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-   -   Thomas Cook Enters Compulsory Liquidation (https://www.flyertalk.com/forum/other-european-airlines/1988392-thomas-cook-enters-compulsory-liquidation.html)

wrp96 Sep 23, 19 12:40 pm


Originally Posted by dhuey (Post 31554722)
Yes, but I have no idea how the various schemes in the UK and EU handle failed air carriers. It sounds like there are special provisions for those who are stranded right now, but I don't know if there is anything helps those with future flight-only bookings.

In the meantime, I'm looking to do as you suggest: Book a replacement.

I believe the help is only in repatriation. It doesn't help if you haven't started your journey yet.

MSPeconomist Sep 23, 19 12:43 pm


Originally Posted by milepig (Post 31554635)
If I'm reading this correctly, this sounds like a good time to hang up and call again (HUACA). It sounds like your entire trip is intact except for the first flight leg and that you're willing to get to the second leg on your own. All you 're asking them to do is to remove a flight that isn't going to happen from your itinerary and otherwise hold them harmless? It seems like if you get the right person they could make an exception.

I don't think the OP should delete the first segment so quickly. It will be expensive to find a one way replacement flight. Separate tickets will push the risk of a misconnect (which would cause the remainder of the Condor ticket to be lost) onto the OP.

Often1 Sep 23, 19 12:44 pm


Originally Posted by wrp96 (Post 31554788)
I believe the help is only in repatriation. It doesn't help if you haven't started your journey yet.

That is the government-assisted repatriation.

Many will have other forms of protection through ATOL, credit cards, even some banking transactions, and travel insurance.

stevendorechester Sep 23, 19 12:46 pm

I feel sorry for the workers who are losing their jobs but even more so for the thousands of stranded passengers who are either stuck overseas or have had the vacations that they have been saving up for cancelled. It seems there are too many of these stories these days. All airlines should be forced to have an insurance policy to cover these situations. The hike in ticket prices would be negligible. Where I live, in Quebec, when you purchase through a travel agent passengers are covered for these situation through a compensation fund. The extra cost to passengers was about 35 cents per $ 100 dollars but now the fund has been self-sustainable through investments so there is no contribution required. If they need to restart mandatory contributions let the airlines fund it. That or require all airlines to keep money in trust and not part of their general funds until after the service is rendered. The passenger should always come first.

irishguy28 Sep 23, 19 1:14 pm


Originally Posted by dhuey (Post 31554722)
Yes, but I have no idea how the various schemes in the UK and EU handle failed air carriers. It sounds like there are special provisions for those who are stranded right now, but I don't know if there is anything helps those with future flight-only bookings.

In the meantime, I'm looking to do as you suggest: Book a replacement.

There is no "help" for people having only air tickets.

The focus for now is to help people get home; not to help people get away on their now invalid tickets. The ATOL protection scheme only covers package holidays, not flight-only bookings. In the case of ATOL-covered packages, those people whose booked holiday packages have not yet started should get their money back, or perhaps an offer of a similarly-priced replacement, though obviously the former is more straightforward to provide than the latter.

I doubt, however, that ATOL would have covered any "package" sold with an origin in the USA (I doubt Thomas Cook ever really sold any such packages, probably only seat-only tickets on flights)

You should attempt to get a refund via your card issuer or via your travel insurance; you will have to stump up for the costs of any new ticket - unless you - or the intending passenger - have some kind of insurance via your card or their travel insurance that covers this specific set of circumstances.

Boraxo Sep 23, 19 1:32 pm

I feel bad for all those anxious tourists, but nobody is going to miss the absurdly high forex markup at their ATMs. One of many reasons we avoided Thomas Crook...

Some key lessons here: (1) Pay more to fly first world commercial airlines rather than special charters (2) Use a credit card that includes good travel insurance on all tickets (e.g. Chase CSR) (3) Don't leave your passports with hotel management (reports of hotel owners requiring guests to pay for their stay, as TC had not paid them yet).

