What does the collapse of Thomas Cook mean for your holiday and will you get your money back? We explain what customers need to know

  • The world's oldest travel agent Thomas Cook ceased trading at 2am today
  • The Government will fly home more than 160,000 British holidaymakers
  • All holidays and flights are cancelled and customers are told not to travel
  • We explain how to get refunds through Atol scheme, credit cards and insurance

Thomas Cook went bust in the early hours of this morning leaving an estimated 160,000 British holidaymakers stranded abroad.

The Government has launched Britain's biggest peacetime repatriation to bring back holidaymakers on package trips and those who had booked Thomas Cook operated flights. 

All Thomas Cook holidays and flights from today have been cancelled. This means that customers due to travel are unable to, while those who have booked and paid for trips in the months ahead must try to seek compensation or refunds. 

Below we answer your questions on Thomas Cook and explain what the collapse means for those on holiday and people who have booked trips.

An estimated 160,000 British holidaymakers who booked holidays with Thomas Cook are currently stranded abroad, as well as 500,000 people from other countries

An estimated 160,000 British holidaymakers who booked holidays with Thomas Cook are currently stranded abroad, as well as 500,000 people from other countries

What has happened to Thomas Cook? 

The 178-year-old travel agent went into compulsory liquidation at 2am this morning, after the Government refused to bail it out with public money, after a request reported to be for between £150million and £250million.

Thomas Cook needed that cash injection in order to secure £900million of further funding that would see it stay afloat.

Thomas Cook has been placed into compulsory liquidation, rather than administration, meaning the business has stopped trading with immediate effect and will be wound down, with AlixPartners and KPMG appointed to oversee this. Thomas Cook shares were suspended from the stock market. 

The Civil Aviation Authority told customers: 'We are sorry to inform you that all future holidays and flights booked with Thomas Cook are cancelled as of 23 September 2019.' 

What will happen to holidaymakers who are abroad?

The Civil Aviation Authority, the UK regulator which oversees flights and airlines, estimates more than 160,000 British Thomas Cook holidaymakers are stranded abroad.

The Department for Transport is currently sorting out the largest repatriation effort since the Second World War, titled Operation Matterhorn. As part of this, 40 aircraft from airlines including Virgin Atlantic, EasyJet and Tui have been chartered by the Government in order to bring home those left abroad.

The process is estimated to cost £600million and last for a fortnight, until 6 October. After that date customers will have to make their own way home.

Thomas Cook holidaymakers and airline passengers should check and confirm their flight home on the website thomascook.caa.co.uk.

The CAA said: 'The Government and the Civil Aviation Authority are now working together to do everything we can to support passengers due to fly back to the UK with Thomas Cook between 23 September 2019 and 6 October 2019. 

'Depending on your location, this will be either on CAA-operated flights or by using existing flights with other airlines.

'If you are already abroad you will find all the information you need about your arrangements to get home on this website.

The 178-year-old travel agent, Thomas Cook, went into liquidation at 2am this morning and immediately ceased trading

The 178-year-old travel agent, Thomas Cook, went into liquidation at 2am this morning and immediately ceased trading

What about Thomas Cook customers due to travel? 

Those with Thomas Cook holidays or Thomas Cook Airlines flights have been told that their trips are now cancelled.

They have been told not to go to airports and those on package trips will have had their accommodation cancelled too. 

Holidaymakers who were only due to fly with Thomas Cook and booked their own hotels or accommodation separately may be able to find another way to travel. 

The Civil Aviation Authority: 'If you are due to depart from a UK airport with Thomas Cook Airlines, please do not travel to your UK airport as your flight will not be operating and you will not be able to travel.'

Those who have yet to travel out of the UK have had their flights cancelled, with the repatriation programme not including any outbound flights.

This will be the case regardless if they have booked a package holiday with Thomas Cook, or only booked flights. It is only when it comes to getting money back that the distinction matters.

Are Thomas Cook package holiday refunds covered?

Thomas Cook is covered by the Air Travel Organiser's Licence financial protection scheme, which protects package holidays sold by travel businesses based in the UK.

Atol protection means that if the package company you bought your holiday with collapses, then you are covered as the Government will look after you.

The CAA, which runs Atol, says Atol protection will make sure you can finish your holiday and return home if the businesses collapses while you are away.

