Thomas Cook fights to avert collapse

Thomas Cook on Sunday morning is holding last-ditch negotiations with major players in a bid to avoid a collapse that will affect 150,000 UK holidaymakers abroad and put 9,000 British jobs at risk.

The British travel company is at risk of falling into administration imminently unless it finds £200 million ($12.25 million) in extra funds. The government and the UK aviation watchdog are preparing to launch a rescue plan codenamed Operation Matterhorn.

UK Foreign Minister Dominic Raab said the government had contingency plans in place for passengers in case rescue talks failed, and sought to reassure holidaymakers that they would not end up stuck overseas. However, he downplayed the prospect of a government bailout for the firm.

“We would wait to see and hope that [Thomas Cook] can continue but in any event, as you would expect, we’ve got the contingency planning in place to make sure that in any worst-case scenario we can support all those who might otherwise be stranded,” Raab told the BBC.

The last-ditch meeting was taking place as holidaymakers at a hotel in Tunisia reported being locked in by security guards as the hotel demanded extra money amid fears that it would not be paid by Thomas Cook.

Thomas Cook continued to reassure worried customers on Saturday night that their flights continue to operate as normal and all their package holidays are protected under the Atol scheme, which guarantees holidaymakers’ bookings.

However, tourists at the Les Orangers beach resort in the town of Hammamet, near Tunis, said their hotel rejected to let guests leave while demanding extra money.

Ryan Farmer, from Leicestershire, told BBC Radio Five’s Stephen Nolan show the hotel had on Saturday afternoon summoned all guests who were due to leave to go to reception “to pay additional fees, obviously because of the situation with Thomas Cook”.

With many tourists rejecting pay on the grounds they had already paid Thomas Cook, security guards were keeping the hotel’s gates shut, refusing to allow guests out, or to let new visitors enter.

“We can’t leave the hotel. I’d describe it as exactly the same as being held hostage,” Farmer said.

The Transport Salaried Staffs Association (TSSA), which represents workers at the company, said the British government should be prepared to assist with “real financial support”.

General secretary Manuel Cortes called for an urgent meeting with the business secretary, Andrea Leadsom. However, a government financial rescue is thought highly unlikely.

Cortes said in a letter: “It is incumbent upon the government to act if required and save this iconic cornerstone of the British high street and the thousands of jobs that go with it.”

The shadow business secretary, Rebecca Long Bailey, said: “This is yet more evidence of this government’s indifference to British jobs and businesses going under. All viable options must be explored by Thomas Cook and the government must put into consideration stepping in and taking an equity stake to avoid this crisis.”

It is understood that Thomas Cook has approached the British government in an attempt to plug a gap in its funding.

A government spokesman said: “We recognise it’s a worrying time for holidaymakers and employees.

“The financial circumstances of individual businesses are a commercial matter, but the government and the Civil Aviation Authority are monitoring the situation closely.”

Sunday’s crisis meeting is understood to be taking place at City law firm Slaughter & May. Among those understood to be attending will be the firm’s biggest shareholder along with creditors.

Source: The Guardian