British travel company Thomas Cook Group was forced to shut down operations on Monday, leaving hundreds of thousands of vacationers with defunct travel plans, grounding all airplanes, and laying off all employees.
The British Civil Aviation Authority (CAA) confirmed the forced liquidation of Thomas Cook, and that the company’s four airlines will be grounded, resulting in as many as 600,000 stranded travelers in what was described as “global travel chaos.”
The collapse of a company that helped create the package tour industry has left an estimated 150,000 British customers abroad — including those in Greece, Spain, Turkey and Cyprus — and in need of rescue.
The British government said it was taking charge of getting these vacationers back home from holiday locations across the globe, calling it “the largest repatriation effort” in the country during peacetime.
They will be brought home “as close as possible” to their booked return date, according to a statement from the CAA.
Thomas Cook had been struggling financially for years due to competition from budget airlines and the ease of booking low-cost online travel accommodations. In May, Thomas Cook reported a debt burden of $1.52 billion.
The company recently raised $1.12 billion, including money from its leading Chinese shareholder Fosun.
On Friday, Thomas Cook was seeking $250 million to avoid going out of business and was in talks with shareholders and creditors to stop the collapse. Those efforts failed and it was announced Monday morning the company was going into forced liquidation.
Thomas Cook’s s 21,000 employees in 16 countries — including 9,000 in the United Kingom — were all at risk of losing their jobs.
An estimated one million future Thomas Cook travelers also found their bookings for upcoming holidays canceled. Many are likely to receive refunds under their government-run travel insurance plans.
This insurance program puts the CAA in charge of getting vacationers home if a British-based tour operator goes out of business while the customer is abroad.
Thomas Cook requested that its ordinary shares be immediately suspended from listing on the premium segment of the Official List of the FCA and also from trading on the main market of the London Stock Exchange.
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