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Thomas Cook collapses, stranding 150k UK holidaymakers (theguardian.com)
309 points by daanavitch 21 days ago | hide | past | web | favorite | 278 comments

I guess as they've gone bust I can tell this story now ... I used to consult for Thomas Cook about 15 years ago, and they were a basketcase of a company even back them, so this doesn't surprise me. I feel sorry for all the reps and workers out in the field and on the planes who will lose their jobs because of the profligacy of the Peterborough head office.

Two examples of stupidity stick with me. One was that at the time they outsourced their website to their main competitor. Which as you can imagine worked well because their competitor had no desire at all to fix the many problems with the website. TC didn't understand that the website was everything because they were at heart a high street travel agency.

The other was when I worked on managing their AdWords account, which was enormous (like 100K different keywords in thousands of groups). Some keywords would be bid at £10s of pounds. It is very easy to lose a lot of money on these keywords because there's a fine balance between the profit you make on each holiday (usually £100-ish), versus paying a large amount of money on each keyword and the number of sales you make at the end of the "sales tunnel". There was also a weekly industry survey which came out ranking the position of all the travel websites according to number of visitors (I forget the name of it). Senior managers at TC were fascinated by "being number one" on this survey every week, and so would instruct us to dial up the keyword bids on Friday night and run like this over the weekend. Google AdWords with high bids is very effective at bringing large numbers of low quality visitors to the website.

Each week they would indeed come number one on this survey (read only by other senior managers in the travel industry), while at the same time losing tens of thousands of pounds selling holidays for negative profit.

This brings back memories... I was the technical half of a two person team who built the very first Thomas Cook website in 1995. Of course, e-commerce was a step too far at the time, but there was much excitement when the spec for HTML frames came out mid-project (don’t judge).

> e-commerce was a step too far at the time

I remember those times. A number of companies in the UK saw web-sites as extensions to their teletext based advertising, just with more information density and a few small pictures (emphasis on both few and small: most of their customers were using ~28k8 connections at home and/or overcommitted shared connections in collages & libraries). You were sill expected to phone in your order, or physically go to your local branch, once you had seen something that took your fancy.

eCommerce was happening at that point (Amazon started in '94 IIRC, and the gambling & other adult entertainment industries were already actively making moves in that realm), but it was in its early days and far from trusted by either the public or many companies.

Ha I can recall in early 95 excitedly explaining to our customer in BT that we had Tables for layout and could change the background colour now

This was an intranet site was launched in 94, we don't talk about bt.com

28.8Kbps dialup was a different time. I think teletext holidays were popular then.

There’s no shame in HTML frames in 1995.

Frames reloading in background is how I managed to create some interactivity before XMLHttpRequest. No idea if there would have been some better way at the time.

As one who specialises in enterprise SEO.

That is still an issue with many businesses, websites are still seen as just an electronic version of a poster on a bill board, its gradually changing.

And Eu companies are even worse, a few years back I suggested a link from a German parents website to the uk subsidiary and was told the Head office lawyers where checking to see if they "where allowed" to add a link.

In German law, if you add a link to another site somewhere on your own site, you take responsibility for the content on the site you link you. You are required to check for that or face liability. This the result of years of court cases around this matter. And courts don't usually understand much about the web, let alone tech in general.

So while involving lawyers every time is definitely high on the CYA scale, it may make sense to run some instances by a lawyer to be safe(er). The subsidiary's website shouldn't generally be much of a problem, though.

Even in the US I’ve had pushback from lawyers about external links from websites and other official content. The idea is that it’s something of a tacit endorsement.

Yes it’s being conservative but the lawyers definitely prefer fewer links where possible and I’ve had them ask me to remove quite a few.

I am very curious to know if the rule of "being responsible to the link a website links to" applies transitively, i.e. a link in the link my website link to. If applies, then can the law be interpreted as my website needs to be responsible to the entire internet. On the flip side, if the rule only applies to one layer deep, then a url shortener would defeat the whole law

The rule applies to the content you end up seeing after your browser follows all automatic redirects and possibly even interstitials (ads/disclaimers). Redirects are an irrelevant technical detail in this context.

Are they expected to continually monitor the linked website? What happens if they add the link and then a week later something "bad" is added to some sub-page of the linked website?

A quick search seems to indicate that yes, you might be responsible for linking to the altered content. As a website author you have - in principle - a duty to check what you are linking to. It is unclear what that means in practice. I would guess that it would involve a test if timely detection of alteres content on the linked site would have imposed an undue burden. The only part that is absolutely certain is that a website owner must react if they are notified that they are linking to illegal content. Other than that, it's seemingly a grey area.

So how many times have each of the search engines been sued?

Guess why the remaining search engines are so good at classifying certain types of sites of the "adult entertainment" and and other such types?

I am not sure if the courts distinguish between automatically generated pages and authored/curated content that involves human input in its creation. Courts haven't been exactly consistent on these points.

Plenty of times. Have you ever seen a notice from Google referencing chillingeffects.org at the end of your search results?

Has ever happened and does this also cover newspapers?

Yes, I remember a high profile German tech news site involved in at least one such legal battle. If memory serves, it revolved around a link to Alcohol 120%, a tool to rip copy protected disks. The news site lost the case, I think.

Well duh linking to software with an illegal use is not the same as linking to a site that sells freezer cabinets to super markets and comer stores.

Though I'd read a pretty good write up of their AdWords tactics recently and learned a fair bit: https://marketingexamples.com/seo/step-by-step-keyword-resea...

that's a german legal liability thing. not (just) european business generally being stuck in the 90s

What linking to your uk subsidiary?

Was that the 1890's they are stuck in :-)

Almost. 1930s and 1960s. That’s what I hear from my German wife.

Most British companies I’ve seen operating appear to be an absolute mess from the inside. It’s funny that the British have the Northern European credibility in business but I don’t think they’re anywhere close as efficient or organised as the Germans or the Dutch. This is just personal experience but I’ve come to realise it seems to be the norm that British management is overall terrible.

From my personal experience: there are huge German companies that are terribly organized. Inefficient or just stupid processes are being kept up out of tradition often headed by some senior who knows it the best and whos decisions are not being questions "because he's/we've been doing it this way for ever now".

Generalizations don't help here. There is idiocy in companies and my feeling is that the bigger they are, the worse it gets.

Incorrect (Or have you sources?).... the issue is old legacy based companies. No matter where they are based.

Legacy as in business systems, business thought process, legacy IT, etc.

TC is a very old company

There are also old companies who manage to keep up and innovate, and care about competence. Not as much as tiny startups, but enough to survive and do well.

One problem with the British upperclass, is that they tend to be educated at private schools like Eton, where they primarily learn confidence. So tons of British politicians and managers know how to appear to know what they're doing, without actually knowing what they're doing. As long as things are going well, this works fine, especially since the people they do business with come from the same schools. But when the shit hits the fan, it turns into a fumbling circus. Like it did with Tories and Brexit.

>One problem with the British upperclass, is that they tend to be educated at private schools like Eton, where they primarily learn confidence.

Not limited to the British upper class. It's astounding how far someone can go in life by simply being confident, charismatic, and articulate (and tall) despite being completely full of shit.

And from what I understand, those are exactly the skills they teach you at schools like Eton. Well, maybe not being tall, but certainly the other ones.

I think the world would do well to try to inoculate itself against this sort of superficial confidence. It's way too effective, with frequently harmful results.

As examples please see Elizabeth Holmes/Theranos or Adam Neumann/WeWork neither of whom were Eton educated.

I don't think it is an issue just with people educated in certain schools.