Often1 Sep 23, 19 1:33 pm


Originally Posted by stevendorechester (Post 31554816)
I feel sorry for the workers who are losing their jobs but even more so for the thousands of stranded passengers who are either stuck overseas or have had the vacations that they have been saving up for cancelled. It seems there are too many of these stories these days. All airlines should be forced to have an insurance policy to cover these situations. The hike in ticket prices would be negligible. Where I live, in Quebec, when you purchase through a travel agent passengers are covered for these situation through a compensation fund. The extra cost to passengers was about 35 cents per $ 100 dollars but now the fund has been self-sustainable through investments so there is no contribution required. If they need to restart mandatory contributions let the airlines fund it. That or require all airlines to keep money in trust and not part of their general funds until after the service is rendered. The passenger should always come first.

Just pay with a credit card. The full unused value will be refunded. No need for a complex scheme with holdbacks. The problem lies in purchasing new tickets. Hence the need for repatriation.

Holding back cash access until the service is rendered is not workable. The working capital is exactly what keeps many carriers afloat. In order to perform tonight's flight, they had to make the lease payment yesterday.

MSPeconomist Sep 23, 19 1:37 pm


Originally Posted by Often1 (Post 31555004)
Just pay with a credit card. The full unused value will be refunded. No need for a complex scheme with holdbacks. The problem lies in purchasing new tickets. Hence the need for repatriation.

Holding back cash access until the service is rendered is not workable. The working capital is exactly what keeps many carriers afloat. In order to perform tonight's flight, they had to make the lease payment yesterday.

And don't let your hotel keep a passport beyond the time needed to verify your identity and register your stay with police if required.

However, if someone had valuables in the hotel's front desk safe deposit boxes, this could be a problem too if the hotel is insisting on payment before departure.

stevendorechester Sep 23, 19 1:43 pm


Originally Posted by Often1 (Post 31555004)
Just pay with a credit card. The full unused value will be refunded. No need for a complex scheme with holdbacks. The problem lies in purchasing new tickets. Hence the need for repatriation.

Holding back cash access until the service is rendered is not workable. The working capital is exactly what keeps many carriers afloat. In order to perform tonight's flight, they had to make the lease payment yesterday.

Good point about holding cash back, I thought it was workable since travel wholesalers work that way ( at least in Canada). I always pay with a credit card but I'm more concerned about repatriating clients. Taxpayers should not be on the hook for this which is why I think there should be mandatory default insurance, paid by the airlines. I doubt it would increase ticket prices you're talking about less than a dollar per ticket. People will not object to paying it. I think it would actually strengthen the public's fate in these ultra LCC's if passengers know that no matter what they will not lose one penny when an airline suddenly ceases operations.

nk15 Sep 23, 19 1:58 pm


Originally Posted by EMIC (Post 31553494)
Firstly - to the many thousands who are now without work - hope you can revive your career and prospects quickly.
Secondly - to all the suppliers - globally - who will now have to fight for their monies - ATOL etc does not cover as much as you are led to believe.

What I find extremely ironic - and I am not involved with finance / banks - so my comments are very 'top-line'- is that after securing c900m from a Chinese partner, it was then RBS and Lloyds who apparently then demanded an additional c200m cash for daily operations - so I read it as those two banks demand as being the final straw / nail. The government will not advance a loan of c200 which is one third the cost which may now be paid by the HM Treasury - one so as not to set precedence - secondly it contravenes some EU laws.

Ironic that RBS and Lloyds majority shareholder is..............................the UK Government????? And Condor may still continue to fly as it is applying to the German Government for emergency funding - maybe I missed the news of Germany leaving the EU?

(Bolding above is mine)...The sinister view is that someone wanted TC to fail and put an extra hurdle in the last minute...As it was stated earlier, somebody will make a profit out of this, after the loses have been socialized and disbursed among consumers/partners, somebody will buy the healthy parts with a profit, and BA will have less competition/wider customer base...Or someone may say that's just capitalism and doing business...

Ldnn1 Sep 23, 19 2:11 pm


Originally Posted by iflyjetz (Post 31552779)
Wow. I hadn't heard anything about them having financial difficulties. Makes one wonder how many more European airlines are teetering on the edge of insolvency.

Wow. Given you are someone who has relentlessly professed your own expertise on such matters in the Norwegian thread, you have completely discredited yourself with this comment.

