Airlines come and airlines go. Especially in the low cost arena. It is hard to get too excited or broken up as it happens. This is not even the first to go this month. But with Thomas Cook the story is somewhat different.
Yes, it is an airline that failed. But it is also the one of the oldest and best known names in travel. To lose that would be a blow to the industry. And also something that the industry is likely to quickly forget as it races to try to keep the remaining businesses solvent. Thomas Cook is done, and it may very soon be forgotten.
We have worked exhaustively in the past few days to resolve the outstanding issues on an agreement to secure Thomas Cook’s future for its employees, customers and suppliers. Although a deal had been largely agreed, an additional facility requested in the last few days of negotiations presented a challenge that ultimately proved insurmountable.
It is a matter of profound regret to me and the rest of the board that we were not successful. I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years. Despite huge uncertainty over recent weeks, our teams continued to put customers first, showing why Thomas Cook is one of the best-loved brands in travel.
Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder’s spirit of innovation.
This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.– Peter Fankhauser, Chief Executive of Thomas Cook
The Thomas Cook brand predates flight by 60ish years. It survived wars and recessions and constantly adapted to the shifting markets. The company history as the originator of package deals nearly two centuries ago was all about making sure people got to explore, a focus still in play up to the very end.
Of late the company tried to move away from its package tour roots, selling more flight-only bookings rather than the flight/hotel/car combos it relied on for decades. The company started that shift around 2012, with strong results early. By 2016 Thomas Cook had ~45% of its short-haul seats sold as ticket-only while 90% of its long-haul market sales converted. As passengers now find themselves stranded abroad the shift becomes a particularly acute issue. Package purchasers are covered by the ATOL insurance scheme from the UK government that ensures repatriation. Ticket-only passengers are not. That said, when Monarch collapsed a couple years ago the ticket-only travelers were accounted for so it might not matter.
While the airline might not necessarily call itself a low cost carrier, likely preferring the “value carrier” nomenclature that matches its somewhat better than average LCC on-board product, the markets served and target consumers were very much in the LCC space. The competition was brutal and has crushed several European airlines in recent years, both long-haul and short-haul. The company played up its fleet flexibility and less-than-daily service on most routes as making it easier to adapt as demand shifted. That flexibility was not enough to stay alive.
Some may choose to blame the collapse on Brexit. A weakened Pound and general uncertainty about the country’s future, economic or otherwise, is not helping the leisure industry. But to blame it only on one factor would be a disservice to reality. As with the many other airlines that also collapsed recently there is more than enough blame to go around. That is of little comfort to the thousands of employees now out of work, of course, but a reminder that the world is nuanced and usually more than one factor contributes to anything happening, especially a large company going out of business.
As for the brand dying off completely, that might not really happen. It remains one of the company’s few assets as the liquidation process begins. Odds are someone buys it on the cheap. How it gets used going forward is anyone’s guess.
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