The school is quite important depending on the fraud being perpetrated. Holmes doesn't get nearly so far without the Stanford (or equivalent) tag on every propaganda puff piece the media wrote to promote her.

Elizabeth Holmes, genius dropout of Marshall University - it just doesn't raise a billion dollars in venture capital quite the same way (even with her connections to people like Draper). She was sold as the next Bill Gates (or Zuckerberg), and the next Bill Gates must drop out of a prestigious school too, because she's so brilliant and her mission is so important she must be getting on to The Big Thing. Even Stanford could not contain her. The elite school is required to sell that fraud.

WeWork by comparison is an actual company with actual revenue ($3 billion for 2019 perhaps). It's just not worth anywhere near what the pumped up VC numbers were attempting to keep inflated. Maybe in liquidation its worth $500m, maybe it's worth $3b. Theranos was not a real company, it had no real products (going by the book Bad Blood), it had no consequential sales. Neumann was selling a different sort of fiction than Holmes (both were fiction mind you).

Both of them achieved their inflated valuation through a cult of personality of the leader. That's the same thing we see with Trump and BoJo in the UK

As basketball analysts like to say, you can’t teach height.

But eton does teach kids to stand up strait.

You can teach the appearance, use, and effect of height.

It's dumb that people are picking on that word out of the overall comment like it was some kind of mistake. The comment was about the nature of the appearance of competence, and height is one element that has an effect on how people perceive another person, and there are countless teachable things about that.

> Not limited to the British upper class. It's astounding how far someone can go in life by simply being confident, charismatic, and articulate (and tall) despite being completely full of shit.

I've gotten a similar vibe from a lot of graduates of prestigious US schools. Very confident, fairly confrontational style of conversation. I'd actually kinda like it if I hadn't learned through feedback and midwesterness to do basically the exact opposite. I'd guess it's especially strong in those who've been through seminar-style prep schools (which is most of the "good" ones, as I understand it) before going to university.

> It's astounding how far someone can go in life by simply being confident, charismatic, and articulate (and tall)

That's funny how much it describe my brother, even if he's not upper class and went to a not particularly prestigious school (called ESTP). In his case, he was already quite confident and charismatic before leaving high school.

> despite being completely full of shit

he's not completely full of shit, but I wouldn't in a thousand years work for him.

This is not limited to the UK

I dont even know where to start with this comment.

> One problem with the British upperclass, is that they tend to be educated at private schools like Eton, where they primarily learn confidence. So tons of British politicians and managers know how to appear to know what they're doing, without actually knowing what they're doing.

Having worked with certain interested underwriters from Lloyd's, it was an easy upvote for me.

I agree that in politics that type of idiot is particularly over-represented, however it is unfair to assume this is the case with most managers in the UK. Perhaps it is because I have worked for and with competent UK managers who have no public school background, so the generalisation that this applies to tons of people is inaccurate. I am not defending the Eton educated upperclass just saying that they hardly represent the majority of managers employed in the UK.

I didn't mean to imply that all UK managers or politicians are like that, just that there's a segment that's coming from these schools that train primarily for confidence rather than competence. And they try to help each other to these positions of power in order to maintain the system.

It's not universal for all UK politicians and managers, and it's not unique to the UK, but their system of mediocre elite schools that seems to train specifically for confidence, does make it more blatant.

You can start by agreeing with it. It's not just true, it's the fundamental reason the UK is in the mess it's currently in.

The statement may be correct if it was limited only to Eton educated politicians. As it isn't it is an unfair generalisation on mangers, many of whom are not Eton educated

Could you try? As a (maybe naive, not upperclass) British citizen it seems pretty reasonable.

I just think it could be applied to UK politicians who are predominantly privately educated and incredibly out of touch, but it is a stretch to think that most company managers are privately educated. Particularly because in the car of Thomas Cook the CEO is a German educated Swiss man.

Prior to that is was run by a woman, who was not Eton educated. So basically the comment is a generalisation that cannot even be applied to this specific instance.

The only thing it can be applied to fairly is the British political class, who in general would adhere to it.

Its quite true look at the Mess Cameron and Johnson have created and all the other PPE Oxbridge grads.

I don't disagree with that, British political class certainly fits the generalisation made by the GP, but it can't be fairly applied to business managers. Thomas Cook was run by a Swiss guy educated in Germany.

Company being old certainly does not mean it needs to be full of legacy systems and business processes. It only means that the company's management is not competent at evolving the company's processes and systems, which means it will eventually fail regardless of being a fresh startup or centuries old going concern.

Bosch, Siemens, Bayer, BASF and Carl-Zeiss are all examples of over hundred year-old German companies that continue to innovate at the cutting edge of their industries and are massively profitable.

Minor nitpick: Volkswagen isn't over a hundred years old at all.

It might not be entirely inaccurate to say that they have survived a thousand years, but those were the shortest thousand years in history.

Hah! Thanks, edited.

It might be also said that their innovation most recently has focused on some less-than legal technologies. But innovation it is, nonetheless.

Those companies innovate and do well but they're not online businesses. They sell specialized niche high tech physical goods not digital services.

What about IBM? Founded in 1911, $13B profit in 2018. Most successful company in several online business sectors.

What about Nokia? Founded originally in 1865 as a paper mill, re-invented itself multiple times in countless different industries, before becoming the leading mobile phone manufacturer in 1990s and 2000s. They did eventually indeed succumb to their failure to evolve, but a more competent management post 2006 would have likely saved the company.

Then there's Nintendo, founded in 1889. They originally started making playing cards, eventually branching to toys and then video games.

Google isn’t helping me here, other than mainframes which sectors does IBM dominate?

Not online they wont

Bank of England, arguably the ultimate in legacy business at the heart of all business types, are investigating the benefits of the most recent tech developments, namely cryptocurrency. Is it a legacy business issue or simply and ultimately a multitude of factors including bad management with ego's getting in the way which doesnt make a nice easy to read story or account of events?

I'm not suggesting the original poster is incorrect with their account of events, lack of the right investment is something many people can identify in their own line of work, its just timescales to a point of failure can be variable. Likewise bleeding edge technology is not always beneficial for all, but holding back or testing the water and constant monitoring is required to avoid expensive mistakes.

https://www.bankofengland.co.uk/research/digital-currencies http://www0.cs.ucl.ac.uk/staff/G.Danezis/papers/ndss16curren... https://www.telegraph.co.uk/news/2017/12/30/bank-england-plo...

This seems more like experience with certain kinds of companies - I've worked with companies around the world and there are certain anti-patterns I've experienced everywhere which really have little to do with the nationality of the management. For example, idiot CEOs, nepotism and micromanagement are, unfortunately, international phenomena.

That’s too bad. Being Portuguese for some reason I thought some countries would be better than others. The British tendency to be indirect and weird about being straightforward (people like that are called “rude” if they work in a majority southern English company) doesn’t help.

>it seems to be the norm that British management is overall terrible

What an incredibly spurious, over-generalised anecdote.

He did take pains to specify it was just his experience. And even the fragment you quoted tries to be diplomatic by saying "it _seems_ to be"

> What an incredibly spurious, over-generalised anecdote.

Could be. I'd like to hear what evidence, beyond this one news story, informs the OP's generalization.

The history of Ireland makes me think it's not as anecdotal as some would like. ;)

Edit: I really hope that the people down-voting this just don't like the joke. If they think British rule of Ireland was good for Ireland or was in any way high quality that is far more concerning.

> don't like the joke

this was an attempt at humour? work on those bits some more at the comedy club

Suddenly Google's ad profits make a lot more sense.

When I worked in this field (and I must stress that this is 15 years out of date anecdata), my impression was that Google's profits came from a mix of a large influx of naive new users, and established companies with misaligned incentives.

