Thomas Cook has been forced to fend off a wave of worried inquiries from holidaymakers and suppliers, promising it has “ample cash to operate” after a crash in its share price on Friday.
In numerous responses to customers on Facebook and Twitter expressing concern that trips might be cancelled, the holiday operator said it was “business as usual” and that all of its holidays were protected by Atol, the UK holiday protection scheme.
Hi, please try not to worry, the recent media speculation has no impact on our operations, it's business as usual and you'll still be going away. To give you extra peace of mind, if you have a package holiday, it is fully ATOL protected, so your money and holiday are safe. ^Jamie
— Thomas Cook Cares (@ThomasCookCares) May 19, 2019
Shares in Thomas Cook plunged by 40% to below 12p on Friday, their biggest drop since the firm nearly collapsed in 2011, after a high-profile City analyst said the company’s shares were worthless.
Wall Street bank Citigroup advised investors to sell shares in the tour operator after it reported a £1.5bn loss last week, citing a drop in UK holiday bookings due to Brexit uncertainty and a growing environmental movement against air travel in northern Europe.
Over the weekend, it emerged that the group’s Nordic payment card processor wanted to extend the period it held on to customers’ cash to several weeks, from just a few days, amid concerns over financial pressures on Thomas Cook.
A spokesperson for Thomas Cook said: “In the last few days we have had a number of discussions with our suppliers to explain the ample resources we have to continue to do business as well as our strengthening liquidity position.
“We remain in discussions with our Nordic card supplier and we are confident that we will reach an acceptable solution in the coming days.”
On social media, Thomas Cook told holidaymakers that it had taken “sensible steps” to secure additional funds from its banks as it attempted to calm concerns which could lead to a further slowdown in bookings that would worsen the company’s financial position.
If calm is restored, it is unlikely Thomas Cook will need the £300m of additional lending announced last week until the winter as funds flow into the business over the summer when most holidaymakers pay for their trips.
The company is in the process of selling off its airline business, which includes German airline Condor, as part of plans to raise cash to reduce debt. Lufthansa and Virgin Atlantic are thought to be interested in parts of the business but it is thought it could take time to secure an appropriate deal.
“We have taken a number of proactive steps in recent months to strengthen our financial position. We have the support of our lending banks and major shareholders, and just this week we agreed additional funding for our coming winter cash low period. We have ample resources to operate our business and at the same time, as usual, our liquidity position continues to strengthen into the summer period,” the spokesperson said.
“As an Atol-protected business, all of our holidays are protected under the package travel directive, so our customers can have complete confidence in booking their holiday with us.”
