The news the travel industry had been dreading came through in the early hours of the morning when it was confirmed that Thomas Cook has entered liquidation, with more than 150,000 Brits overseas and 9,000 UK jobs lost.
An incredibly sad day for the industry. But before we can allow the news to sink in or even take stock, the industry needs to deal with its obligations to customers.
I wrote an article on Friday asking for some calm and highlighting that the UK’s travel industry is very heavily regulated for precisely this reason – to protect customers in the event of a tour operator’s financial failure.
The failure of Thomas Cook will have incredibly far-reaching consequences for the travel industry, particularly those who have sold Thomas Cook holidays or flights as a retail agent, or included Thomas Cook flights (or other services) within their own packages.
Here’s a quick summary of some of the legal issues to consider now that Thomas Cook has entered administration:
Thomas Cook package holidays – where the customer’s contract is with Thomas Cook (or the holiday is protected by Thomas Cook’s Atol or Abta bond)
Probably the financial protection most customers are aware of – flight packages are protected by Atol. Therefore, all customers who have booked a Thomas Cook flight-inclusive package holiday, whether already abroad or due to travel, should be directed to contact the CAA.
If the customers are already abroad and due to return to the UK by 6 October, the CAA is operating repatriation flights. After this date, customers will need to make their own arrangements back.
In addition to flights, the CAA will also make arrangements to ensure the customer’s holiday is provided as contracted – including the customer’s hotel.
If customers are having issues with hotels requesting additional payment from them or threatening to remove them from the hotel, customers should contact the CAA urgently.
Customers should not make payment to hotels unless the CAA has directed them to.
Unfortunately, there is a chance that hotels will not accept an arrangement with the CAA, which means customers may have to be moved to other hotels.
For customers who have not yet travelled – their holiday has been cancelled and they should contact the CAA for a refund. They should not travel to the airport. Please note that if the customer’s flights were not with Thomas Cook Airlines – those flights may still be valid, but the other elements of their package may not be. Customers should contact the CAA for further information on what to do in these circumstances.
Thomas Cook was a member of Abta, and non-flight packages are financially protected by an Abta bond. For customers already abroad, they should continue their holiday as normal. If they encounter any issues, such as hotels demanding payment, they should contact Abta for further information. Customers should not make payment again to hotels unless Abta has directed them to do so. Customers who have not yet travelled – their holiday has been cancelled and they should contact Abta for a refund.
Thomas Cook also protected its accommodation-only bookings under the Abta scheme. As such, any customers with accommodation-only bookings where their contract is with Thomas Cook should contact Abta for a refund. If they’re already abroad, Abta’s advice differs to the CAA’s, and Abta advises customers to settle their accommodation bill if required to do so, retain their receipts and submit a refund claim to Abta when they return.
For any retail agents who sold Thomas Cook holidays on behalf of Thomas Cook – where the customer’s contract is with Thomas Cook, or the package is otherwise protected by Thomas Cook’s Atol or Abta – those agents should direct customers to contact the CAA or Abta as outlined above.