By "misaligned incentives", I mean that we were rewarded with a % of ad spend. This is very common model in the old advertising industry, and AdWords was treated as adverts, not as a technology proposition. Of course this meant that we had very little financial incentive to reduce the ad spend.

A more aligned structure would have been to reward percentage of profits, but companies were reluctant to reveal their profit margins to a third party, and third parties couldn't trust their clients to report this data correctly anyway. Hence percentage of ad spend was what everyone used.

Percentage wouldn't necessarily be so bad, except that there's a certain base cost to setting up and running all of those systems. At some point getting someone to up their spending 10% has very little incremental cost. It would be far cheaper than trying to reduce overhead.

So now you have perverse incentives on perverse incentives.

And if you don't look at it too closely then you can feel good about all the money you're making helping people slowly self destruct. Your parasitism is perfectly justified by the mad stacks of cash you're making.

There's only two ways to get that much money. Do something really really good (at which point you probably will give a lot of that money away), or do something really really bad. If your company has to talk about 'evil', it's probably in the latter camp and always has been.

If you go with Google's suggestions when you setup an Adwords campaign, they will absolutely rinse your budget with minimal return. Google has a churn and burn mentality when it comes their Adwords customers as most new businesses fail within 12 months.

Absolutely. Two things I remember (from back in 2005) were:

Campaigns defaulted to worldwide. You've got some naive new user selling for example hand painted dolls to a UK audience. They sign up for AdWords, and get a huge influx of visitors, yet nobody is buying. Why? Because the website doesn't and cannot sell to all these new US and worldwide visitors. The thing is the seller is an expert in dolls, not SEO, and has no idea what is going on.

You can set a daily limit on ad spend, which is nice, but it means that your advertizing works really well for that niche midnight - 5am visitor profile, but doesn't actually bring in local buyers who are awake at normal times. Again, the naive AdWords users usually have no logging or stats (and if they do they wouldn't necessarily know how to interpret it) so they don't understand what is going on.

I hope Google have fixed these two things, but I'm sure there are plenty of other traps.

It would be interesting to know how significant a factor it is that established b2b companies try their best to rip off the new companies.

Sounds eerily similar to the early days of Ryanair[1] which was a poorly managed basket case in an industry ripe for innovation of its time - managers caring about their looks more than their books, cost overruns and non ownership of key bases... It sounds like Thomas Cook didn't have their Michael O'Leary to swoop in and fix their problems.

Even Ryanair didn't value their website or online offerings at first but they valued something which TC obviously missed time and time again - their bottom line.

[1] https://www.theguardian.com/books/2007/aug/12/biography.feat...

I guess, I can say that I worked on a project for introducing interactive advertising displays into their branches. It was killed because they didn't like the power cabling.

> Customers at a hotel in Tunisia reported being locked in by security guards as the hotel demanded extra money, fearing it would not be paid by Thomas Cook.

This is quite bad behaviour from the hotel. Presumably their business relationship is with Thomas Cook, not the people on holidays?

They went as far as grabbing people who jumped a wall in an attempt to get out!

More details here: https://www.bbc.co.uk/news/uk-49787563

The hotel is this one, maybe one to avoid: "Les Orangers resort in Hammamet, near Tunis."

Don't hotels realise this is a reputation business? In the age of the Internet, no-one with access to TripAdvisor or Google will ever stay there again. Wouldn't be at all surprised to see the hotel change name in the next year, if they survive. But perhaps worse that that, a hotel behaving like this, and not being slapped down hard by the Tunisian authorities, will damage the entire Tunisian tourism industry, just as they were recovering from the 2015 hotel attack there.

> Wouldn't be at all surprised to see the hotel change name in the next year, if they survive.

It won't change its name. The reason they are still in business is that they are so dirt cheap. They are known in the area and avoided by almost everybody except for these "tours" and the uninformed.

> But perhaps worse that that, a hotel behaving like this, and not being slapped down hard by the Tunisian authorities, will damage the entire Tunisian tourism industry

It's already damaged. The tourism industry is a joke and the receipts are laughable comparing to other countries (Morocco or Egypt). Just a week before protesters were able to blockade a main road in the capital and cause a gridlock for several hours lasting until late-night.

Anonymity works great until you inspire someone with the time and means to make it their hobby to inform others about your existence.

Holding someone "hostage" like that, can be a pretty stressful event for anybody. You put some claustrophobic people into that situation and we've escalated things to traumatized. A traumatized person could easily blow this up into vendetta.

> Just a week before protesters were able to blockade a main road in the capital and cause a gridlock for several hours lasting until late-night.

Protesters cause gridlock in countries like England, Germany or Canada too. (Google for Uber-related taxi protests.)

Add France to that list too.

Not just bad reputation, it's against the law in many countries. It's given as example of the False imprisonment wikipedia page [1]:

"The detention of a customer by a business owner (e.g., hotel operator, apartment owner, credit card company) for the failure to pay a bill."

[1] https://en.wikipedia.org/wiki/False_imprisonment

I'd be interested to know if this is illegal in (specifically) Tunisia.

The closest parallels I can think of are the "mechanic's lien"[0] from English Common Law, or "debtors' prison"[1].

[0] https://en.wikipedia.org/wiki/Mechanic%27s_lien#Creation_and...

[1] https://en.wikipedia.org/wiki/Debtors%27_prison

> Don't hotels realise this is a reputation business?

I would say that the facts presented above answer that question for you.

Indeed. What reputation? A lot of tourists are shopping for price, the only reputation that matters is that of the booking site they use - the visitors want to trust that the site doesn't peddle total low-end garbage. Hotels are a commodity.

I took some package tours back in the day: you could get a good deal by not knowing where you would end up. Thomas Cook, or whoever, booked you in to a resort for a given price and put you in one of "their" hotels. Reputation of the individual hotels was not an issue, only of the travel company. Which is kinda how it should be -- why use a travel company and do all the legwork yourself, that would be like going to a restaurant and then checking the suppliers when choosing a dish off the menu.

The Guardian article mentions that hotels have to wait up to 3 months to be paid by the holiday company. I can see why the Tunisian hotel did what they did, but you are correct that their business relationship is with Thomas Cook, not the holidaymakers.

Meanwhile, Thomas Cook holidaymakers were anxious that they might be evicted from their hotels or charged again for their holidays. Holiday companies do not normally pay hotels until up to 90 days after guests have left.

Do hotels typically have insurance that covers situations like this?

> The Guardian article mentions that hotels have to wait up to 3 months to be paid by the holiday company.

Ninety day terms are very common in most B2B industries. Large companies quickly learn that their suppliers are dependant on them to stay in business and can be abused almost at will. So nominally "90 day" terms claiming you have 90 days to pay become "We definitely won't pay until 90 days after you bill us" and then "We typically pay in the working week after 90 days is due" and then "We only run routine bill payments on the third Wednesday of a month, so it can be up to 120 days I guess you got unlucky" and next thing you know the work you did in April is only paid for in October by a company that you know is already on the verge of bankruptcy but if you don't do that work they'll cut you off completely. It's crazy but that's how it is.

The EU says if in practice you don't pay on or before 90 days you owe interest at a calculated rate on the due amount. But most small suppliers are so in thrall to the huge company they supply that they won't even ask for that money.

But most small suppliers are so in thrall to the huge company they supply that they won't even ask for that money.

I wish I had kept track of all the examples of this I've read about. It's basically standard practice for big companies to be financially abusive to small companies they work with. It's rampant.

It also seems to be something every small company has to learn the hard way on their own because it doesn't get talked about enough.

