‘A Sad Day in the Travel Community’: Fallout from Thomas Cook’s Collapse Continues

The first of the UK travelers stranded by Thomas Cook’s collapse last weekend are on their way home, kicking off the largest peacetime repatriation in the country’s history, an effort, by both the UK’s Civil Aviation Authority and travel professionals worldwide that is expected to drag on internationally over the coming days and weeks.

With the effort underway, travel industry executives from around the world are reacting to the news of the collapse of the 178-year-old British travel company that includes its namesake UK tour operator and airline.

ASTA President Zane Kerby called the news “a sad day in the travel community. With tens of thousands of lost jobs and hundreds of thousands of affected travelers, the impact is real and substantial.”

In a statement, Kerby also made sure to point out that the collapse of Thomas Cook is not representative of the travel industry as a whole and, according to ASTA’s research, the travel advisor channel is expecting growth in 2020.

“In fact, over the past six years, our yearly consumer research study reports a higher number of consumers turning to travel advisors each year. The vast majority of our members, mostly women-owned small businesses, indicate that their businesses are thriving. At the same time, the U.S. Census Bureau’s numbers for travel agency employment continue to grow, with an 8% increase over five years.

“Some in the media have been calling for the demise of the travel agencies since the dawn of the new millennium and the rise of online booking. If those prophecies were true, our travel advisors and our annual consumer research would be telling us a very different story.”

(Kerby’s statement, and the Thomas Cook news, came at the same time that the Airlines Reporting Corp. announced that airline tickets sold by U.S.-based travel agencies in 2019 were up 3% compared to 2018.)

J.D. O’Hara, president of Travel Leaders Group, which includes UK-based Barrhead Travel, said in a statement: “The failure of the iconic Thomas Cook brand is a significant loss to our industry. Our thoughts are with the employees and travelers who are impacted by this unfortunate turn of events.” Barrhead said it was working to get all of its travelers home.

Canada’s Transat, which had a partnership with Thomas Cook until Monday’s collapse that included an exchange of aircraft, said it was “very saddened to see such a great company as Thomas Cook collapse, and our heart goes to them, their clients and their employees.”

Travelers stranded, bookings canceled
The fallout from Thomas Cook’s collapse is being felt throughout the world. On Monday, Thomas Cook said that it had 600,000 customers on vacation with 150,000 coming from the UK.

According to Reuters on Tuesday, the 600,000 travelers include 10,000 French tourists, almost 9,000 Norwegians, about 1,400 Danish travelers, 2,884 passengers from Finland, almost 17,000 from Sweden, about 140,000 in Germany, 50,000 in Greece, 15,000 in Cyprus, between 25,000 and 30,000 in the Canary Islands, and about 45,000 in Turkey.

The first of those travelers started making their way back home on Monday. The UK Civil Aviation Authority (CAA) said it had operated 64 flights on Monday alone, bringing back 14,700 passengers. The UK CAA also said it would operate another 74 flights, bringing back 16,500 passengers, on Tuesday.

The CAA said that it has 13 days remaining in the program and about 135,300 passengers to bring back to the UK and it is “working around the clock” to do so.

“A repatriation of this scale and nature is unprecedented, and unfortunately, there will be some inconvenience and disruption for customers. We will do everything we can to minimize this as the operation continues,” Richard Moriarty, chief executive at the CAA, said.

Insurance and coverage fallout
Most travel insurers sent out statements telling clients that, in the wake of the Thomas Cook collapse, they may be eligible for trip cancellation and trip interruption benefits depending on their coverage. A lot of coverage would have requirements for purchasing the plane within the trip’s payment date or a certain amount of time out from the bankruptcy. All are telling clients to check with their providers to get specifics.

However, insurers told Travel Market Report that they were feeling very little impact for their North American customers.

Allianz told Travel Market Report that it has received eight calls from customers who may be impacted by the Thomas Cook situation and, so far, zero claims. For comparison, Allianz received over 5,000 claims related to Hurricane Dorian. 

“Allianz Global Assistance is available 24/7 to help customers who may need travel assistance due to disruptions caused by the Thomas Cook bankruptcy.  In addition, our customers who have had their trips canceled by Thomas Cook, can request that their travel insurance policy be transferred to another trip, or they can cancel the policy altogether and receive a full refund of their insurance premium," an Allianz spokesperson told TMR. 

TravelInsurance.com’s Stan Sandberg said that it is still “unclear how many U.S. travelers are affected by the collapse of Thomas Cook,” but that most will likely be based in Europe where they can get support on a country-specific basis.

For InsureMyTrip, most of its comprehensive travel plans do include financial default coverage, which Thomas Cook’s collapse would fall under.

In Canada, Richard Smart, the president of the Travel Industry Council of Ontario (TICO), told Travel Market Report that they have zero consumer claims right now, though claims are open for the next six months. “It’s way too early to know if it’s going to be small or big,” he said.

Smart did say that Thomas Cook left Ontario about six years ago and they do not have any bricks-and-mortar locations in the province, so the expectation of claims will be minimal.