Hundreds of thousands of Thomas Cook customers are worried about their holidays amid the travel company’s current turmoil.
The business could fall into administration this weekend unless it finds £200m in extra funds needed to secure its future.
It is doing its best to reassure customers, but any collapse could leave thousands of people out of a job and throw the holiday plans of many more in the air.
Is the company going under?
It is in a race against time to find extra money to survive, but sources insist there are still “reasonable prospects” of a deal.
Thomas Cook hoped to seal a rescue led by China’s Fosun this week, but the creditor banks issued a demand that the travel company find an extra £200m.
There are plenty of examples of companies securing a seemingly last-minute deal to continue, and Thomas Cook is stressing that it is still operating, with flights and bookings continuing as usual.
Will I lose my holiday booking if Thomas Cook collapses?
Anyone who has bought a package holiday will be covered by the Air Travel Organiser’s Licence scheme (ATOL).
This means you will not be going away, but the cost of the holiday will be refunded.
The majority of of Thomas Cook holidays are packages.
Does the refund cover everything?
Stating the obvious, everything that was paid for as part of the package – such as flights, accommodation, and excursions – will be refunded.
Some holidaymakers might have paid separately for airport parking, or car hire while away. In this situation, they would need to make a claim from their travel insurer for the cost.
In more extreme cases, such a wedding, there may be a host of other things that could be affected. Specialist cover, such as wedding insurance, may be the only route for those left out of pocket.
Could I switch to another holiday?
Probably not. Thomas Cook customers must carry on as normal at the moment. Cancelling might carry a heavy financial penalty. Were the company to collapse, they would only get a refund, as that is what the ATOL protection states.
Some other operators which use Thomas Cook flights will try to switch their customers to an alternative at no extra cost.
I have only booked a flight with Thomas Cook, what are my rights?
The ATOL protection covers packages, not flight-only deals. So that means that if the company collapsed, you would not get an automatic refund.
Instead, you would need to make a claim on travel insurance. That is why it is always advised to buy travel insurance at the same time as booking a holiday. Some policies have an exclusion for the collapse of an airline, so not everyone will be covered.
A spokesman for the Association of British Insurers says: “As a last resort, travel insurance with scheduled airline failure cover can cover the cost of a flight when the airline has gone into administration. A travel insurance policy with travel disruption cover will cover the cost of new travel arrangements.
“Any customers buying travel insurance now with the current speculation over Thomas Cook should confirm with the insurer what the policy will cover as an insurance policy bought after an event is known or has occurred may not be valid.”
The other alternative is claiming a refund from the provider of the credit or debit card you used, so-called section 75 rules.
There may be a little more protection if the hotel you booked was linked to the flight, such as a click-through when booking the flight.
I’m on holiday now, what do I do?
At the moment, enjoy your break – it is supposed to be relaxing!
If Thomas Cook were to collapse, then the ATOL scheme ensures that anyone on a package holiday will be able to complete their break as planned and be flown home at the end of it, at no extra cost. There is a possibility you may be asked to change hotels.
Thomas Cook has 600,000 customers on holiday from around the world, including up to 160,000 from the UK, so it will be a huge logistical challenge.
When the Monarch airline collapsed, there were arguments for a better repatriation system, but nothing has been implemented as yet.
Those on flight-only deals were also repatriated following the Monarch collapse, by order of the government. That precedent suggests that could happen if required this time, but cannot be guaranteed.
I’ve been given a Thomas Cook gift card. Will it be of use?
At the moment, yes, as the company continues to operate as normal.
If the company goes bust, then it is highly likely that gift cards or vouchers will be worthless, consumer experts say.
It will depend on what happens to the company, whether it is rekindled, and whether any vouchers would then be honoured. If they are useless, then the person who bought it might be able to make a claim to their credit card provider if it was a generous gift of more than £100, or their debit card provider for less.
What about other services, such as sport packages?
Thomas Cook does run domestic ticket and hotel packages for sporting events.
It is unclear what would happen to those bookings if it collapsed, but as most people would not have any insurance cover for such a trip, a refund claim would probably have to be made to the provider of the credit or debit card used to pay.