THOMAS Cook is in the last stages of securing a rescue deal that is set to protect the future of the travel firm.
The outcome of the rescue deal won’t be confirmed until the end of September.
If you’re thinking about booking a holiday with them, or if you already have one booked, here’s everything you need to know:
Why does Thomas Cook need a rescue deal?
In May this year, Thomas Cook issued a profit warning that saw the value of its shares tumble.
The company reported a £1.5 billion loss for the first half of 2019, after a goodwill write-off of £1.1 billion, leaving it with debts of around £1.25 billion.
Thomas Cook boss Peter Fankhauser blamed Brexit uncertainty and last year’s heatwave for the downturn in business.
It’s hoped that the rescue deal would help the company turn its prospects around.
How much does Thomas Cook need and where is the money coming from?
Thomas Cook originally needed £900 million to secure its future – £750 million of this was announced when the company said it would need to restructure and it asked for a further £150 million to see it through the winter season.
The company announced in August that it was planning to sell parts of its business to Chinese firm Fosun, which is already the company’s largest shareholder.
The Chinese firm said it will contribute £450 million of new money to the UK travel firm, and buy 75 per cent of the company’s tour operator business and 25 per cent of its embattled airline business.
The remaining £450 million will come from group lenders and bondholders.
Earlier this month, the travel firm asked for an extra £100 million, according to Sky News, to provide reassurance to its investors.
But this has now gone up to £200 million, which the firm needs to secure within 47 hours.
It means that the total rescue deal will need to be around £1.1 billion.
When are the key dates?
Thomas Cook had originally scheduled a stakeholders’ vote for September 18, where its rescue deal would be voted on.
The company has now pushed back the critical vote to September 27.
Once the vote has been completed, it will need court approval, which will take place on September 30.
Critically, Thomas Cook’s Atol license is up for renewal on October 1.
By law, every UK travel company that sells package holidays with flights is required to hold an ATOL, which stands for Air Travel Organiser’s Licence.
It’s issued by the UK Civil Aviation Authority (CAA), and offers protection for consumers when things go wrong.
Without an ATOL, Thomas Cook will not be able to sell package holidays with flights.
Alan Bowen, Legal advisor to the Association of Atol Companies, told Travel Weekly the CAA could extend Thomas Cook’s Atol licence by up to 14 days.
How do I know if my holiday is ATOL protected?
WHEN you book a holiday, the ATOL holder or their agent must give you a certificate confirming you are ATOL protected as soon as you hand over any money – including a deposit – for a holiday or flight.
Make sure you obtain and keep all the relevant paperwork in case you need to make a claim.
But be aware, the protection only covers British-based firms, so it’s vital to check. When Lowcostholidays went bust in 2016, customers weren’t protected by ATOL because the company had moved to Spain in 2013.
Some travel companies display the ATOL logo on their websites even though they don’t offer financial protection.
To check it’s genuine, look for a number on the logo and check it out on the CAA’s website.
You should be wary if the travel provider has no ATOL number, or if the number doesn’t have four or five digits.
If you aren’t sure about the website, don’t book through it.
Another key term Brits should be aware of is ABTA. While ATOL protects flight-based packages, ABTA protects everything else such as cruise or self-drive trips.
Are my holidays protected?
Thomas Cook is still encouraging customers to book their holidays as normal as the company’s package deals are protected under ATOL.
It means that if Thomas Cook (or any ATOL-protected travel company) goes bust, you won’t be left out of pocket or be left stranded abroad.
If you’re already on holiday when that happens, you will be able to finish your holiday as normal.
And if it happens before you leave, you will receive a full refund.
Thomas Cook also sells flights-only tickets, and these may not be protected under ATOL.
If you buy the flights using a credit card, and it’s over £100, you should be able to claim it back under Section 75 of the Consumer Credit Act.
It’s also worth having travel insurance, and checking the fine print to make sure you’re completely covered.
You can find more general advice about what happens when a travel company goes bust here.
The CAA is reportedly already making contingency plans in the event that the Thomas Cook deal doesn’t go through and it needs to repatriate Brits.
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A CAA spokesperson said in a statement: “We are in regular contact with all large ATOL holders and constantly monitor company performance.
“We do not comment on the financial situation of the individual businesses we regulate.”
Thomas Cook has declined to offer additional comment.