The Great Thomas Cook Repatriation Begins, But Then What?


Going bankrupt in the United Kingdom is a whole lot different than in the US. Had Thomas Cook been based here, it would have most likely filed for Chapter 11 bankruptcy protection and tried to reorganize while still flying. But Thomas Cook is a UK company, and that means that when the 178-year old business ran out of financing options Sunday night, it effectively just disappeared as far as the public is concerned. The UK government is solely focused on picking up the pieces in the near term while it prepares for a massive liquidation in the long run.

Usually when I write about failing companies, I’m talking about airlines, but Thomas Cook is unique in that its airlines actually did alright. It’s the tour operator/packaging business that was weighing the company down and causing red ink. As its fortunes turned worse this year, Thomas Cook looked at selling off its airlines to keep the rest of the business afloat. No deals were made at the time, and instead the company focused on recapitalization. It had a deal in place, but at the last minute, the banks required an additional GBP 200 million. The company thought it had a deal for that too, but it fell through. Yesterday, the company gave up and shut down.

The Great Repatriation

While the UK may not protect companies, it does protect consumers. Those whose bookings were under the umbrella of the ATOL scheme and hadn’t started their trips will simply get their money back. They’ll have to start planning new trips from scratch if they still want to go. (Some lucky people will have their air tickets intact if they weren’t booked on a Thomas Cook flight, but the rest of the trip will be wiped out.)

The bigger issue is that there are 150,000 Britons on their trips who need to get back home. The UK promises to bring all of them back over the next two weeks. How the heck can it do that? Well, sadly, it has experience in this area.

When Monarch failed a couple years ago, the UK had to bring 100,000 people back. This is a bigger effort, but the building blocks are in place, and the government can learn from past issues.

This page on the UK’s website shows what people can expect depending upon their destination. Firm plans seem to be made only a day or two at a time, so we can’t see the entire outline, but rescue efforts are underway.

The impact in the US is limited since Thomas Cook’s subsidiary Condor is still flying, and it has a large presence. But Thomas Cook did fly to Las Vegas, Los Angeles, New York/JFK, Orlando, and San Francisco. Except for Orlando travelers, all Britons stuck in the US can call British Airways or Virgin Atlantic to make new arrangements home at no extra cost. For Orlando, charters are being arranged. That’s also the case for most other destinations. In fact, yesterday alone the government arranged for 60 flights back to the UK. Check this out.

Maps generated by the Great Circle Mapper – copyright © Karl L. Swartz

I partnered with Karl at Great Circle Mapper to put this complex map together. If you want to see more details, head on over to the Great Circle Mapper where there’s a dedicated page. I know that’s a lot of lines and colors, so here’s a list as well.

