There were shockwaves in the industry last week – and not just because of Boris Johnson’s Westminster shenanigans.
Yes, Chinese travel giant Fosun’s decision to stump up £450 million ultimately means the break-up of the 178-year-old company; the operator and airline businesses will be separated, with Fosun acquiring “at least” 75% of the former and 25% of the latter.
In July, Cook group chief executive Peter Fankhauser admitted to Sky News the arrangement, which will likely see existing shareholders’ interests “significantly diluted”, would be a “bitter pill” to swallow for “loyal investors”; shares in the operator currently sit at about 5.5p, and Cook has said it may yet even delist from the London Stock Exchange.
But for the travel industry at large (providing you don’t have shares in Cook), the historic operator’s survival is welcome news for the sector. As Idle Travel’s Tony Mann put it: “A good, strong Thomas Cook is good for the whole travel industry” (p9).
At a time when all sectors, travel included, are being rocked by both political and economic uncertainty, such substantial investment by Club Med parent Fosun is a notable confidence boost for the industry.
There are, of course, still questions about the deal; the TSSA union is demanding reassurance from Cook that staff jobs are safe, while agents have questioned how a new Cook might work with the trade.
But as the country continues to be gripped by further political chaos/shambles (take your pick), this hefty financial backing for Britain’s oldest travel firm is a significant – and welcome – statement of intent in the UK travel industry.