Small companies routinely think they've got it made in the shade if they can land a single big account. Reality is more like Darth Vader saying "We have altered the bargain. Pray we don't alter it further."

Reminds me of a story from HP. They did that as a default way of paying invoices to every business at one of their sites. They thought that everyone will be cool with that. Instead they ended up with one of the managers having to pay the energy bill on a credit card so they get the building reconnected ASAP. Turns out it's all about who can enforce the terms.

I hear you but I had an experience with a US company, but quite some time back when I was in sales. Every single time, we used to get paid on the 45th day which was the agreed payment terms. Every month, our invoices used to land on the last day of the month (28, 29, 30, 31 depending on whether working day or not), and it did not matter to the company if the accounting person did not enter in their computer system until a week later, except quarter end : because it needs to go into a balance sheet so the deadlines were much harsher: no missed invoices showing up a day later. Anyways the point is that some (a lot) companies have their payments driven through automation and once the thing gets into the system, it gets paid, no "ask me next week" BS.

>But most small suppliers are so in thrall to the huge company they supply that they won't even ask for that money.

You are contradicting yourself by stating that it is understood that suppliers will get squeezed on payment terms and/or risk getting terminated if they don't stay in their lane; then you state that they should issue demands on late payments. In reality, SME's are not in thrall of mega-corps, they are just doing whatever it requires to maintain the status quo and keep the symbiotic relationship alive, even if it means giving up some rights and being on unequal terms; it is crazy, but that is how it is.

I suspect that this might be a varies-by-country thing, certainly in the UK 30 days is the norm, 90 days would be a bit odd.

But I think Italy are mostly 90 days (apparently due to that being Fiat's terms, and everyone else followed suit).

No, it depends on the sector. Big supermarkets, for example, pay later, as do a lot of businesses where actual turnaround of goods is involved; but service companies typically have a more flexible cashflow and can easily do 30 days.

In Italy the situation was so bad that it was not uncommon to get 180 days from big accounts. The State set an awful example by allowing 12 months on its own bills, and often wouldn't pay for years if at all (what are you going to do, sue them? The average lawsuit takes more than 2 years...). In the last decade, several acts of Parliament were passed to actually force national and local administrations to settle their bills - and a lot of them were still outstanding a year after that. About two years ago, the government passed a law forcing all businesses and administrations to pay in 30 days by default (with some exceptions, of course). Whether this is actually being enforced, I don't know (I don't live there) but in theory it should allow smaller businesses to be a bit more confident when signing contracts and asking to get paid.

It depends greatly on the sector in Italy.

In construction I have seen more often than not the formula (jokingly) "180 days we'll see", meaning that for 6 months there is no way you'll get paid, then we'll see what we can do.

And the Law(s) do little about it (and no, these ones are not usually enforced).

But the issue is not actually the delay (for which - costly BTW - remedies exist) but rather the uncertainty and the time lost.

If we agree that you pay me after 60 or 90 or 180 days (talking of "continuous" work, supplies or services) it's ok, I can make a financial plan taking into account that delay, and include in my offer (at least part of ) the financial costs of that delay.

In the '80's and '90's I worked in a company that had "standard" payments terms for "large" suppliers set at 90 days, but then that actually meant that on the 90th day from the date of the invoice, a payment was made on the supplier bank account, always, sun, wind, rain or snow.

What happens often nowadays is that the agreement is actually 60 days, but after 60 days nothing happens, and so you have to call (and of course you can't ever find the right person) and then call again the day after, then you write an e-mail, then you wait, then you call again, then you write a letter and they tell you to have some patience as everything will be fixed next week, and next week you call again and there is a problem with the "system" (or with the bank's "system"), so you have a lawyer write a legal letter andm finally they pay with the 60 days becoming 90 or 120.

In the meantime you already delivered another supply, rinse and repeat.

Thank the EU. https://ec.europa.eu/growth/smes/support/late-payment_en:

”Main provisions of the Directive

Public authorities have to pay for the goods and services that they procure within 30 days or, in very exceptional circumstances, within 60 days.

Enterprises have to pay their invoices within 60 days, unless they expressly agree otherwise and provided it is not grossly unfair.

Automatic entitlement to interest for late payment and €40 minimum as compensation for recovery costs.

Statutory interest of at least 8% above the European Central Bank’s reference rate.

EU countries may continue maintaining or bringing into force laws and regulations which are more favourable to the creditor than the provisions of the Directive.”

Yeah, but apart from this, removing roaming charges, funding infrastructure, safeguarding working rights, cleaning up our rivers and beaches, and building the richest market on the planet, what did the EU ever do for us...?

When I was freelancing for a big US corporate, sometimes it went beyond 90 days.

I wouldn't have minded if the contract had specified 90 day terms and payment had been timely after that. But the contract said payment would be made "promptly."

Sometimes the only way I'd get a payment was by hassling accounts and senior management day after day after day. It was a huge waste of everyone's time, and - unsurprisingly - I moved on as soon as I could.

UK clients would usually pay promptly on 30 days. Occasionally there were problems at the end of a quarter when VAT bills became due, but they were rare.

> The EU says if in practice you don't pay on or before 90 days you owe interest at a calculated rate on the due amount.

Interesting. Do you have a source for this?

British travel agents that belong to ABTA, the national association, should have emergencies like this covered by insurance, so the money is there. This is basically the nightmare scenario for a travel agent so you would think ABTA has an emergency process all set up and ready to go.

There is ATOL protection but there's only approx £18 million in the fund. £200 million is needed to pay everyone out.

Thanks. ATOL is what I was thinking of, not ABTA.

Isn’t ATOL backed by the government ? i.e government will step in to meet the difference ?

Where do you get numbers like that from and hows the scheme funded by design?

The UK requires that any outfit selling flights where you pay them and they promise to sort everything out, rather than they just execute and you get a bunch of tickets, passes etcetera in exchange for your money - joins ATOL and pays a small fee for every such holiday sold.

That fee is held by a central organisation that spends the money to fix things when one of these companies collapses, in particular to make sure all the random Brits abroad get put on a plane home.

It exists because the seasonal nature of the business means it's very common (routine in fact: https://www.caa.co.uk/ATOL-protection/Make-an-ATOL-claim/Lat...) for small outfits to go bankrupt, and otherwise their customers get stuck and then the government has to either suffer terrible headlines about why didn't they do anything, or spend money flying home idiots who took a bad gamble.

The account is certainly too small to cover Thomas Cook. But on the other hand, even just having the mechanism in place means the government has a pre-existing organisation to say "OK, fix this, but we understand you don't have the money so we'll pay" rather than trying to cobble something together only now.

/Maybe/ this experience will mean the fee is subsequently increased for new holidays. But my guess would be that's unpalatable and the argument will be made that a failure of this scale is not something the rest of the industry should anticipate and fund, whereas the constant drip of smaller failed travel companies is predictable.

Compare the 2008 financial crisis. There's a much stronger protection for banks in the UK called "Last man standing". In principle the government can allow banks to fail, and remaining licensed banks pick up the entire cost. This is indeed what happens for small banks. However in practice of course allowing even a single very large bank to collapse might be so disruptive that it's intolerable regardless of whether you believe the other banks can afford to pay for the aftermath.

Note that ATOL does hold insurance as well.

>> I can see why the Tunisian hotel did what they did

that's hostage taking, it is a crime, there is no excuse.

The most disturbing thing I've seen in the reporting this week was that the local police were called at one point, but they sided with the hotel and told the holidaymakers to go back inside!