If it collapses before you travel, then Atol protection will either refund you or find you a replacement holiday. This should keep disruption to a minimum.

You can check if a holiday is Atol protected by looking for the logo, customers could have found this at the bottom of Thomas Cook's website, or on documents.

Because the CAA is currently primarily focused on flying stranded holidaymakers home, you will have to wait until 30 September to make a claim to the CAA for a payout.

AJ Bell's investment director Russ Mould said: 'Anyone who bought a package holiday and hasn't yet started it will be protected by the Atol scheme and will get a refund.

'Anyone who bought a Thomas Cook flight or holiday which is now cancelled should talk to their credit card or debit card provider to seek a refund, or apply to their travel insurance company.'

The UK aviation regulator and the Department for Transport are currently in the process of trying to sort out flights home for everyone stranded

The UK aviation regulator and the Department for Transport are currently in the process of trying to sort out flights home for everyone stranded

Are Thomas Cook flights covered?

If you have paid for flights and received the tickets then you are not covered by Atol. Holidaymakers who have been caught out in this way will need to find another way to try to get their money back.

If you have bought flights that cost £100 or more on a credit card, then under Section 75 of the Consumer Credit Act you can make a claim to your credit card provider for a refund if a flight provider goes under.

Section 75 covers purchases up to £30,000, but that upper limit is unlikely to kick in when buying flights.

Under a chargeback scheme operated by Visa and MasterCard, customers could potentially get money back on a debit card booking.

To try and use this system, you need to contact your bank within 120 days of a breach of contract and ask them to dispute the transaction you've made.

However, chargeback does not cover you if an airline has given you advance notice that your flight has been cancelled.

Will my travel insurance pay out? 

Those with Atol protection on package holidays should not need to use their travel insurance. Holidaymakers who have only booked flights may need to claim on insurance, but are likely to be told to seek credit card refunds first where possible.

But travel insurance may only cover you if your policy has the correct clause.

You should look out for provisions in your insurance covering 'scheduled airline failure' and 'financial failure', though these are not always a standard.

Ryan Howsam, the chairman of travel insurer Staysure, said: 'Customers who haven't yet travelled and don't have an ATOL-protected package holiday, can seek a refund via their credit card company if they used a credit card to pay for their tickets.

'However, those who used an alternative payment method will only find themselves protected if they have taken out a travel insurance policy that covers airline insolvency – and not all do.' 

How is Atol funded?

Atol was first introduced in 1973, as the popularity of overseas holidays grew. It currently protects around 20million holidaymakers and travellers each year.

Thomas Cook boss apologises 

Thomas Cook boss Peter Fankhauser

Thomas Cook boss Peter Fankhauser

In a Thomas Cook statement overnight, chief executive Peter Fankhauser said: 'It is a matter of profound regret to me and the rest of the board that we were not successful. 

I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years.

'Despite huge uncertainty over recent weeks, our teams continued to put customers first, showing why Thomas Cook is one of the best-loved brands in travel.

'Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder's spirit of innovation.

'This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.'

According to its website, the scheme is designed to reassure consumers that their money is safe, and will provide assistance in the event of a travel business failure.

It is funded by contributions from Atol holders, who must pay £2.50 into the scheme that backs up fund, the Air Travel Trust, for each person they book on a holiday.

This money creates a fund that is used by the CAA to ensure consumers either complete their holiday or – if they cannot get away – receive a full refund.

What about gift vouchers?

Unused vouchers are not covered by Atol if Thomas Cook goes bust.

If you have spent a voucher, you receive the same protection as if you've spent cash – if you've used it on a protected holiday booking.

What if I've only paid a deposit?

This covered in the same way as paying in full.

What about Thomas Cook money?

As well as package holidays and flights, Thomas Cook also sold travel money, both in the form of exchanging money and by issuing prepaid cards.

One This is Money reader previously got in touch when stories about Thomas Cook’s financial difficulties hit the headlines in July, because they had money loaded onto a prepaid Lyk Card and were worried about its safety.

Thomas Cook said in such cases your money is safe, as any funds you deposit onto a Lyk Card are held by the card issuer not Thomas Cook, in this case German payments provider Wirecard.

In order to go about getting your money back, it is Wirecard you need to get in touch with, not Thomas Cook.

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