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Pretty balanced article to be fair. I always wonder about a parallel universe where they merged with TUI, then MyTravel and First Choice wed, but consolidation was always going to happen. Four was going to become two at some point.
I agree, however, with everyone who says the Co-Op thing was bonkers. What was Manny thinking? You can see why the retail staff hero-worshipped him (2Gether Antalya 2010... if you were there, you know...) but I think it's telling that Jet2 have leapfrogged into second with absolutely no physical high street presence. Had TC gone in big online ten years ago, I truly believe that the near-death episode of 2011 would never have happened.
I'd love to dis-invent the Internet, but it's never gonna happen. We live in a "Go Online" world.
Ian Tayor fails to mention The Telegraph report's main concern - the sheer incompetent management by the senior executive and poor governance and weak strategic oversight of Thomas Cook by its Board of Directors. The first strategic blunder was the multimillion pound (£10M) rebranding of Thomas Cook ( a world famous and household name) as JMC. This had Thomas Cook and John Mason Cook spinning in their graves. It was a disaster and soon dropped and switched back to Thomas Cook. The second bad decison was the purchase of Co-Op Travel by then MD - Manny Fontenla-Novoa, followed by subsequent rationalisation and closure of approx half the TC retail estate. TC competitors - TUI and Jet2 invested their big money in slick on line digital sales channels, websites and apps. The third poor descison was purchase of My Travel (formerly Airtours) and the headache of intergating the airline with TC's airline. Whereas TUI and Jet2 grew sustainably and organically at a controlled and realistic and manageable pace.
The business is a basket case how it currently is constructed and i am sure yield has been further damaged with the recent hot weather but more importantly the reluctance of consumers to book Thomas Cook when there are other operators who appear safe and have available Holidays and Seats on their Aircraft. so losses will be greater than anticipated 6 weeks ago..ATOL /CAA will have a huge input into any deal and will need to be satisfied the companyis a going concern and has the required free assets to satisfy its ATOL remaining valid.I think there is a lot of hot air to keep the business rolling on until September lets face itin wake of max8 issues how would you even contemplate a re pat exercise akin to Monarch x2 when there is simply no available spare Aircraft capacity..a controlled close down as alternative to Fosun is the only option if this deal does not get across line.
Finally somebody says shareholders are the owners of the company,I was thinking we were living in a communist country controlled by Chinese and bond holders. Lol... Let me make u a question, why will Fosun inyect 750 M £ if with that they will loose 200 M £.already on shares ? Not a good way to start an investment....
Why will bond holders will change cash for tons of equities and why the company has to reduce the debt to ZERO.? Is there any imperious necessity on zero debt?
Why shareholders will approve a capital increase that leads them to loose all in exchange for a zero debt?
Couriuosly nobody ask this questions....
Your entire point is based on the point of view that there is material goodwill left in the business and as if there are zero debts or debts that can be restructured. Reality: there isn't! And this is why all the legacy ownership has to be reset to zero against the debt. The business is worthless and anybody investing would need to take 100% of nothing rather than a smaller amount of something - which isn't the case.
Do shareholders deserve to lose money, no. Is it right and proper that they do if the company is in a perilous state - yes. If you want to argue a different point you either don't understand how maths or capitalism work.
Man The only thing they have to do it to slip the company in 2 ,reduce debt 1 billion giving the airline to bondholders and banks ,raise capital with Fosun in tour operator ,You don’t need to let the debt to zero ,nobody does.You were explaining the case when a company is into administration .Thomas cook just opened 20 new hotels last year .Plenty of speculators here buy cheap sell expensive ... fear is the key .Time will say ...just a couple of months and with the hard brexit promoted with this new PM , slots are gold.
I’m very aware that anything I’ll say won’t change your opinion but I have to tell you,and please don’t insult me with your cheap rhetoric.
If you think the business is in any state other than an 'all but in name' administration then you haven't done your research or carry more positivity than Chris Akabusi and Davina Mccall on a camping holiday in Blackpool!
There is no cash, there are no piggy banks - creditors need paying and there is no cash left, which is why the debt exists. This isn't a waiting game - the debt is enough to sink even a massive corporation, and TC has only survived on the supposed legacy of its brand - imagine any other business TC's size having that much debt floating around unchallenged! Even writing 90% off would inhibit such a relatively small company such as TC, how would they fund an on-going 'new' business with all that debt slowing everything down and clogging up/inhibiting real growth and business change - which is so desperately needed.
I am honestly surprised (as I'm sure TC's Directors are that HMRC, ATOL, FCA and others have allowed them to continue to trade at what is probably almost certain an insolvent - or close-to-insolvent position for such a period of time). I know from a Trade/Supplier point-of-view their covenants have been broken plenty of times recently - which is a sign their banks have pulled all but essential support.
The reality is that there is little-to-zero value in nearly all its assets, the Retail network is stale and too underinvested to take seriously, the scale is just legacy and its an ever-defeated channel.
The Airline is worthless, lots of very old leased aircraft, the only value is in its landing slots - which the airports will not want to offer up to anything other than Leisure Customers (due to the heavy impact of less trade from holiday-makers).
Their almost unlimited number of off-shoots (TC Sports etc) that are too specialist to be expandable are of no real value, the TC product is no-where near diverged enough and very unappealing/aged, especially against TUI's line-up and nearly against Jet2 who bought up all the best hotel stock in 16-17 and are now winning. Hence their now number 2 market position.
The best outcome would be a sale of the Airline to someone who wants the slots, but could also continue flying to all the holiday destinations and cross-sell those seats to business travellers (near impossible, sun and suits don't match) - none of the budget airlines need the extra capacity and all the regional airlines (BA et al) just aren't interested in taking Mr & Mrs Smith to Tenerife, little to no profit, no natural brand extension, bad demographic match/fit, under-utilisation of the fleet, unionisation troubles, restrictive covalence - no logic. Even Lufthansa the basket-case of all basket-cases gave TC a solid and speedy swerve.
TC's online proposition is a Joke, and not a very funny one! I won't even bother to critique it, as the joke tells itself.
The best outcome would be for Jet2 to acquire the TC brand and naming rights, immediately close all but essential central functions and get Pickfords to transport everyone absolutely necessary to Leeds, run TC as a branded white label affiliate of Jet2, if there is use for some high street Agencies then keep a handful open or offer exceptional deals to off-load them regionally within the established Indie community as TC franchises (however, why would any business take the risk of Tupe of 5 staff per shop with 20+ years redundancy risk to pay down the road!)
Fosun see TC as nothing more than a foot-hold in to a new market, I think they are savvy enough to know there is no real value - however the brand resonance could allow them some real benefits, but that would be more about how they sell 'european' product domestically in China with a fully wrapped banner such as TC rather than what they can utilise TC for as an existing business.
It's really sad and a really bad outcome for what was previously at times a real pioneer and wonderful business, it just didn't move with the times, was ran badly, extended itself too thoroughly and is now suffering the consequences of under-investment, poor leadership, bad propositions and expensive legacy. I truly, truly hope someone can save it - but I fear there isn't time. If you work for TC my love and loyalty is with you, my head is elsewhere.