I find it remarkable that, at least in the group who were being interviewed on TV yesterday after they made it home, the disagreements did not become physical. If my family were being detained against our will like that, not only spoiling the holiday but potentially leaving us stranded due to missing flights home, by people who were apparently prepared to forcibly prevent us leaving until large amounts of money had been paid that were not due, I'm not sure I would have been so tolerant. Some of the other groups affected at that hotel reportedly were not, but if the local police are going to side with the hotel as well, that's a very disturbing situation.

This is part of the value added by countries with a clear rule of law, etc.

I can't see why they did as they did. It should be prosecuted as kidnapping.

I found this quote from the Guardian:

> Those buses that arrived to transport holidaymakers to the airport at Enfidha were turned away by security, Orangers guests told the Guardian.


It's between a hotel and Thomas Cook's problem.

Thomas Cook book the hotel. Hotel promised to allocate a room for Thomas Cook. Thomas Cook will pay the hotel fee. Hotel receive the fee from Thomas Cook.

The customer who actually use the hotel owes nothing from the hotel.

The same goes for Airlines.

It's a textbook example really.

Except Thomas Cook is out of business and you need a place to sleep or a way to get home. Whatever the legal niceties that may be resolved or not over the next few years, sort of makes it your problem.

I had something similar happen in Germany in the mid 90's. I was traveling for business and stayed at a hotel which my employer had an account with. My employer was evidently late paying the account. When I and a co-worker went to checkout they wouldn't let us leave until our employer wired them money to settle the full balance of the account. As in this case the local police sided with the hotel.

That's completely ridiculous behavior. If anything, they should lock them OUT of the hotel

It's the classic I've seen used in jokes and comic strips - entry is free; once you enter, you discover that leaving costs money.

That's normal in the service industry, or in shops, for example. You get what you want, then pay on leaving. If you don't pay they detain you.

Try leaving your local restaurant without someone paying for the food. They won't care if you paid your friend for the meal and he kept the money.

Fair. <facepalm>. A perfect example of a cognitive blind spot on my end.

Incidentally, lower-end restaurants tend to be "pay before you eat", just like fast food joints. I honestly prefer it that way; saves the cognitive burden and a lot of time (sometimes waiting for a waiter to come with the receipt can take as much time as it took to eat the food).

Also a popular one in certain Eastern European nightclubs.

That’s hostage - taking, no?

Could also be citizen’s arrest, but there a risk a judge will call it that, yes.


”A person who makes a citizen's arrest could risk exposing him or herself to possible lawsuits or criminal charges – such as charges of false imprisonment, unlawful restraint, kidnapping, or wrongful arrest – if the wrong person is apprehended or a suspect's civil rights are violated.[4] This is especially true when police forces are attempting to determine who an aggressor is. Private citizens do not enjoy the same immunity from civil liability when making arrests on other private citizens as do police officers.“

I have no idea whether this is illegal in Tunisia, but it definitely should be. I hope the hotel gets slapped down hard for this. Let the person who made that call do some time in prison.

In general just avoid going to such countries lol

Easy throw away comment to make but don't forget lots of honest people in Tunisia are trying to make a living out of tourism, and from a selfish point of view having been to Tunisia there is loads of good stuff to see.

My experience is based on Egypt tourism. I'm not saying the people themselves aren't honest (in their private lives) but once there's money on the line, all honesty and nicety is out of the window immediately Begging, intense heckling, not taking no for an answer, rudely pushing upsells, sowing FOD to make an extra buck...

This is the case in nearly every developing country. It’s the same in developed countries, except instead of haggling, the menu at the tourist restaurant just says £18 for a burger.

Personally I have no problem paying a tourist premium in developing countries. One could even argue that “westerners” have a moral obligation to pay more for the same service, in exchange for all the advantages afforded to us by the exchange rate.

I found Morocco worse than Tunisia on this aspect, tbh.

Let's see how the authorities react to such hostage-taking. If they do nothing quickly then, yes, it is a very bad thing for the country notoriety

It would be an act of war against the UK.

It feels like that ought to be inflammatory and hyperbolic, but honestly, I was wondering the same thing myself last night.

If you're the British government, and your citizens who are legitimately in a foreign country, travelling on valid passports and doing nothing wrong, are being forcibly detained, and if the local authorities are not stepping in to try to resolve the situation in some reasonable way, how do you treat that situation?

On the one hand, you presumably want to be diplomatic when dealing with another nation. Certainly you don't want to escalate any potentially violent stand-off unnecessarily.

On the other hand, the basic facts are that those are your people and they're in trouble through no fault of their own. Isn't your first responsibility to protect them and get them safely home if need be? At some point, there will inevitably be a very serious discussion about how far you need to go to do that, and that discussion will consider deploying scary people with weapons in another country, which most certainly is an act of war.

If this isn't resolved, staff from the British Embassy will show up, and the local police will probably think again — or be instructed by the national police or their government.

There was a vague reference to Embassy staff becoming involved in some way in at least one of the reports I read earlier today, but it wasn't clear exactly what happened.

I don't think "stranding" is the right word.

For some time now, UK companies selling "package holidays" (with hotel, air, etc. all from one vendor and with one bill) are required to put up funds that the government uses to repatriate those who are already traveling when a company goes under:


Note that it does not cover trips that people put together themselves; in that case, I expect they'd only have to arrange for a flight home (as they paid for the other parts themselves).

The CAA (the UK's Civil Aviation Authority) already has a site up for Thomas Cook customers:


“Temporarily stuck until they can get a flight scheduled” is better, but wordy.

These vacationers are in safe countries with good infrastructure. They definitely aren’t stranded like Tom Hanks in Cast Away. However, the other airlines can’t magic up 150,000 seats, so it might mean that some people will take a while to get home.

Thomas Cook was more than just a travel agent. They were also an airline…


… and a hotel chain …


I would not be surprised if the UK has laws in place, and/or are using ATOL funds, so that the existing Thomas Cook aircraft can be pressed into service for the return journeys.

For example, return arrangements have already been confirmed for those traveling from Croatia on the 23rd:


The return flight details are identical to the original Thomas Cook flights (other than the flight numbers, which are similar).

> The return flight details are identical to the original Thomas Cook flights (other than the flight numbers, which are similar).

I suspect it's different operators re-using the same flight numbers and airport slots.

ZT is Titan (a short notice lease provider, which makes sense): https://en.wikipedia.org/wiki/Titan_Airways

U2 is easyJet: https://en.wikipedia.org/wiki/EasyJet

Titan Airways are confirmed as providing support:

> Following the collapse of Thomas Cook, Titan Airways are working in co-ordination with the Civil Aviation Authority to provide return flights back to the UK for those passengers currently overseas.


In one of the articles it said one hotel wasn't letting guests leave without paying more money, as the hotel believed they weren't going to get paid. So in some extreme cases it's not just about getting flights back to the UK.

Hmm, I’d be careful with this sort of behavior. Not letting people leave is the definition of kidnapping and I can’t think of any jurisdiction that doesn’t look dimly upon it.

They just need to get the cops to come and arrest them for not paying. The cops can "kidnap" them: https://www.youtube.com/watch?v=NbVJU1CuM0Q

This has been in planning between the CAA and major airlines since at least December 2018. (See 'Project Matterhorn').

The operation will temporarily be the 5th largest airline in the UK, with a fleet of around 50 aircraft.

Why does only cover "package holidays" and not all round-trip air tickets? That distinction doesn't make sense except as a subsidy of package deal providers...

It’s not a subsidy; the companies which sell package holidays need to put the cash up.

It was done because of financially unstable package holiday companies setting up and then failing leaving people stranded. Most people in the UK know to buy an ‘ATOL Protected’ holiday if they go for a package deal.

