Thomas Cook

[Greebo]

It's going to be blamed on Brexit thoug, I can bet on that one.

To be fair Brexit will have just brought their demise forward. With Brexit insecurities holiday bookings were down and the exchange rate plummeting would cost them as well but there was major things wrong so would be unfair to blame their demise on brexit, it just sped it up.

But a no deal brexit will do that for a lot of businesses who are just hanging in there and the affects of it will be enough to tip more over the edge.

 

[rubberduck]

Thomas Crock!

 

[adam cool dude]

To be fair Brexit will have just brought their demise forward. With Brexit insecurities holiday bookings were down and the exchange rate plummeting would cost them as well but there was major things wrong so would be unfair to blame their demise on brexit, it just sped it up.

But a no deal brexit will do that for a lot of businesses who are just hanging in there and the affects of it will be enough to tip more over the edge.

Brexit doesn't put you 1.5 billion in debt. Lol. It is just a format that doesn't work anymore. (Booking a holiday in person) There will still be a niche market for specialist things like weddings etc or round the world trips but you average package holiday will be done online or through some sort of chat room.

 

[MissChief]

Can't imagine how a business relying on buying in foreign currencies and selling in Sterling could have been adversely affected by an extreme weakening of the pound...

Apparently they pay the hotels etc 90 days in arrears so with the plummeting of the pound against the euro, €150 for a weeks stay was £100. It’s now £140. Multiply that by hundreds if not thousands of rooms, hotels and holidaymakers and you can see why the game was up. Brexit wasn’t the cause, but it certainly gave them a push.

I wouldn’t be surprised to see a few more issues like this either.

 

[Minusorange]

Can anyone explain this image

How do you rack up 1.5billion in debt when the best profit isn't even 1/3 of that amount ? And the total losses (not including 2019) are higher than the total profits over the previous 11 years ?

 

[theone8181]

Can anyone explain this image

How do you rack up 1.5billion in debt when the best profit isn't even 1/3 of that amount ? And the total losses (not including 2019) are higher than the total profits over the previous 11 years ?

Large CEO bonuses? Cooking the books? Maybe bought some aircraft?

 

[mjt]

It's going to be blamed on Brexit thoug, I can bet on that one.

Brexit certainly played a part. Sterling fell through the floor, making trips to the Eurozone more expensive. Surely increased costs for them as they were listed on the FTSE?
Anyway, the fact they had over 500 high street shops didn't help? Who TF buys holidays on the high street these days?? Seriously, think of the overheads!
They merged with a bunch of companies and done ****** up.

 

[bainbridge]

Well just had an email from love holidays saying they can't find us alternative flights and are refunding me in full, offered me a £50 off voucher and I've found the same hotel for the same dates (albeit the outbound is 4 hrs later) for the same price but this time the flights are with easyjet. So that is now booked and from memory I'll need to go on the easyjet website to pay for us to sit together, that'll probably be about £40 each way for both of us so taking into account the £50 voucher will only work out about £30 dearer overall.

Hopefully loveholidays can honour the holiday I've just booked and haven't advertised something they're unable to fulfil. I went on the easyjet site to see what flights they had on offer for our dates and they were sold out, however I then bought a package deal including easyjet flights. I guess this is because loveholidays buy blocks of seats from easyjet knowing they'll sell.

Well I thought it was too good to be true, the new holiday I booked since being notified of our cancellation also cannot be fulfilled Love holidays invited me to call and discuss alternatives but when I rang the vr said they're too busy to speak to me.

I've a good mind to pursue a complaint, the initial cancellation is understandable but then being invited to book another holiday which they again can't fulfil is naughty.

 

[philstanbridge]

They had to pay a £1.5 billion debt in one hit, hence the above. It's utterly scandalous. Apparently someone forgot they had to pay it.

 

[Unisol Magic]

Maybe bought some aircraft?

Buying assets doesn’t affect profit and loss, only the balance sheet

 

[randomshenans]

If your business model is relying that badly on the current FX, then your business model is wrong.

