LONDON – Thomas Cook, one of the world’s oldest and largest travel companies, is on the brink of collapse. Now around 150,000 British holidaymakers traveling abroad are worried about getting home.
The Thomas Cook confirmed Friday it was seeking £200 million in extra funding to avoid its collapse. If travel company goes under, Britain’s Civil Aviation Authority would likely be ordered to launch a major repatriation operation to fly stranded vacationers home.
The company says it is in talks with stakeholders to bridge a funding gap. The money required would come on top of the £900 million of new capital already raised, Thomas Cook reported.
“The recapitalization is expected to result in existing shareholders’ interests being significantly diluted. With significant risk of no recovery,” it said.
In May, Thomas Cook reported in half-year results that it had a net debt burden of £1.25 billion. It said political uncertainty related to Britain’s departure from the European Union had led to softer demand for summer holidays.
The Travel company said higher fuel and hotel costs also were weighing on business.
The Royal Bank of Scotland, one of Thomas Cook’s lenders, said the bank “has provided considerable support” to the tour operator. The Bank will continue to work with all parties in order to try and find a resolution, according to the Financial Times.
Any failure to raise the required capital could effect the jobs of 22,000 Thomas Cook employs around the world. Thomas Cook has 9,000 employees in Britain.
“It is appalling that banks show no allegiance to Thomas Cook when it needs help,” said Brian Strutton, general secretary of the British Airline Pilots Association.
“If Thomas Cook travel company goes into bankruptcy, it will cost the British taxpayer Mr Strutton added.
It would cost the UK government an estimated £600m to repatriate the 150,000 British holidaymakers currently abroad.