Thomas Cook was founded in 1841 as Thomas Cook and sons and now 178 years later they have gone bankrupt. It is a shock how such a huge empire came to ruins in this modern world where travel is the new sexy? The company which practically invented the term packages for the world now is in so much debt that it had to shut down while 1.5 lakh people were still on vacation through them and more than half of the people were from Britain. It was closed this Monday on 23rd Sept, leaving 21,000 people jobless.
What are the main causes of the company being shut down?
With the modernisation and digitisation of the whole world, Thomas Cook was still behind operating in the stone age. They had around 600 offices in the world and to book packages from them you had to either call them or go there office. I guess that was the main reason for its downfall, nowadays who has the time to go to an office to book a package when everything can be done online.
2. Thomas cook airlines
In around 2003, Thomas Cook started its own airlines, this is when they took a step near to their bankruptcy. They couldn’t handle the competition from TUI and it paved there a way to this shutdown.
3. Merger with Travel Group
The merger with Travel Group was the biggest mistake on the part of the company. Gradually the came down with even more and more debt that couldn’t be fixed.
When Britain left the European Union, it drastically affected tourism and the cost of oil for the airlines.
How does this affect India?
Thomas Cook India was acquired by Canada based Fairfax Financial Holdings (Fairfax) in 2012 after they bought 77% shares. Thus they are completely operational and the condition of the company is also good.
But the main setback is 90% of Britishers who come to Goa for vacation came through packages of Thomas Cook, thus tourism in India is going to be greatly affected.