Thomas Cook asks Government for Bailout in Funding Race
Tour operator Thomas Cook has approached the Government in an attempt to plug a gap in its Funding.
The travel company could fall into administration this weekend unless it finds £100 Mil in extra Funds needed to secure its future.
If holidaymakers are hoping the Government will save the day, they may be disappointed.
A collapse would leave 140,000 UK holidaymakers stranded.
While a private sector deal may still be possible, the noises coming out of the Government at the moment suggested the UK taxpayer was unlikely to become Thomas Cook's saviour.
The troubled operator hoped to seal a rescue led by China's Fosun this week. But the creditor banks issued a last-minute demand that the travel company find an extra £200m.
The Civil Aviation Authority is on standby with a repatriation contingency plan called Operation Matterhorn. The potential cost of bringing home passengers is put at about £500m.
In his blog, Simon Jack says the Government does not recognise the choice being presented as between spending £100m on a cash injection to save the company versus a £500m bill to repatriate UK holidaymakers. Government's understanding is that most Thomas Cook customers will be c overed by travel insurance or Atol protection - a Fund paid for through industry levies.
Government's previous refusal to offer assistance to companies like Carillion would make helping Thomas Cook very difficult in principle and in practice.
Furthermore, the matter is being handled by the Department for Transport - which organised the repatriation of customers of the failed airline Monarch - rather than the Department for Business, he adds.
There has been a shift in tone from Thomas Cook on Twitter, with worried customers being told to ignore media speculation on Friday.
Now they are being reminded they do have Atol protection "in the event that Thomas Cook goes into administration".
Travel expert Simon Calder said all Thomas Cook flights in and out of the UK were running normally on Saturday morning, and travel agencies would be opening at the usual times.
He said that while Thomas Cook remains a going concern - albeit in terrible trouble - there was very little anyone who was on a Thomas Cook holiday or has one booked in the coming days or weeks could do.
Anyone trying to cancel holidays could expect to be given short shrift and end up losing some or all of their money, he added.
Currently there are more than 500,000 Thomas Cook customers on holiday, of which 140,000 to 150,000 are British
Thomas Cook, one of the world's largest travel companies, was founded in 1840 to operate temperance day trips, and now has annual sales of £8Bn.
It employs 20,000 staff, 8,000 of those in the UK and serves 18 million customers a year in 15 different countries.
The TSSA union's general secretary Manuel Cortes told the that his members' "main concern was if they had a job on Monday morning".