Thomas Cook goes bust leaving thousands stranded
By Charles Kelly Author of Yes, Money Can Buy You Happiness and creator of Money Tips Podcast
People booking package holidays, as opposed to flight only deals, are covered by the ATOL protection scheme.
The law says your holiday must be protected if it is a package holiday. ATOL (which stands for Air Travel Organiser’s Licence) is a UK financial protection scheme and it protects most air package holidays sold by travel businesses that are based in the UK. The scheme also applies to some flight bookings, usually those where you book flights (including UK domestic flights) but do not receive your tickets immediately.
ATOL was first introduced in 1973, as the popularity of overseas holidays grew. After a number of high profile travel business failures left people stranded overseas the UK Government realised consumers required protection when their travel providers fell into difficulties. ATOL currently protects around 20 million holidaymakers and travellers each year.
If a travel business with an ATOL ceases trading, the ATOL scheme protects consumers who had booked holidays with the firm. It will support consumers currently abroad and provide financial reimbursement for the cost of replacing parts of an ATOL protected package.
The scheme is designed to reassure consumers that their money is safe, and will provide assistance in the event of a travel business failure.
Statement by the CAA (Civil Aviation Authority):
Thomas Cook has confirmed that all the UK companies in its group have ceased trading, including Thomas Cook Airlines.
As a result, we are sorry to inform you that all holidays and flights provided by these companies have been cancelled and are no longer operating. All Thomas Cook’s retail shops have also closed.
The Government and the Civil Aviation Authority are now working together to do everything we can to support passengers due to fly back to the UK with Thomas Cook between 23 September 2019 and 6 October 2019. Depending on your location, this will be either on CAA-operated flights or by using existing flights with other airlines.
If you are already abroad you will find all the information you need about your arrangements to get home on this website.
If you are due to depart from a UK airport with Thomas Cook Airlines, please do not travel to your UK airport as your flight will not be operating and you will not be able to travel.
This repatriation is hugely complex and we are working around the clock to support passengers.
For more information, visit:
ATOL – https://www.caa.co.uk/atol-protection/
You can also claim back money which you paid using your credit card under and even your debit card under the banking ‘charge back’ scheme. Contact your credit card provider or bank.
Thomas Cook is probably the oldest travel agency in the world with roots going back to 1841 when the original Thomas Cook arranged a rail excursion from Leicester to Loughborough.
Recently, it has become burdened with debt and has run out of cash and support from its bankers, leaving the directors no other choice but to put the company into liquidation.
What is the underlying problem?…listen to the full podcast for more thoughts and insights into the demise of the once dominant travel agent.
Word of the Day
Liquidation is the legal ending of a limited company, stopping the company from doing business, or employing staff. It is also possible to be technically solvent and unable to repay debt. This occurs when a company is “cash insolvent” and with assets that exceed its liabilities, but unable to source additional funds.
The primary difference between the two procedures is that company administration aims to help the company repay debts in order to escape insolvency (if possible), whereas liquidation is the process of selling all assets before dissolving the company completely.
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