Reply to: Another Bexit casualty

[shaunbhoy]

So you don't think TC owed hotels etc monies, to be paid in non-sterling?

Quite likely. But it is money they would still have had if they were not pouring so much of it away hanging onto anachronistic business models requiring the upkeep of prodigiously unprofitable real estate.

HTH BIDI

[Whorty]

Jeezus wept, where did we dredge up THIS banjo-playing goatherd?? Must be one of sas's.

So you don't think TC owed hotels etc monies, to be paid in non-sterling? Good for you

[Whorty]

Purely because the markets dislike uncertainty.

Once there is a clear future the pound will stabilise n go back up some.

[shaunbhoy]

And to who they have those debts!? Foreigner hotels, companies, not in £ maybe!?

Jeezus wept, where did we dredge up THIS banjo-playing goatherd?? Must be one of sas's.

[CryingSheep]

I worked for Thomas Cook's main rival years ago so know the sector fairly well. It's often a quite low profit margin sector that faces a lot of external risks like freak weather, terrorism, currency and oil price fluctuations and so on. Most profit is made from selling ancillaries like insurance, currency, car hire and excursions. The basic holiday element barely breaks even and of course, most profit is made over the summer period so cash flow is a major issue during the autumn and winter where TC really came unstuck. No one wanted to give them the cash to keep going in the leaner months to come.

TC was a big company though - it had sales of over £9bn p.a. which indicated a lot of people used it.

TC's decline had been long term, they were far too slow to transition towards a more online business model and amazingly still had 550 travel agent stores. This was a legacy of an ill fated deal to acquire the Co-Op travel agent business in the early 2010s, just as everyone else was starting to move further online. A high proportion of their holidays were fairly bog standard which were not competitive enough against packages that people could just put together themselves using various platforms for flights, hotels, car hire etc.

I don't think Brexit caused them to go under, that was just another external risk like the ones I mentioned above. They had lots of debt and had almost collapsed in 2013.

And to who they have those debts!? Foreigner hotels, companies, not in £ maybe!?

[edison]

I worked for Thomas Cook's main rival years ago so know the sector fairly well. It's often a quite low profit margin sector that faces a lot of external risks like freak weather, terrorism, currency and oil price fluctuations and so on. Most profit is made from selling ancillaries like insurance, currency, car hire and excursions. The basic holiday element barely breaks even and of course, most profit is made over the summer period so cash flow is a major issue during the autumn and winter where TC really came unstuck. No one wanted to give them the cash to keep going in the leaner months to come.

TC was a big company though - it had sales of over £9bn p.a. which indicated a lot of people used it.

TC's decline had been long term, they were far too slow to transition towards a more online business model and amazingly still had 550 travel agent stores. This was a legacy of an ill fated deal to acquire the Co-Op travel agent business in the early 2010s, just as everyone else was starting to move further online. A high proportion of their holidays were fairly bog standard which were not competitive enough against packages that people could just put together themselves using various platforms for flights, hotels, car hire etc.

I don't think Brexit caused them to go under, that was just another external risk like the ones I mentioned above. They had lots of debt and had almost collapsed in 2013.

[scooterscot]

Purely because the markets dislike uncertainty.

Once there is a clear future the pound will stabilise n go back up some.

Okay you're talking about 2050. There's merit in forward planing.

[sasguru]

Once there is a clear future the pound will stabilise n go back up some.

If there is a no-deal Brexit, I expect a Sterling crisis.

[original PM]

Why? Businesses have already relocated. Why take the risk to invest in the UK when a sitting Tory government can burn it down in a year?

Purely because the markets dislike uncertainty.

Once there is a clear future the pound will stabilise n go back up some.

[darmstadt]

Thomas Cook's German airline, Condor, continues to operate and it is asking Berlin for a €200m bailout. If it gets it, that would mean the Spanish, Turkish and German governments would have been willing to support Thomas Cook, but not the UK government.

**** business...

[scooterscot]

The collapse in the pound is caused by the uncertainty of brexit which has not been helped by our own politicians.

Once the deal is done the pound will strengthen?

Why? Businesses have already relocated. Why take the risk to invest in the UK when a sitting Tory government can burn it down in a year?

[Mordac]

RBS should never have been bailed out on principal. Of course it is always the bankers(cockney rhyming slang) who want companies to go to the wall. Until they need money themselves.

We are not all in it together.

That's a different argument, and I didn't suggest they should have been, just that they were.

PS Principle.

[BrilloPad]

The reason RBS needed bailing out was that they made some very poor decisions in the past. Bailing out TC would have been a poor decision now. So it looks as if they've actually learned something. Surely that's a good thing (in the long run)?

RBS should never have been bailed out on principal. Of course it is always the bankers(cockney rhyming slang) who want companies to go to the wall. Until they need money themselves.

We are not all in it together.

[Mordac]

Didn't manage to spot themselves when they were in deep do do.... So, the bank that was bailed out by the taxpayer refuses to bail out a company to help those taxpayers....

The reason RBS needed bailing out was that they made some very poor decisions in the past. Bailing out TC would have been a poor decision now. So it looks as if they've actually learned something. Surely that's a good thing (in the long run)?

[BrilloPad]

They were going to the wall sooner or later. Brexit uncertainty hastened that.

UK should have left in March.