Thomas Cook's woes have been known for years - it has been on the brink several times - and its increasingly urgent situation has been repeatedly in the press these past few months. This has certainly not come as a major surprise to those with proper knowledge of the industry.

dhuey Sep 23, 19 2:13 pm


Originally Posted by Boraxo (Post 31554999)
I feel bad for all those anxious tourists, but nobody is going to miss the absurdly high forex markup at their ATMs. One of many reasons we avoided Thomas Crook...

Some key lessons here: (1) Pay more to fly first world commercial airlines rather than special charters (2) Use a credit card that includes good travel insurance on all tickets (e.g. Chase CSR) (3) Don't leave your passports with hotel management (reports of hotel owners requiring guests to pay for their stay, as TC had not paid them yet).

(1) Maybe, how much more? With a big enough gap, it makes sense to go with the cheaper option.
(2) That can be useful, but just about any credit card company will be willing to reverse the charge if the travel organization goes belly-up and doesn't deliver the flights, hotels, etc.
(3) Good advice.

Often1 Sep 23, 19 2:22 pm

If it is a US-based card, it is a statutory requirement. If the merchant vendor is in any type of formal insolvency proceedings, e.g. bankrupt, the card holder is required to charge back the item.

This is why card issuers increase the holdback for merchant vendors as their financial condition worsens. Banks likely have plenty of cushion to deal with chargebacks arising from this mess.

But, none of this gets you home and, absent a repatriation effort, you are stuck somewhere looking at what is likely a very expensive ticket.

MSPeconomist Sep 23, 19 2:40 pm

In some sense, ULCC carriers *should* be riskier (or should be allowed to be riskier) and customers should be allowed to self insure if they wish to handle it this way. With mandatory insurance, who insures the insurance provider when there's a very substantial incident? Also, mandatory insurance would decrease incentives for these ULCCs and package tour agencies to be responsible, partly because potential customers will feel covered anyway and hence won't bother to investigate and send their business to airlines and agencies that are in better financial condition.

I suspect that part of Thomas Cook's problem was that credit card companies were increasingly holding back payments in case insolvency would lead to many chargebacks.

From the viewpoint of consumers, part of the problem is that many people apparently travel in this way with no emergency funds. Maybe instead of insurance, the customers should be required to escrow an amount equal to the cost of repatriation (but I know this won't happen). Yes, the government should help with evacuations when there are natural disasters and major military/political incidents and perhaps the government can help with repatriation logistics in cases like this, but why should citizens and residents expect their government to arrange and pay for their return flights if they're stranded penniless in some foreign vacation destination? Taking the vacation was a choice as was purchasing it from Thomas Cook.

Boraxo Sep 23, 19 2:52 pm


Originally Posted by dhuey (Post 31555135)
(1) Maybe, how much more? With a big enough gap, it makes sense to go with the cheaper option.
(2) That can be useful, but just about any credit card company will be willing to reverse the charge if the travel organization goes belly-up and doesn't deliver the flights, hotels, etc.

(1) Obviously everyone has their own risk tolerance for risk v. reward (savings) on airline bookings. Example: Spirit Airlines. Personally I avoid Spirit having heard horror stories from everyone I know who has flown them. Particularly for irropps. But their flights still sell out so clearly some customers are willing to assume the risk. Another example: Interjet. Could have booked a very cheap nonstop for holiday travel. Instead, went with a very high-priced UA itinerary because I don't want to assume the risk my family will be stranded returning from Mexico.

Anybody who booked Thomas Crook should have known the risks - they weren't the only alternative to most of these destinations - but probably cheaper than BA, Virgin and even Ryanair & Norwegian.

(2) Of course consumers can do chargebacks on their tickets. BUT THAT WON:T GET YOU HOME. That is why you need good travel insurance - so you can call someone and get their assist in paying for an overpriced flight to get home. Assuming airline/travel company insolvency is covered by the policy. Both Amex and Chase provide automatic coverage for airlines booked on their cards - and one of the reasons I book all flights on these cards despite other cards offering higher bonus for airline spend, etc.


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