Thomas Cook rescued from debt doom

Holiday giant out of danger zone

What’s happened to Thomas Cook?

News broke today of Thomas Cook and their financial troubles. It is a massive group with £9bn in annual sales, 19 million customers a year and 22,000 staff operating in 16 countries.

However, today the BBC reported Thomas Cook in £750m rescue deal talks. It is in talks with Fosun the largest shareholder in the company. Although not yet finalised it looks likely that the Chinese investor will buy the tour business.

Thomas Cook’s chief executive, Peter Fankhauser, said the proposal was “not the outcome any of us wanted” but was “pragmatic”.

Recent financial history

Thomas Cook undertook a strategic review in February 2019 and in March, it announced plans to close 21 of its high-street holiday stores, costing more than 300 jobs, and in May, it revealed a £1.5bn half-year loss.
In December last year shares dropped 60% in value over a period of just 8 days. This was due to concerns over the company’s borrowings (it issued a second profit warning in two months). The travel company’s bonds also dropped in value and the cost of insuring its debt against defaulting on payments reached a record high.

In June this year shares rose 24% when it said it was in talks with Fosum to sell its tour operator business. Today shares opened up with a drop of 40% on news of the proposal.

aeroplane in the sky

So what happened to Thomas Cook?

1) In 2010 Thomas Cook linked up with the Co-operative Travel chain. This provided Thomas Cook with about 1,400 shops but at a time when consumers were beginning to book more and more on line.

2) It has had to face a number of reputation issues. These have included the death of two children. Mother of children killed on holiday says Thomas Cook ‘abhorrent’ after an inquest jury reached a verdict of unlawful killing and ruled that Thomas Cook had breached its duty of care. There were deaths at a hotel in Egypt. Egypt hotel deaths: authorities blame E coli, Thomas Cook ‘notes’ announcement In all the cases Thomas Cook were criticised for their handling of the issues both during and after the events.

3) Brexit. Clearly, as with any other industry, Brexit has affected business. In the holiday industry uncertainty has led to a lack of confidence in booking holidays.

4) Good weather last year with a long heatwave was good news for tourism in the UK but not for travel companies as people chose to holiday at home rather than going abroad.

5) Although people like the security and convenience of a package holiday, an increasing number of people are booking accommodation and flights separately. And since July 2018 protections for these consumers improved with the Package Travel and Linked Travel Arrangements 2018

6) The charges for seating and keeping families together are high and add to the cost of holidays. Although not alone in making these charges, Thomas Cook is relatively high. In August 2017 I undertook a comparison of holiday companies and analysis of these costs which showed that Thomas Cook were the highest. These prices have now risen even more. Consumers don’t like feeling conned and are becoming aware of these additional costs and factoring them in before booking. Greed in the wrong places doesn’t work.

7) Uncertainty about the group leaves consumers unnerved. Whilst holiday makers holidays are protected and there should be no problem, news around financial problems unsettles consumers and they will naturally be cautious of booking with Thomas Cook.

8) When I asked on social media what people thought the reasons for Thomas Cook’s troubles were, they answered with the market not being there as point 5 above. But that affects all holiday companies and people said that pre-flight service was poor. With so much competition around companies whatever the sector, the need to improve customer service is paramount. It is becoming more and more important to stand out and one way is by providing the best customer service. We saw it playing a part in Debenhams decline.

Lessons to learn from Thomas Cook difficulties

1) Reputational damage doesn’t go away. People usually have short memories but when you have issues as every company does, how you handle it matters immensely. When KFC had a chicken shortage it dealt with poor publicity and turned it round. KFC chicken shortage and Twitter getting it right. Whilst the deaths were far more serious, the handling of the cases such as not apologising, not looking after the family and just not doing the right thing and certainly not seen to be doing the right thing left its mark. Companies need to do the right thing and be seen to be doing the right thing or pay the price.

2) Keep ahead of the game. Being innovative and creative is essential to survive and thrive in this current climate.

3) Charging consumers more, with added costs not advertised in the original package such as the seat allocation, (unless you want to risk the random allocation) is a growing annoying trend that really frustrates consumers. Honesty and transparency will win more loyalty and return customers than the get rich quick from adding costs here and there. It doesn’t work.

4) Customer service. With the ongoing increase of online shopping there is only one thing left to make you stand out from the crowd whether in store on online after price: Customer service.

5) Poor financial performance has a knock-on effect and shakes consumer confidence in a company and its brands. Who is going to risk their hard-earned annual holiday with a company that looks like it might go under? That’s the main reason why Fosun’s bail out is such good news for Thomas Cook customers and prospective customers

Ensuring that consumers can always contact you quickly and efficiently in the way they want to contact you, not the way you want to contact them. Offering help where appropriate and keeping customers informed are all key customer service issues for consumers.

The analysts will be keeping a close eye on Thomas Cook. From what consumers tell me they have a lot more to work to do than just getting a financial injection. It won’t be just analysts watching Thomas Cook, consumers will be too.

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Foreign Office in epic fail on passport validity information

My long journey of confusion – Foreign Office provides conflicting information

Check your passport!

Here’s a story about why it’s important to check passport expiry dates before you book travel. And why you can’t always trust the Foreign Office advice because it’s a mess!

Have you checked your passport? Beware conflicting information from various agencies!

