobs and it will have a knock on effect to travel agents worldwide as cruises will also be affected as they may also lose their licence," a source said.

"Several thousand passengers on cruises may also have holidays cut short, stopped part way through holidays and needing assistance in returning."

Despite taking over £10 billion in revenue each year, Thomas Cook has struggled to run profitably.

The travel company has been suffering mounting debts to the tune of £1.2 billion, reported in its half year results in May.

It has also been fighting with a new wave of online tour operators - including Tui and Jet2 - leading them to cut prices.

If Thomas Cook cannot secure a salvage deal or RBS do not back down, the board will have to call in administrators within days.

Credit: PA
Credit: PA

What do I do if I'm affected?

If you have a holiday booked with Thomas Cook, don't panic just yet.

Holiday packages with the film are Atol protected (which stands for Air Travel Organiser's Licence) meaning you would be refunded for holidays that do not happen.

However, Atol does not apply if you have booked flights or accommodation separately. In this case you may have to claim back costs from your credit or debit card provider.

For credit card payments, you are protected for between £100 and £30,000 under Section 37 of the consumer credit card act. The laws mean your credit card must protect purchases over £100 for free, so if there's a problem you could get your money back.

Credit: Pexels
Credit: Pexels

Debit card payments work slightly differently, in that it is down to the card providers discretion to provide a refund and not a legal requirement.

The little-known process called a chargeback gives you the chance to get your money back if you bought faulty goods, a service wasn't provided, or the company you bought something from went bust and your goods weren't delivered.

According to Money Saving Expert, this sees your bank ask for the refund from the supplier's bank, not the supplier itself, meaning the money should come back even if the retailer has gone bust (though this isn't guaranteed).

It works similarly to Section 75, in that - while not a legal protection - it makes the bank jointly liable with the retailer should something go wrong.

Chargeback works with Visa Debit, Maestro, Visa Electron and MasterCard Debit.

Credit: PA
Credit: PA

As it happens, I booked a £400 flight with Thomas Cook mere weeks ago so this news really affects me.

Having booked on debit card, I got in touch with my bank, Monzo, to ask about a chargeback. They explained: "A chargeback is a process where we dispute a transaction you made on your [bank] card. We will raise this on your behalf with the merchant, and hopefully help you get your money back."

Monzo advised I would need to provide receipts, dates the transaction was made as much evidence as possible in order to make the claim, while adding "not all are successful".

In a statement today, Thomas Cook said: "Discussions to agree final terms on the recapitalisation and reorganisation of the company are continuing between the company and a range of stakeholders.

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"These discussions include a recent request for a seasonal standby facility of 200 million pounds, on top of the previously announced 900 million pounds injection of new capital."

Featured Image Credit: PA

Topics: Life News, News

Ciara Sheppard

Ciara is a freelance journalist working for Tyla. After graduating from the University of Sussex, Ciara worked as a writer at GLAMOUR Magazine and later as the Assistant Editor of Yahoo Style UK.

 

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