 

[chaparral]

Can anyone explain this image

Looks like someone got a huge bonus in 2019

 

[Rotty]

'Consequential' being the operative word I think. The consequence of TC going under is we have no holiday, it's not like we're stranded and forced to pay additional costs to get home.... could be a grey area but I'll try my luck.

done it before and they paid the extra

 

[1pudding1]

Can anyone explain this image

How do you rack up 1.5billion in debt when the best profit isn't even 1/3 of that amount ? And the total losses (not including 2019) are higher than the total profits over the previous 11 years ?

Think it was the eventual write off of the debt they acquired when they bought MyTravel quite a while ago. The value of that company that Thomas Cook paid for wasn't really in assets I believe, but name/rep etc, that basically became worthless, and they eventually had to bite the bullet and write it off.

 

[philstanbridge]

That's about right from what I've been told (from someone who worked there until recently). MyTravel was bought about 11 years ago by TC but was never properly paid for. As a good will gesture they made a payment for £1.5 billion recently, hence that figure. I don't get how they didn't know about this. Someone did! It was inevitable that financial hit would kill the business. They had years and years to prepare and consolidate. Yet they kept expanding exponentially, in obsolete markets. Corporate greed and incompetence at its finest.

 

[adam cool dude]

That's about right from what I've been told (from someone who worked there until recently). MyTravel was bought about 11 years ago by TC but was never properly paid for. As a good will gesture they made a payment for £1.5 billion recently, hence that figure. I don't get how they didn't know about this. Someone did! It was inevitable that financial hit would kill the business. They had years and years to prepare and consolidate. Yet they kept expanding exponentially, in obsolete markets. Corporate greed and incompetence at its finest.

Absolutely shocking if true. No one will be held accountable I bet.

 

[The_Abyss]

That's about right from what I've been told (from someone who worked there until recently). MyTravel was bought about 11 years ago by TC but was never properly paid for. As a good will gesture they made a payment for £1.5 billion recently, hence that figure. I don't get how they didn't know about this. Someone did! It was inevitable that financial hit would kill the business. They had years and years to prepare and consolidate. Yet they kept expanding exponentially, in obsolete markets. Corporate greed and incompetence at its finest.

I think you're confusing balance sheets with the P&L. I don't know the specifics of their acquisition of MyTravel, but if they bought it years ago then they've now recalculated the value of that asset on their balance sheet rather than made a payment in the current accounting year.

Presumably they had debt secured against that asset or a total asset portfolio, and the devaluation of it put the lenders in a very different position, to the point where they were prepared to take pence in the pound through administration rather than through more money at the problem.

 

[A2Z]

Well I thought it was too good to be true, the new holiday I booked since being notified of our cancellation also cannot be fulfilled Love holidays invited me to call and discuss alternatives but when I rang the vr said they're too busy to speak to me.

I've a good mind to pursue a complaint, the initial cancellation is understandable but then being invited to book another holiday which they again can't fulfil is naughty.

Why on Earth would you re book with Love Holidays again? Why are you even using them? All these travel agents are dodgy as hell, when will people come to their senses and book directly instead of going via 3rd parties and then be surprised when the booking isn't honoured.

 

[esmozz]

Erm, yes we do and it happens all the time. It's called entering into administration.

https://www.gov.uk/put-your-company-into-administration

No, unfortunately in this case not, hence my referring to it being in part an airline. Under our system the Administrator cannot hold an AOC (Air operators certificate), without which all the aircraft are grounded.

Under Chapter 11 in the U.S. (and similar sytems elsewhere) the AOC (or equivalent) is'nt revoked allowing aircraft to carry on flying.

 

[philstanbridge]

I think you're confusing balance sheets with the P&L. I don't know the specifics of their acquisition of MyTravel, but if they bought it years ago then they've now recalculated the value of that asset on their balance sheet rather than made a payment in the current accounting year.

Presumably they had debt secured against that asset or a total asset portfolio, and the devaluation of it put the lenders in a very different position, to the point where they were prepared to take pence in the pound through administration rather than through more money at the problem.

I really don’t know how it all works but your account seems more accurate.

I was told by someone who worked there during the acquisition of MyTravel and until a few weeks ago that a single large one off payment had to be made as a “good will” gesture. What that even means in reality I have no idea, but the staff dealing with it knew the consequences of such a transaction. What I also found interesting I heard the accountant responsible for the acquisition quit just a few months ago. Conspiracy theory and all that.