Mole investigates: It’s Thomas Cook, but not as we know it

Thomas Cook crumpled under the weight of £1.6 billion of debt almost exactly a year ago, leaving 9,000 UK employees without jobs and the taxpayer with a £100 million bill to repatriate up to 180,000 customers left stranded abroad.

Now it’s back, but different – and not everyone is rejoicing.

Thomas Cook has relaunched not as a fully integrated travel company with shops, an airline and a package tour business, but as a purely online travel agent selling dynamic packages based mainly on cheap easyJet flights and accommodation sourced from three bed banks.

Gone are the high street shops, the airline and the head office in Peterborough. In fact, all that remains of the former Thomas Cook is the website address, thomascook.com, and its familiar yellow ‘sunny heart’ logo.

However, its backers are the same. Almost. The owner, Chinese conglomerate Fosun, was also the biggest shareholder in the former Thomas Cook. Just weeks after the company collapsed last September, it snapped up the rights to the brand from the liquidators for £11million, sparking fury from trade union TSSA, which described it as a ‘paltry’ sum.

Also, Thomas Cook’s new management team consists of some of those who were at the helm when Thomas Cook crashed, including the new Chief Executive Alan French, who was former Group Strategy and Technology Director.

Former staff are furious

While no doubt some in the industry will welcome the rebirth of one of the UK’s oldest and best-known travel brands, some former employees – including those who were stranded overseas when the company failed – have reacted with horror.

Posting on Thomas Cook’s Facebook page, one ex-cabin crew member said ‘it killed her inside’ to see the brand rise from the ashes. A former Thomas Cook retail manager, who left years before its demise, described the company’s relaunch as ‘distasteful’ and ‘horrendous’, adding: "The customers and staff affected by the collapse must be heartbroken. The name should of [sic] stayed buried it’s not the Thomas Cook of the past. It’s a Chinese owned company which in the light of things quite honestly should never of [sic] been approved".

Some have questioned why the owners didn’t rescue Thomas Cook a year ago. In fact, Fosun and the banks with a stake in the business did offer to stump up a total of £900 million to save Thomas Cook last September, but TravelMole understands that the deal was scuppered by hedge funds who refused to give their backing.

Brand is tarnished

Others have queried whether the customers will feel confident booking with a company that failed so spectacularly. One former employee said even she wouldn’t put her faith in a company run by the same owners as the failed business.

Airline branding expert Peter Knapp of consultancy Landor said Thomas Cook is a name synonymous with failure. "But there’s a real opportunity for the brand," he added. "By learning the lessons from the past and being responsive to the needs of travellers and passengers as we adapt to the new ways of travel, Thomas Cook has the chance to be at the vanguard in a new era of travel, a brand that is empathetic to customer requirements, safety conscious and, crucially, agile.

"There’s no denying that this will be a challenge for the travel brand. Its name and recent history won’t help. But if it is able to confront this opportunity, learn the lessons from its past and tap into its heritage and pedigree in holiday destinations, it may stand a fighting chance."

Customers have also jumped online to express their fury. One tweeted that she’d been left £900 out of pocket by Thomas Cook’s failure, adding she would never book with them again. Another wrote: "Thomas Cook survives, profits will be enjoyed by Chinese investor, British workers have paid the price and UK economy will suffer. Not a good outcome from Britain."

Customer warning

Which? Travel Editor Rory Boland has issued a public warning to consumers considering booking with the new Thomas Cook, saying that ‘just because a brand is a household name does not mean you can necessarily rely on it to treat you fairly’.
 

"Many of the big online travel agents have proven time and time again through the pandemic they aren’t able to offer the same level of protection or customer service as better, traditional tour operators, making it difficult to secure refunds that customers are legally owed for cancelled holidays," he said.
 

"Anyone looking to book with Thomas Cook should check its terms and conditions carefully first to make sure they understand what rights they have if their trip is disrupted by changing government rules on travel corridors, and under what circumstances they can claim a full refund."
 

Clearly aware that Thomas Cook’s collapse is still fresh in people’s minds, its new Chief Executive has stressed that its holidays are ATOL protected and that customer payments go into a trust account until after they return from their trips.

Will it survive?

While it seems crazy to launch a travel business during a global pandemic, the new Thomas Cook does have many obvious advantages over its predecessor and other long-established travel companies. For a start, it no longer has a £1.6 billion debt to service, no loss-making shops draining its resources, no aircraft sitting on the ground and no rents to pay on office blocks currently sitting empty as its 50 staff are home workers.

Launched during the pandemic, it has had the opportunity to build a business well prepared for the ‘new normal’.
 

Also, it does have one of the most recognisable British brands, but we’ll have to wait and see whether that’s a good thing – or bad.