That doesn't answer my question at all.

Why doesn't ATOL protect non-package customers of Thomas Cook airlines? Why didn't it protect the customers of Monarch Airlines? Given the large number of airlines that have collapsed and stranded customers in the last couple of years, the "holiday package" limitation just doesn't make sense.

It ends up being a subsidy when the largest provider collapses and the funds don't cover the problem. Who pays then? Oh, the government.

Given that the Air Travel Trust has £170 million of cash and £400 million of insurance; that when Monarch Airlines failed they could repatriate "around 110,000 passengers" for £16.3 million [1]; and that Thomas Cook's collapse leaves about 150,000 holidaymakers [2] in need of repatriation; it seems unlikely the funds will fail to cover the problem.

There might be other expenses, outside the scope of the ATT, that the government ends up paying - there are estimates as high as £600 million [3] - but arguably that's a sign the scope of the compulsory insurance scheme should be broader, not narrower :)

[1] http://publicapps.caa.co.uk/docs/33/ATT_Accounts_2018.pdf [2] https://www.bbc.co.uk/news/business-49791249 [3] https://www.bbc.co.uk/news/business-49781920

Who are also first in line to collect when the company goes into bankruptcy and there is still money somewhere.

The OP implied that it would cover round trip tickets. It just wouldn't also cover hotels etc before the return flight.

Reminder again to never hold gift cards. I had a family member who was gited a $3,000 travel voucher with an agency - I told them to exchange it in for flights asap as you can book up to a year out, change the tickets later and it's better to be a creditor with a national airline than a likely-going-out-of-business-because-of-online travel agency

> Reminder again to never hold gift cards.

$3,000 is no small amount of money, do people really feel so much shame in giving someone plain old money that they have to buy a gift card?

A gift card is almost like buying a stock, except it's much more risky and gives you zero benefits compared to the cash that paid for it. If you want someone to be able to travel for $3,000 just give them $3,000.

Some places will try to offer refunds or compensation in the form of gift cards or store credit, which ostensibly makes it a non-refund in many cases.

Voluntarily spending £3k on a gift card seems utterly insane. I imagine a lot of people would feel quite confused or upset about that considering what they could also spend a few grand on.

The gift card market just confuses me. Especially when it's people giving gifts to people (not corporate gifts), cash is something that has at least as much value as the gift card, is accept everywhere, isn't a liability on a balance sheet, and is easier to give.

Ideally a gift should show that you know the other person well enough to pick just the right thing for them.

Money is the other extreme, it says "I really have no idea what kind of gift you'd like", so apparently you hardly know each other.

Gift cards are at least a small step up, you show you think the other likes to travel.

I wonder whether this sentiment evolved naturally, or was created by merchants (the way we have an ever growing amount of holidays and customs that somehow oblige you to spend lots of money).

On the one hand, giving a well-received physical gift shows that you know the person enough to get them something they wanted. On the other hand, it also risks they'll have an unplanned item that kind-of-but-not-quite matches what they actually wanted, creating friction and inconvenience in their lives. I know this is a custom, but personally, I'd much prefer to get a monetary equivalent instead.

(One custom in my area I know where giving actual money is still expected is weddings. This is usually justified by the fact that organizing a wedding costs a ton of money, so this helps the newlyweds recoup the expense.)

Cash with a note saying "For you to enjoy in <person's favourite shop>" then.

That reminds me of my grandma, she used to hand me money “for you to buy some X”

I should give her a call.

The thing about 'gift cards' is that people think they are money. They are not, they hold no actual monetary value, which is why you can't request the issuing company to convert them back to cash. Also MANY gift cards have expiry dates on them. It doesn't matter if the gift card is 'worth' £3,000, if it's past its expiry date, that £3,000 is effectively gone.

Same, I really don't get gift cards as actual gifts. On the other hand, because they're less useful than money, you can often get them cheaper in some kind of promotion. I'm getting almost all of my groceries+fuel via gift cards which I can get from my car insurer with 5% discount. But there are many online markets that would probably give a better price of you have time to deal with them.

There's one online alcohol retailer that will actually give you 5% on any gift cards you buy -- and they never expire: https://www.masterofmalt.com/gift-vouchers/

Additionally, buy flights using credit card.

If you used a credit card, you get your money back in the case of bankruptcy. If you used cash you may not unless you bought bankruptcy insurance.

What’s more, many credit cards provide at least limited travel insurance which may cover the cost of alternative flights and accommodation.

Depends on the country and industry... AFAIK in the UK, if you buy a restaurant voucher (e.g. via Groupon), the restaurant doesn't actually get that money, but it's held in a separate account until the customer actually uses the voucher.

This is literally an Airline going out of business, the opposite to the point you're making.

They do much more than just airlines. For example: https://en.wikipedia.org/wiki/Thomas_Cook_Hotels_%26_Resorts

Thomas Cook to cost the taxpayer £100m for the repatriation of Thomas Cook customers - known as Operation Matterhorn.


In Germany TC is required to insure package tourists for this case. Germany won't pay for their return (or as in this case: the time they'll stay there until the insurance gets them a flight back).

It's always blown my mind that companies like this will operate not having enough cash on hand to actually provide the services they've sold.

Maybe that's why they're in business and I'm not.

Well, reaching that point is the definition of insolvency.

But having future commitments that you don't currently have the cash for is both normal and expected. The economy is held together by invoice credit.

(Wait until the people who get upset about banks "creating money" realise how commercial credit works and discover "shadow banking"...)

Anyone interested in the "creating money" aspect of banks should definitely read a paper called "The Monetary Basis of Bank Supervision" (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3421232).

Working capital is the amount a company is due for services/goods (accounts receivable) minus what it owes for services/goods (accounts payable).

The ideal situation for a company is that if it receives payment for it services in advance (i.e. a consumer paying for a holiday) and has to pay its suppliers (i.e. hotels) much later. This can result in a situation called negative working capital where a company has received more cash from customers than it has paid to-date. This is effectively interest free financing.

Companies getting into financial difficulty will try to accelerate payment of monies they are owned and delay payment to supplies...as we see here.

> not having enough cash on hand to actually provide the services they've sold

The article mentions that one of the issues here is that the credit card companies saw that collapse was imminent and certain and thus refused to release the funds charged by their customers to Cook, knowing that Cook would collapse, the customers wouldn't get their full holiday, would do a chargeback, but the bank wouldn't be able to get the funds back from Cook.

> "The tour operator is understood to have made a number of proposals, including ... for credit card companies to release about £50m of cash they are holding as collateral against Thomas Cook bookings."

So maybe they did have enough cash on hand in a way, but the banks weren't releasing it to them.

Another intractable and perhaps the main problem was their massive debt service owed on their previous bailout. Kind of similar to Toys R Us and other companies that have had a bailout of one form or another that leads to massive debt and debt payments taken on and beyond the ability of the company's profits to pay off.

I've been told many large companies only have a few months cash flow to keep them operating. I remember many years ago this fact was exploited by the unions when a dispute couldn't be resolved. They stopped collecting payments (pre internet) and the dispute was resolved quickly.

Well, they're not in business anymore

I was always wondering about the profit margins of these companies. From their prices I always felt that I am paying a portion of the previous guy's vacations. I'd call it a pyramid scheme, only everybody loses.

The big problem was its £1.4bn in debt, which really brought it down. Id be careful holding shares in companies with big debt if there's a coming downturn.

How's AT&T looking these days?

Nicely propped up by the government.

Netflix and WeWork are more pertinent examples tbh.

I was not aware Netflix had significant debt.

Netflix is basically sticking $4 billion a year in bonds at this point.

