Venerable travel firm Thomas Cook has been forced to cease all operations worldwide after last-ditch rescue talks with investors failed, forcing it into compulsory liquidation. It's been reported that about 9,000 British jobs are now at risk.
The grim news has sparked a mammoth rescue operation with the UK government now forced to repatriate an estimated 150,000 British holidaymakers who would otherwise be left stranded overseas.
Operation Matterhorn is the largest repatriation to be conducted outside of war some 45 jets have been chartered to fly some 16,000 holidaymakers’ home today alone.
The government had been asked for a bailout to the tune of £250m to keep Thomas Cook in the air but this was rejected by Transport Secretary Grant Shapps on the grounds that it would only delay the inevitable. He said: “I fear it would have kept them afloat for a very short period of time and then we would have been back in the position of needing to repatriate people in any case.”
Thomas Cook was one of the world’s best known holiday brands, tracing its heritage as far back as 1841 to the reign of Queen Victoria but had come unstuck in recent years by failing to adapt to the rise of the internet which has reduced demand for traditional package holidays.
The news serves as a further hammer blow to embattled High Street’s with 600 retails stores shut down as a result of the collapse, with 22,000 jobs in peril worldwide.
Thomas Cook’s demise has lifted the share price of rivals, notably TUI, British Airways owner International Consolidated Airlines Group and EasyJet, which look set to benefit from decreased competition.
Nick Hynes, co-founder and chief executive at digital transformation agency Somo, helped build Europe's first airline online booking service back in 1996.
He blamed Thomas Cook's lack of innovation for the liquidation. "It survived for 23 years by living off large amounts of consumers living off the previous way which travel was distributed. The winning strategy for Thomas Cook from the 1980s continued to be its principal strategy through the 1990s and 2000s.
"And to say today they still have 540 physical stores open in the UK market is just astonishing. Thomas Cook today in the UK is almost as much of a property business as it is a travel business. Whereas, all the other major travel giants are now principally the providers of travel solutions online. Companies like Expedia, Hotels.com, Travelocity, Kayak, Travel Supermarket, LastMinute.com."
"Thomas Cook has got a shrinking market that wants the actual package product and it has not revolutionised its way of distribution. It has relied upon brand for awareness but it's not trying to dominate the distribution routes, which is where the online retailers have now moved into their market."
He concluded: "Thomas Cook was a leader. And then it became increasingly redundant. But if it's got the right management and the right approach and the right funding, it can follow; it can become a follower and a follower strategy can be incredibly successful in the digital internet era."