Tour operator insolvency

Thomas Cook Germany heads for break-up with 1,000 job losses

Thomas Cook Germany's head office is located in Oberursel, near Frankfurt.
Thomas Cook
Thomas Cook Germany's head office is located in Oberursel, near Frankfurt.

Thomas Cook Germany could close down on December 1 with about 1,000 job losses after failing to find a buyer, but some of its tour operator and hotel businesses might be sold off separately, saving about 1,000 other jobs.

Thomas Cook Touristik GmbH, the holding company for Thomas Cook's activities in Germany, will probably officially stop trading on December 1, according to a statement from its insolvency administrators. Despite intensive talks, no investor has been found for the company as a whole, with some 2,100 employees, or for its overall tour operator business. As a result, the company, based in Oberursel, near Frankfurt, is now preparing to close down operations as of December 1, 2019.

Fabio Algari, the company’s provisional insolvency administrator, said: "Six weeks ago we started a very ambitious process with the aim of finding an investor for the entire German Thomas Cook group. But despite tireless negotiations time is now against us, so that at the present time there is no actual offer for the tour operator business of Thomas Cook Touristik GmbH."

Stefanie Berk, the company's managing director, added that "all options" had been discussed in numerous discussions that had "really given hope for a future". She emphasised: "Thomas Cook Germany is a profitable tour operator and has been blamelessly dragged down by the insolvency of its British parent company. I thank all our employees and partners deeply for their devotion and loyalty."

New owners for Bucher, Öger, Sentido and Smartline?

There is some good news, however, for two tour operator subsidiaries: Öger Tours, based in Hamburg; and Bucher Reisen, based in Meerbusch, near Düsseldorf. "There is strong demand among investors for Bucher Reisen and Öger Tours. Negotiations to keep them going are very well-advanced," said Julia Kappel-Gnirs, provisional insolvency administrator for the two companies. "Further interested parties are coming every day, so we expect to find a solution for the locations of Hamburg and Meerbusch."

The situation is similar for some of the hotel brands and travel agency activities. "Nothing has been signed yet but we are very optimistic that the hotel franchise systems Sentido and Smartline, including their employees, will soon have new owners," Kappel-Gnirs added.

Final negotiations are also taking place for Thomas Cook's own travel agency chain and its travel agency franchise system. "We expect there will be solutions to keep the overwhelming majority of the offices in business," she said. The insolvency administrators are also hopeful of finding buyers for the e-commerce platform 'Golden Gate' as well as the Neckermann and Air Marin tour operator brand names.

The jobs of about half of the workforce of 2,100 people would be saved if all these business units are sold off successfully, according to the insolvency administrators.

Customers could get compensation in December

Meanwhile, Thomas Cook Germany's insurance company Zurich Versicherung expects to start paying out compensation in December to customers affected by the company's insolvency in late September. But it is unclear how much they will get back as the overall size of the damages is not yet known, according to a spokesman.  

However, the company's insurance protection sum of €110 million will definitely be nowhere near enough to cover all the claims of the 660,000 customers with open bookings at the time of the insolvency. As of November 1, a total of 150,000 claims totalling €250 million had already been made, the Zurich Versicherung spokesman disclosed.

The Bild-Zeitung newspaper has reported that claims could reach €500 million, leaving up to €400 million unpaid once the insurance cover sum had been used up.