Travel giant, Thomas Cook has announced a profit warning this week after reporting a £1.5 billion-pound half year loss. The UKs oldest travel company, founded in 1841, has no doubt that Brexit is partially to blame for the shortage of holiday bookings this year.
Despite the EU exit date being pushed back to October 31st 2019, Thomas Cook has not seen any increase in holiday bookings. The rise of online travel companies is also thought to have contributed to the drop.
Thomas Cook will now investigate money-saving avenues, including store closures and reducing staff numbers. The company has also received several bids for its airline since first announcing a loss in profits back in February.
Holidaymakers concerned about the safety of their summer break should rest assured that as Thomas Cook is ATOL protected, as is the case with all UK package holiday companies, they will not be left stranded or out of pocket. The Air Travel Organisation’s Licence (ATOL) protects customers should their package holiday company or airline go bust.
We have seen a string of airlines file for bankruptcy over the past few years with Monarch Airlines, Flybmi and Air Berlin being three of the biggest names.
Thomas Cook’s main competitor is online booking companies, and holidaymakers should be aware that whilst they may be able to book their holiday for a lower price, these companies are generally not ATOL protected. Unlike Thomas Cook’s customers, if these online companies were to go bust, there is a strong possibility they would be left out of pocket.
Travel insurance policies do not always cover for losses incurred due to companies going bust, so if holidaymakers are booking through a provider that is not ATOL protected they should ensure their travel insurance offers cover for ‘End Supplier Failure and Scheduled Airline Failure’. Generally, this will require an additional premium as only a few travel insurers will offer this additional level of cover as standard.
It is worth noting, travel insurers will only cover costs that cannot be reclaimed elsewhere i.e. through a credit card or bank.
With ongoing uncertainty surrounding the future of Thomas Cook, and Brexit causing issues across the travel industry, holidaymakers should make sure they are taking out the right travel insurance cover that meets their needs at the time of booking.