  • Antalya, Turkey – Titan Airways to Belfast, London/Gatwick, and Manchester
  • Bourgas, Bulgaria – Titan Airways to Birmingham and Manchester
  • Cancun – Wamos Air to Manchester (people going to London/Gatwick are on this flight too and being sent via ground upon arrival)
  • Corfu, Greece – Titan Airways to Bristol, East Midlands, London/Gatwick, London/Stansted, Manchester, and Newcastle
  • Dalaman, Turkey – Hi Fly Malta to Glasgow, Titan Airways to Cardiff and London/Gatwick, London/Stansted, and Manchester, Freebird to London/Gatwick, Evelop to Birmingham (people going on one Glasgow flight are on this flight too and being sent via ground upon arrival)
  • Enfidha, Tunisia – Titan Airways to Manchester
  • Fuerteventura, Canary Islands – Titan Airways to Manchester
  • Gran Canaria, Canary Islands – Eastern to London/Gatwick, Titan Airways to Bristol and Manchester (people going to Birmingham are on this flight too and being sent via ground upon arrival)
  • Hurghada, Egypt – Titan Airways to London/Gatwick, EuroAtlantic to Manchester and Newcastle
  • Kos, Greece – EuroAtlantic to Manchester (people going to Bristol are on this flight too and being sent via ground upon arrival), Hi Fly to London/Gatwick
  • Lanzarote, Canary Islands – easyJet to London/Gatwick, Air Europa to London/Stansted, Titan Airways to Birmingham and Manchester, Miami Air to Glasgow
  • Las Vegas – Fly on scheduled British Airways or Virgin Atlantic flight
  • Los Angeles – Fly on scheduled British Airways or Virgin Atlantic flight
  • Malta – Titan Airways to London/Gatwick
  • Marsa Alam, Egypt – Nile Air to Birmingham
  • Menorca – Evelop to Birmingham (people going to Manchester are on this flight too and being sent via ground upon arrival), Titan Airways to Bristol, East Midlands, Glasgow, and London/Stansted, Eastern to London/Gatwick
  • Montego Bay, Jamaica – Virgin Atlantic to Manchester
  • New York/JFK – Fly on scheduled British Airways or Virgin Atlantic flight
  • Orlando – Atlas Air to Glasgow, Virgin Atlantic to Manchester
  • Palma de Mallorca – EuroAtlantic to Birmingham (people going to Glasgow are on this flight too and being sent via ground upon arrival), Titan Airways to East Midlands, Malaysia to Manchester (people going to Newcastle are on this flight too and being sent via ground upon arrival)
  • Paphos, Cyprus – Titan Airways to Manchester
  • Punta Cana, Dominican Republic – Titan Airways to Manchester
  • San Francisco – Fly on scheduled British Airways or Virgin Atlantic flight
  • Split, Croatia – easyJet to London/Gatwick, Titan Airways to Manchester
  • Tenerife, Canary Islands – Titan Airways to Manchester
  • Zakynthos, Greece – Titan Airways to Birmingham, Bristol, Cardiff, East Midlands, London/Gatwick, and Manchester, Miami Air to Glasgow

This is just for one day, so it’s an incredible number of flights to stand up overnight. It was pointed out to me that not all of those Titan flights are operated by Titan. Some are being sub-contracted to other carriers. The end result, however, is that Titan is suddenly having a VERY good month.

Once that’s all done, then the dust begins to settle. What happens now, especially on the airline side of things? That’s where things may get interesting.

The Great Asset Fight

These repatriation flights are only for those who already left the UK and needed to get back home. Everyone else just gets refunds, and that means airlines like easyJet and Jet2 are about to get a windfall of new business. TUI will pick some up as well, and I’m sure all low-cost carriers that touch the UK at all, like Ryanair and Wizz, will see a healthy uptick in bookings. But in the long run, someone is going to step up. This capacity won’t simply disappear.

The tour package model that Thomas Cook previously operated has been fading. Some airlines like Jet2 and Allegiant in the US have found modified ways of making that work, but I wouldn’t expect to see huge new capacity to directly replace what Thomas Cook was doing. Instead, I expect existing airlines will pick up the slack and jockey for position to buy assets in the liquidation.

The biggest prize is Condor. Condor, to be clear, is still operating from its German bases. Those flights are going as scheduled, but the airline has asked for a bridge loan from the German government to help it get through the liquidation process.

Condor has a lot of value. It’s not the old airplanes in the fleet that matter, but rather it’s the slot holdings in Frankfurt that would be quite the prize. Undoubtedly Lufthansa is interested, but there was concern that it would be viewed as anti-competitive. I think that’s probably right, and that opens the door for others.

I’d imagine an airline like IAG-owned LEVEL would be very interested in this, especially since it has both short- and long-haul operations under its brand. Ryanair and easyJet and the like will probably have interest as well, but they wouldn’t want long-haul. Whether there might be an interest in breaking Condor apart of not remains to be seen, but I imagine a bid to keep the whole thing intact would be looked upon more favorably.

Then there is the UK operation. Virgin Atlantic had previously said it was interested in Thomas Cook’s long-haul operations. Most of that long-haul was focused outside of London, but I’m sure Virgin Atlantic would love to pick up those few, precious Gatwick slots if it could. It could also fit that leisure flying from Manchester, Glasgow, etc into its existing operation. So that seems like a possibility.