That's not necessarily a problem today. Debt is cheap. But they do have to slow that down at some point through lower spending or increased revenue, and if the cost of debt suddenly skyrocketed in the meantime, which is not impossible, that would be a big problem for them.

I have a future holiday booked with Thomas Cook. I paid a deposit, which I expect to get back through either ATOL or my credit card company. The overall cost was going to be less than I would have paid booking direct. They should probably have charged me more :(

Probably should check with the credit card company sooner rather than later.

Maybe this is nitpicking, but it might be more that they're always one month behind on all their bills. A pyramid scheme needs to keep getting suckers on the bottom layer; this might operate fine with repeat customers.

> profit margins of these companies

They are really low. They rely on large numbers of tourists to have a meaningful profit YoY.

Source: worked for a tourism company in early-to-mid 2000s.

Taking less money now for higher expenses in the future isn’t that unusual.

It’s basically the cornerstone of insurance companies (especially life insurance).

That industry isn't a scam though. Life insurance companies have at least some capacity to balance their books by selling annuities or lifetime mortgages. The number and magnitude of life insurance claims is dwarfed by the hundreds of thousands of pensioners every year that are converting their accumulated wealth to income at paltry rates.

I was recently debating booking a flight to Europe on Norwegian. It didn't affect my decision, but I'm very aware that they're struggling financially, so I'd only buy the tickets less than a month out on a credit card so it's the bank's money, and if they declared bankruptcy and cancelled flights, c'est la vie.

But what happens if they declare bankruptcy on you way back ? and what about hotel reservations or the more expensive flight you'll have to take ?

BTW Norwegian are fine for a while


The hotel reservation problem actually happened to me. I booked the hotel via a company called AMOMA, which Google recommended me when I entered the hotel name (it was the cheapest so I took it).

They recently sent me an email saying that they immediately ceased service and our booking will probably be cancelled. I checked with the hotel the same day and got a confirmation that the booking is all good (via phone and email). One day after I get an email from the hotel saying our booking has been canceled.

I did pay via (prepaid) credit card so it'll be interesting to see whether I'll ever get my money back...

> I did pay via (prepaid) credit card so it'll be interesting to see whether I'll ever get my money back...

Curious: what card is both "prepaid" and a credit card?

> But what happens if they declare bankruptcy on you way back ?

Buy your plane tickets with a credit card, ask your credit company for the money back, buy another ticket. This is one of the main advantages of using a credit card: the credit company will absorb the debts of the third party (the airline, in this example).

Sure, and hope that you aren't on a strict budget and the return flight doesn't cost a lot more. Oh, and that the credit comes in a timely manner and you aren't waiting until monday/tuesday because friday evening isn't a business day.

> and hope that you aren't on a strict budget

If you have a credit card and you're still on a tight budget, you're using credit cards the wrong way: i.e. the way most people use them. Use them like a debit card and you'll be fine, and in emergencies you have credit to dip into.

Don't travel 6,000 miles on a strict budget, and definitely not on an airline in an iffy financial position.

I just checked my travel insurance and they son't seem to cover bankruptcy of airlines in any way. That's good to know.

> But what happens if they declare bankruptcy on you way back

That falls under c'est la vie. I gambled, I lost, suck it up, book BA (looks like the strike's over), Lufthansa, SAS, etc.

Ah, nuts! I had no idea Norwegian was struggling. I have a long-haul flight booked with them for Christmas :(

My brother just came to visit me on Norwegians NY->Dublin route. He said when he got on the flight they made an announcement that it was their last flight for that route ever. They have already cancelled their Providence->Dublin route as well so I'm a bit bummed I won't be able to fly back to the states cheaply in the near term.

I think they had problems due to 737-max being grounded.

They were having problems before that, but the 737-max exasperated them. They even used a 787 to fill in some gaps, but that's absurd.


Does this mean Condor Airlines is shutting down as well?

Their website[1] says they're continuing to fly, but I'm wondering if there any sort of precedent for what happens to child companies when the parent becomes insolvent.

Having just returned just last week from Europe via Condor Airlines, I'm glad I don't have to worry about this mess.

[1]: https://www.condor.com/us

If Condor operates as an independent company, as long as it is a going concern, it will likely continue to fly. As an asset, it will be sold by any administrator in order to help recoup money to pay Thomas Cook's creditors. It is (most likely) worth more money as an operating airline than if it were to be shut down.

However, bankruptcy laws in many countries are pretty good at destroying value in these circumstances.

German Spiegel Online has a bit of information:

Basically Condor answered that they will continue operating but also had to apply for a state backed credit to bridge short term liquidity issues caused by Cook's insolvency. This is being assessed by the German government at the moment.

The german travel agent subsidiaries however have stopped selling travels for now (brands Neckermann Reisen, Bucher Last Minute,etc)


Same issue here in the Nordics with Tjärebörg. At least the Finnish version is claiming this won’t affect them, and has been saying this for weeks. I’d call this bullshit, as far as being irresponsible. It sounds to me like a CEO trying not to spook potential customers rather than being honest with existing ones.

My partner has a holiday with them booked for November. I don’t have high hopes for that.

Bankruptcy laws in most countries forbid you from not trying to operate in a normal way (e.g. by comforting possible customers to buy with you). Otherwise you would be committing to a more speedy insolvency which would in the end be some form of bankruptcy fraud.

I agree with you this is strange and very non beneficial to the customers who book late in the process but it would be even worse for those who already had booked and would then be left hanging since no money was coming in anymore.

Though quite obviously the only people benefiting from this are lawyers and the executor.

Ving Norge cancelled all their flights even though they haven't actually filed for bankruptcy, so don't be surprised if the other subsidiaries end up with similar happenings.

I hope not - only direct flight from Portland to Germany and very cheap (but crappy)

Guardian reports:

> Dozens of charter planes have been brought in from as far afield as Malaysia to assist with the mass airlift.

Getting a charter plane has been quite difficult since the 737MAX grounding.

Any excess capacity has been soaked up.

There have been lots of unusual chartering by airlines that don’t usually charter. Air Canada had been using some, and it’s exceptionally rare for them to not use AC-branded planes.

At least it’s not the high season.

Why are extra planes even necessary? There were already return flights planned, right? Why not have those fly anyway? Maybe they're owned by Thomas Cook and the crew won't get paid anymore, but it'd be nice if the government could step in and let those parts of the company continue operating until every is home again. That's much less disruptive than keeping the original planes grounded, and chartering different planes to step in. That's disruptive to two plane crews and the passengers. Continuing as normal would be far less disruptive.

But I'm probably missing some vital piece of red tape. It's usually an insurance issue.

The planes that have landed in the UK are being impounded by their airports. If an airport is not paid the unpaid fees within 56 days, they are entitled to auction the impounded plane to recover lost costs.

I would suspect airports are very unwilling to let those aircraft go anywhere until all the bills are paid as they might be only guaranteed way of getting money at this point.

Licensing is probably the biggest headache I’d guess - being insolvent the airline won’t have a valid license to operate into those countries any more and civil aviation regulators are usually very strict on that sort of thing. But as you suggest, insurance and ability to pay landing and fuel charges (sometimes aircraft are impounded by airports for failure of the owners to pay these charges) are some potential issues too. Then the planes themselves may also be leased and so the owners of those planes would want paying too, possibly including any arrears, before allowing them to be used.

None of these are obstacles which couldn’t be overcome but it’s quicker just to use someone else who doesn’t have those issues.

Would you take a plane flown by two pilots who have just been told they've lost their jobs?

What do you call a pilot on their last day? Your pilot ;)

I’m sure it happens more often than you think.

