Wednesday, September 25, 2019, 15:00/3:00pm
Update Day #3
The following developments illustrate the complicated legal nature of the Thomas Cook UK bankruptcy. Continental European subsidiaries are doing all they can to avoid being dragged into forfeiture. They are striving to establish themselves independently, in cases securing necessary provisional bridging loans based on their independent financial stability. And in the case of Thomas Cook Germany, they are filing bankruptcy in order to extricate themselves from the assets of Thomas Cook UK.
TC Scandinavia Airlines
Despite bankruptcy – Ving’s air travel goes as usual on Tuesday
Ving’s air travel resumed on Tuesday, the travel company announces. “If you have a scheduled trip on Tuesday, your flight will go as normal,” Ving writes in a press release. “We live on and continue to invest in the Nordic countries as the Ving Group. We have succeeded in solving it with Thomas Cook, ” Vings communicator Charlotte Hallencreutz told TT.
Many of Ving’s customers were hit by canceled flights on Monday in the wake of owner Thomas Cook Group filing for bankruptcy early in the morning. Now the travel company has found a solution. In a press release entitled “Vinggruppen in the Nordic Region continues to invest“, the travel company points out that the Vinggruppen in the Nordic region has been an independent part since 2007 and that the decision to resume air traffic was taken by the company’s board. (TravelNews from Sept 24, 2019).
The Scandinavian Tour Operator brands of Tjaereborg, Globetrotter und Spies are also undertaking efforts to maintain operations.
Condor Airlines secures EUR 380 million in provisional bridging loan
The Federal Government of Germany and the State of Hessen (where Condor is headquarters) have collectively agreed to provide EUR 380 million in bridging loans to Condor Airlines so it can maintain air service for the next six months. The winter season is the traditionally slower booking time/low season for the airline. The European Commission in Brussels must approve this loan. It is unsure how long it will take until approval is secured.
The Federal Government of Germany defended its decision by saying that Condor is a profitable airline. Its revenues had been tapped by the mother company (Thomas Cook UK), and that its resources should not be lost to forfeiture in the face of the TC UK insolvency. There are just under 5,000 employees at Condor, with over 50 aircraft in the fleet (albeit many are older aircraft), serving over 80 destinations worldwide. Condor will be undertaking insolvency protection proceedings in order to try to remove its (profitable) assets from Thomas Cook in order not to lose everything through forfeiture in the wake of Thomas Cook UK’s insolvency.
All Condor flights are in operation. Thomas Cook Germany tour operator clients booked through September 26, 2019 cannot board their outgoing Condor flights, all of their arrangements have been cancelled. Here the statement from Condor:
“The insolvency of Thomas Cook Group plc in London has also affected the business operations of the German tour operators Thomas Cook, Neckermann, Oeger Tours, Air Marin and Bucher Reisen. Like all other airlines, Condor has been informed by these tour operators that travellers who have booked their package holidays with these operators may not be carried until including 26 September 2019. This applies to the outbound flight. Thomas Cook package holiday guests who are already in their holiday destination can board their return flight as scheduled.”
Thomas Cook Germany files for bankruptcy, wishes to maintain operations of profitable tour operator companies
Around 11:00am today it was announced that Thomas Cook Germany had filed for bankruptcy. This affects its tour operator brands Neckermann, Öger Tours, Air Marin and Bucher Reisen. Originally Thomas Cook Germany was seeking a provisional bridging loan in order to maintain operations, similar to Condor Airlines. But management realized that a structured insolvency (similar to Chapter 11) is necessary to extricate the assets from Thomas Cook UK. It is the intention of the German management to salvage tour operator brands and continue with their profitable sales and operations.
“We of course would have naturally rather avoided taking this legal step, but unfortunately there was not another short-term solution in the face of upcoming negotiations”, explained Stefanie Berk, Head of Management for the Thomas Cook GmbH. She apologized to clients, staff and suppliers for these developments.
Thomas Cook Austria is a subsidiary of Thomas Cook Germany. It has also suspended travel for its clients through September 26, 2019 and its fate lies in the hands of the German mother company.
Thomas Cook Belgium
Although its bankruptcy was announced, yesterday Thomas Cook Belgium had a workers’ council meeting. Here the management said that it had access to funds and that September salaries were secured.
Thomas Cook Belgium Retail is seeking court protection from creditors in order to protect assets and jobs for its ca 500 employees in 85 retail travel agencies throughout the country. They will need to present a plan. They work closely with Thomas Cook Germany and like the German conglomerate, they wish to remain/re-open for business.
Thomas Cook Netherlands
As reported yesterday, Thomas Cook Netherlands reported its financial inability to Dutch Bankruptcy Court, which in turn protects travelers. So far today there is no update concerning developments in the Netherlands.
The Dutch press notes that the Thomas Cook website until recently stated: “With our international Thomas Cook Group, we are represented in sixteen different countries, divided into four groups: UK & Ireland, Continental Europe, Northern Europe and Thomas Cook Airlines. In addition, expansion is currently underway in China”.
Thomas Cook Netherlands has consistently emphasized that Thomas Cook Germany is her most important partner.
To be continued…