Not enough time left on passport to travel

A traveller wanted to surprise her husband with a holiday to Cape Verde. Their 10 year old son had kept it secret too, not telling his father until 6 months later when they were on the way to the airport. They went through check-in no problem, they bought stuff from the duty free shops and went through passport control. All of them were looking forward to their week away. Her story is on Trip Advisor

Imagine the disappointment when staff at the gate told them they couldn’t travel! Their son only had three weeks left on his passport. What is the issue? Well, the family were travelling with Thomas Cook. Thomas Cook’s documents advised them that they should follow the Foreign and Commonwealth Office (FCO) guidelines for travel to Cape Verde. The FCO website stated only that passports must last the duration of the stay.

The Complaining Cow investigates passport problem

Then The Complaining Cow realised she was in exactly the same situation! Yup! My family and I were due to travel to Cape Verde less than a couple of weeks’ later. My son’s passport also had fewer than 6 months left on his passport, so I began to panic a bit!

We couldn’t even get a FastTrack passport (at exorbitant cost) because for children you have to allow at least 7 days for processing. With the Easter bank holiday included it meant we simply didn’t have enough time. So, I set about trying to get some clarity. That was less straightforward than you would think! We were flying with TUI UK (formerly Thomson) so I started with them and asked if we were okay to fly…

Who said what about how much time needed on a passport in order to travel

OrganisationAdvice providedAgree with Cape Verde Embassy?
TUI customer services ‘phoneFine with them, if I can get letter from Passport Office to say acceptable.Yes
TUI customer services emailYes, you can travel.Yes
TUI Twitter teamWe recommend all passengers have at least six months remaining on their passport prior to travel as it covers all destinations we offer however, each destination has different requirements which can be found on the GOV UK website. As per the GOV.UK website, passports must be valid for a minimum of six months from the date of entry into Cape Verde.No
Thomas CookYes, you can travel for the remaining Summer flights (not ceased until Winter).Yes
Passport OfficeDo not do this, not their role, advised contacting the Foreign and Commonwealth Office.Couldn’t give advice
FCO website“The authorities in the country or territory you’re travelling to are responsible for setting and enforcing the rules for entry.”

“Your passport should be valid for a minimum period of 6 months from the date of entry into Cape Verde.”

Yes

 

 

No

FCO on phoneContact the Honorary Consul to Cabo Verde in London.Don’t know
Consul to Cabo Verde in LondonIncorrectly advised to contact him, contact the nearest Cape Verde Embassy in Rotterdam or Brussels.Couldn’t give advice
FCO emailOur travel advice is updated whenever we become aware of new information. The authorities in the country you are travelling to are responsible for setting and enforcing the rules for entry.  Contact the Cape Verde Embassy in either Brussels or Rotterdam and seek their advice.Yes but advice on website is contradictory
FCO Consular Contact CentreThe Travel Advice team updates their pages as soon as they have official confirmation of a change. Whilst we understand that this change does not allow much time for a potential passport application, the British Consulate cannot confirm entry to Cape Verde contrary to our own current travel advice.Refers to website info which is Yes… and No
CV consulate in Brussels emailPassport for entry and exit from the territory, valid for a period superior to the authorized stay duration.Yes
CV consulate Brussels websitePassport for entry and exit from the territory, valid for a period superior to the authorized stay duration.Yes
International Air Transport AssociationIn general, airlines follow the regulations set by each country in terms of the requirements for entry into or transit through the appropriate country.Yes
IATA websitePassports need to be valid for six months from arrival.No

 

Ridiculous. So, TUI customer services on the phone, the TUI social media team and customer services email teams all said something different. The FCO has shown itself to be utterly useless in providing basic information to travellers!

Conflicting advice from various bodies regarding ability to travel with short time on passport

There seems to be no reason for any change in advice. According to Thomas Cook the FCO changed its advice in line with the International Air Transport Association (IATA) website Timaticweb (https://www.timaticweb.com). This states that passports need to be valid for six months from arrival in Cape Verde. There has been no change in the advice from authorities in the country being visited whatsoever. So, the FCO says “Our travel advice is updated whenever we become aware of new information.” But no-one can tell me what the new information was!!! Maybe it was the IATA. The IATA said to me:

“It is the responsibility of the air traveller to ensure that they have sufficient travel documents for their destination and any transit points.  In general, airlines follow the regulations set by each country in terms of the requirements for entry into or transit through the appropriate country, however in certain circumstances airlines may make exceptions in the case where the immigration authorities do not or rarely enforce applicable regulations.”

But that contradicts what they appear to be saying to airlines.

A Thomas Cook spokesperson said:

“We recognise there is inconsistent information around entry requirements for Cape Verde and we appreciate the confusion this causes for our customers. The FCO has recently changed its advice to align with the International Air Transport Association (IATA) website Timatic, which states that passports need to be valid for six months from arrival in Cape Verde. Due to the conflicting information and change in advice, we have advised all our UK departure airports to allow customers to travel whose passports are valid for less than six months, but valid for the duration of their stay, for the remainder of this season. For the Winter 18/19 season, we will ensure all our customers are aware that their passports need to be valid for six months from arrival in Cape Verde.”

IATA said:

“The regulation that passports must be valid for a minimum of 6 months from the arrival date has been published in Timatic since December 2016.  We have verified this several times since with both the immigration departments and airlines, and it has not changed since then.”

The Foreign and Commonwealth Office said that it updates information when it becomes aware of it. Aside from the fact that it actually has contradictory information on its website, is it possible it only became aware of the IATA change 15 months later?!

Travelling and checking passport times

Whatever way you look at it, the safest thing to do whether travelling to Cape Verde or anywhere else is to ensure that your passport has at least 6 months left to run!

Look out timber frame on a beach "researching, booking and complaining aabout holidays and flights. Tips, ideas and your rights"

 

For links to various articles about pre, during and after holiday advice about rights etc see All you need to know about booking/complaining about holidays/flights.

 

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