For short-haul, however, I’m not sure that anyone will care. easyJet, Jet2, and Ryanair will ramp up their operations in the country to fill in and replace lost capacity where needed. But I doubt that there are many assets worth buying from Thomas Cook to serve that purpose. It’s easier to just let Thomas Cook go away and grow organically in most places, I’d think.

There’s no question that many airlines will all be sniffing around every asset to see what’s worth grabbing and what’s not. For now, Condor flies on, but whether it is able to stay independent or not is unclear. Thomas Cook was a big company with a well-known brand. And now, overnight, it’s just gone.

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24 comments on “The Great Thomas Cook Repatriation Begins, But Then What?

  1. I was thinking, especially considering that this happened a few years back with Monarch, that governments should enact some type of legislation stating that if a company such as an airline which affects the national welfare/security in such a critical way is about to go under, it would need to notify the government before ceasing operations to let them figure out their plan. I read that this would cost the British around $750 million to repatriate the nearly 160,000 citizens abroad. Wouldn’t it have been much cheaper if the government could say “Thomas Cook, we’ll fund your daily operating costs for another two weeks to get everyone home.” That would be what, maybe $10 million a day (no idea, but has to be less than $750 million). We have all types of laws here (i.e. Railway Labor Act) that impose specific restrictions on certain public companies because their potential impact on the national welfare would be too great. This doesn’t seem too far-fetched, does it?

    1. There was a report to the UK Government after Monarch which proposed something not unlike this – that basically an airline could continue to operate in insolvency to make the repatriation possible. Unfortunately that report is gathering dust because the Government is too busy with Brexit – I don’t think they’ve even committed to trying to find time for the necessary legislation.

      I’m not sure VS (or IAG) will want many of the Gatwick slots. Some of them were at pretty antisocial times; that said BA’s LGW operation in the summer has some flights landing very late into the night. And it’s not automatic that they’ll be sold – they may just go into the pool for reallocation. (Monarch’s were sold, but only after a row about whether a company which no longer operated flights was allowed to hold slots – the fear being that this would set a precedent whereby non airlines could buy slots and hold them for investment purposes…)

      1. The sad thing, of course, is that Brexit makes it more likely that something like this might happen again if it’s a particularly rocky transition.

        1. Even if it’s not a rocky transition, many people might be tempted to sit it out for a while “just in case”. That’s worrying enough.

    2. This is exactly what the ATOL scheme is for. It’s a type of insurance that is required to be paid on all travel packages to fund these arrangements in case the travel company goes belly up. So it’s working as intended, you just have to avoid the sensational media headlines making this out to be some massive burden on the UK government. It is not in the slightest.

  2. Given that Thomas Cook’s financial situation was known to be deteriorating, it is sad that there wasn’t a mechanism to wind down their operation.. People diss chapter 11 in the US but there is no government involvement and passengers don’t have to wait up to TWO WEEKS! to get home.

    do you know if BA can use AA operated flights and VS can use DL operated flights? Either way, it seems that there will be a bump in demand even across the Atlantic. Even if passengers can only fly on BA and VS operated flights, the AA and DL operated flights should be the ones that receive a higher amount of normal bookings.

    Sad to see another storied name of European aviation fail but it says that the thinning of the herd in Europe is finally taking place which will result in higher fares and a more concentrated market as the bigger carriers survive.

    1. “… passengers don’t have to wait up to TWO WEEKS! to get home.”

      There’s a lot of misleading information on this. The rescue flights are running to return passengers home on their intended day of return, having completed their vacation. It’s not 150,000 pax stranded at airports desperately needing to get back yesterday or today. The ATOL fund also pays the hotels and resorts so that people can complete their vacation as normal (as possible).

      And regarding repatriation from the US, aside from Orlando the CAA is booking people onto regularly scheduled BA and VS flights. It would make sense to use the JV partners too, though non stops to the UK from JFK, LAX, SEA and SFO are overwhelmingly served by BA and VS metal.