Yeah, this would have been absolute carnage just last month. At least there should be very few kids involved now.

On the other hand, there are presumably now about 50 fairly new Airbus aircraft for sale, mostly A320 or similar, plus some Boeing ones.

(Various sources give different numbers for the fleet size.)

Almost all of their aircraft are leased, not actually owned by them. In the short term, they'll probably be impounded by the airports they're currently at, pending payment of landing fees.


And there’s no shortage of airlines willing to pay top-dollar to charter a fleet ready-to-go yesterday.

No way the lessors will say “sure, keep using them for a while, just us pay in advance”.

The 737MAX grounding had big knock-on effects.

I just paid 30% more than I usually do for TATL tickets, for bloody November.


This looks really bleak, everybody who had some liabilites to Thomas Cook in any way should at least consider the chance of insolvency.

The hotels should be able to check this information, but consumers?

Every person who gets a new phone contract has his credit rating checked, but if hundreds of thousand people buy expensive flights nobody warns them about the risk.

One interesting part of the news coverage is that there are 600k customers involved, and only 150k of them are UK holidaymakers. Notice the lack of coverage of the other 450k?

The guardian is a British newspaper, so there's an understandable focus.

An additional factor may be the insurance situation: Some countries require travel organizers to set up insurance for these cases, ensuring that customers can still get back. I'm not 100% sure on this, but I think the UK doesn't have such requirements, which would worsen the situation for them in particular.

This isn't the only article; many US newspapers have also had the same focus.

Notice the lack of coverage of the other 450k?

if you read a Swedish newspapers they'll talk about the Swedish customers, read a German newspaper and they'll talk about the German customers and so on.

The 10-20k Dutch customers of Neckermann and TC are covered by an equivalent fund for safe voyage home (and possible payout). I guess more countries have some kind of arrangement.

its quite possible they don't know the origin of the other customers, so nothing to report there

From the 05:37 summary:


* There are 600,000 Thomas Cook travellers who have been left stuck overseas.

* More than 150,000 of those are Britons.


How come a company that is trusted by half a million travelers (at the end of a holiday season) can this easily go bankrupt?.. Is this a case of bad management or cheap travel models or what..

cant see any details on when they started seeing issues, and how did they end up like this..

edit: here is how -- Thomas Cook returned to private ownership in 1972 and has seen a series of mergers and takeovers. In 2007, it merged with the UK-listed owner of Airtours, MyTravel Group, which nearly collapsed in 2011 but was bailed out by its banks. The rescue left Thomas Cook with a debt burden of £1.7bn and the company struggled to cope, leaving administration as the only option.

I was not familiar with the term holidaymaker, and thought it was corporate speak for a Thomas Cook employee. Very confused until halfway through the article.

That's a damn shame. I used to fly with them for next to nothing. Decent airline. Never would consider staying in their crappy hotels though. This will have a major effect on low-cost long-range tourism. Everybody is going to bump their prices up a notch.

Why do these travel companies always go bust in a way that leaves people stranded?

Surely the management must have known a week or two ago that the company was about to go under. In that case, stop anyone flying out but still bring people back. By the time they actually cease trading there should be few people left abroad. Some managers in Thomas Cook must have known that people flying out were going to end up stranded and they just let them go.

The moment they stop accepting reservations for new travel outbound is the moment they are commercially dead.

Agreed, if you knew there was 0% hope (say, of flying anyone back a week hence) it would be unethical to keep it going. But if you were trying to keep things afloat and thought you could do, it would be unethical to do otherwise, since stopping new outbounds would 100% doom the firm and strand the overseas travelers.

I guess the question is: how often have airlines/tour companies been at the brink like this and pulled through?

If the answer is “close to zero”, we need to rethink this privilege.

I'm sure you read the article, which mentions that there were negotiations up to the last minute to raise the last 200mm pounds on top of the 900mm pounds existing rescue package.

In general I think companies have a duty to their shareholders to fight to stay in business until it's literally impossible to do so. As long as there are resources left, those would have to be allocated to preserving the business, rather than to smoothing the process for their customers.

In that case the shareholders should be held responsible for leaving people stranded.

The whole point of a limited liability company is to shield shareholders from responsibility.


That's a catch 22. The company has a duty to its shareholders first, and shareholders are protected from responsibility.

Exactly, they should have stopped flying people out when they were within two weeks of closing. If they had secured the funding needed to continue then all well and good and then start flying people out again.

I think there's a catch 22 here.

The instant the airline says "We're no longer accepting bookings because we're working to figure out a cash situation." you've got to believe everyone else who is still booked will pull their ticket for a refund of any form. I would be.

There would be a massive outflow of what little available cash exists.

The announcement whether early or late is the immediate death knell of the company.

I do agree at face value this seems terrible, but I honestly don't see a better course of action given they were waiting for a bailout and then didn't receive it.

One could imagine a travel company that operated like a financial services firm - if you pay $3000 for a package holiday they put your money in a ringfenced client money account and contract with an airline and hotel to provide the services with payment in arrears.

That way if the travel company or airline or hotel goes out of business, the holidaymaker hasn't lost any money (although they might face the cost of buying a last-minute flight from a different airline, or similar)

Of course, you could argue consumers who want such peace of mind can already approximate such an arrangement by combining a package holiday with travel insurance.

Welcome to Hacker News! Lots of startups have gotten to within two weeks of closing, and then didn't close.

And plenty have insta-shutdown and said “ooops, sorry about all your data. We regret not telling you sooner (not that we would have). Here’s the address of our $350/hr insolvency firm (which will be deducted from any compensation). Good luck!”

If you are lucky you can find out who bought your data to recover and/or destroy for a hefty tag, and wonder if it was copied and sold adittionally...

This didn't come out of the blue. Thomas Cook is known to have problems for years and an impending collapse has been rumoured since months ago. Why did all these traveleres choose them is a better question

Because people often book holidays six months or more in advance, and Thomas Cook's financial woes weren't especially big news back then.

Because vast majority of people aren't aware of the financial health of the companies they purchase from.

it was in the news though, for more than a year

Completely playing devil's advocate - continuing to operate whilst knowing there is a high risk of them going bust gives the CAA more time to put in contingency plans, rather than going bust _now_.

And the CAA got a lot of experience with this with Monarch.

But I doubt they’re happy about that experience.

The moment they stop flying out, they collapse. In that case they leave people behind and sink the company actively. Not a situation any manager wants to end up in.

Frankly I think its amazing that all these people can expect to be repatriated, relatively problem free, it's like a bank collapse, but you have to herd people.

And the scale. Operation Market Garden only dropped 40,000 troops. D day only managed to land 150,000 on the first day.

On the other hand, the tourists aren't being paradropped over hostile territory. Unless Thomas Cook had really gone downhill..

I don't think they limited the amount of people they dropped on the Netherlands, or the people they threw at the Normandy beaches on the basis that they might be shot at. Logistics was the limiting factor.

And jumping them out of a plane saves on landing and return flights, so in that sense, Normandy and Market Garden would be logistically simpler than Operation Matterhorn.

Although I hope that Matterhorn doesn't require any bridgeheads to be conquered.

It's also worth remembering that Market Garden failed in its final objective.

The scale is larger, but figuring out how to move people around when an airline stops flying either through a strike or bankruptcy is not uncommon. As long as they can get people out of the vacation town and into a larger EU city, flights back to the UK become relatively easy.

Years ago I showed up a Croatian airport to head home after a few weeks vacation and during that time the Croatian airline (pilots I guess) had gone on strike. It was a bit hectic, but eventually we were put on an unbranded private jet to Frankfurt. From there getting back to the US was no big deal.

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