    2. Tim – As was mentioned, people don’t wait for two weeks to get home.
      Almost every flight is operating, though some are delayed by hours, not days. There is some inconvenience, but this isn’t hard for people to get home.

      I don’t know what you mean by BA/VS using flights operated by their US partners. You mean specifically for repatriation flights? Probably so since both Eastern and Miami Air are doing it now. But if you’re just talking about in general to capture more demand, then they do that already through the joint venture.

  3. Wonder if EasyJet/Wizz would be interesting in snapping up the Thomas Cook narrowbodies. Maybe JetBlue would be interested in a LGW slot pair or three, though they’d probably have to sublet the slots to someone who could fly them sooner rather than later.

  4. Most of us who live here in the USA will not bat an eye to the overnight closing of Thomas Cook. However, I have spent much time in the UK over the last 50 or more years and I know how important Thomas Cook was to the fortnite holiday of many UK citizens. I myself had booked several holidays with Thomas Cook while living in London. They were the go-to travel people who provided you with a reasonable cost trip to sun and sand and many places in between. Definitely a huge loss dot-dot-dot

    Scott Shearer (DL retiree) Morrow, Ga

  5. Interesting that a government (such a reviled thing in America) can make this happen when an airline is cancelled but America’s multi-billion dollar airlines do not have the will to make something similar happen when they lose a few aircraft (MAX grounding) and would rather tell people to pound sand.

    1. This is disingenuous at best. The MAX cancellations have all taken place months in advance giving people plenty of time to reschedule their plans. Additionally, the CAA is chartering these aircraft for a one time incident while the MAX grounding has been going on for almost a year now.

  6. I would relook at your Titan data. I think you will find that Titan have been possibly asked to organise flights but are not operating these all themselves on Titan Aircraft. Not withstanding the fact that they do not have aircraft in their own fleet to operate 38 flights on Day 1. If you check you will see some third party flights operating with AWC flight numbers but they are not Titan frames. CUN MAN for example came in with AWC prefix but was a Wamos B747.

  7. Wamos is a busy carrier flying for other airlines. I see they are operating New York-Paris for Norwegian.

    Is Europe becoming the king of markets you can ‘have’ an airline but never fly your own airplane….LOL

    1. Well until Rolls Royce foxes it’s Dreamliner engines and the MAX flies again, probably. That’s the reason for Norwegian’s (and others’) wer leases.

      Norwegian was wet leasing Hi-Fly’s ex-SQ A380 recently. But I noticed that A380 being used for the Thomas Cook rescue flight from Antalya Turkey, with lots of tired pax using airstairs to climb in from the ground.

  8. The biggest issue with all of this is to the many great people who worked at Thomas Cook. The TC name may have been a long established one but the airline is relatively young (and was itself an amalgamation of others that were set up in the 1990s). The claim that the airline was profitable and only dragged down by the inefficient tour operation and travel agency side of the business is nonsense – if it wasn’t for the tour operator then there would be little or no business. Thomas Cook Airlines flew, in the vast majority of cases, Thomas Cook package holidaymakers – without these there would be no airline. Merging with other companies with massive debt (eg Airtours) and trying to service this debt whilst operating on paper-thin margins was always going to problematic.

  9. Short term, the A321s could be very valuable (especially to airlines that operate both the 737 MAX and the A320 family; the MAX likely won’t be back to full operation until summer 2020 at the earliest). Airlines that could be interested include (all of which had the MAX in their fleet and already have members of the A320 family):
    Air Canada (for summer 2019, they had to lease ex-Wow Air aircraft and wet lease other aircraft to keep most of their routes operating)
    American Airlines
    Turkish Airlines
    United Airlines
    Any other major airline that has both the 737 MAX and members of the A320 family in their fleet (many of the major European airlines are all A320 in regards to 150-seat narrowbodies)

  10. if it wasn’t for the tour operator then there would be little or no business. Thomas Cook Airlines flew, in the vast majority of cases, Thomas Cook package holidaymakers – without these there would be no airline. Merging with other companies with massive debt (eg Airtours) and trying to service this debt whilst operating on paper-thin margins was always going to problematic.

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