Thomas Cook bankruptcy lead to high flight fare?

The collapse of 178-year-old Britain's travel company Thomas Cook collapsed on Sunday night, Thomas Cook (India) Group has not been impacted.

The clock is ticking on the future of 22,000 staff, including 9,000 in UK  and 550 shops that would be left empty if it folds and roughly 600,000 travelers are stranded around the world after British travel provider Thomas Cook declared bankruptcy.

Thomas Cook tried to reinvent itself after the 2011 crisis: it hired turnaround specialist Harriet Green as chief executive the next year, but seems the idea got flop.Germany is considering issuing financial aid to the Condor airline after Thomas Cook declared bankruptcy. Thomas Cook, which has a 49% share in the airline. Condor has applied for a bridging loan from the federal government and is awaiting a response, with German media reporting the amount requested was €200m .

German Economy Minister Peter Altmaier said that the government would make a decision on financial aid within the coming days. The government in the state of Hesse has already promised its support, a statement from the airline said.

In Box: Thomas Cook has failed because it had massive debts and it was making a loss. It's a fragile industry. More than a dozen airlines have gone bust.

Thomas Cook (India) Group is an entirely different entity since August 2012 when it was acquired by Fairfax Financial Holdings (Fairfax), a Canada based multinational investment company. Sources said."The last seven years have been fruitful as we continue to grow and build our legacy as an independent entity after Fairfax Financial Holdings acquired a 77 per cent stake in Thomas Cook India Ltd. (TCIL) in 2012," Thomas Cook India said in a statement.

The Thomas Cook India Group’s cash and bank deposits balances stand at Rs 1,389 crore as of June 30, 2019. "On a standalone basis, Thomas Cook India is debt free upon pre-payment of Rs 67 crore debenture obligations ahead of schedule. This has been made possible using stable and strong cash flows that the Thomas Cook India Group is generating year over year. The Group generates an average annual free cash flow of around Rs. 250 crore," TCIL said.

Meanwhile, the British entity said that "An application was made to the High Court for a compulsory liquidation of the Company before the opening of business today and an order has been granted to appoint the Official Receiver as the liquidator of the Company."

For the Indian entity, it is business as usual. Thomas Cook India observed a 21 per cent growth in demand for the Durga Puja festive break, from travellers in West Bengal and surrounding source markets. Domestic tourism is witnessing a strong resurgence, with an over 20 per cent  growth in demand across Andamans, Kerala, and Himachal Pradesh, amongst others.

In Box: Thomas Cook traded for 178 years. During that time there have been 6 monarchs and 33 Prime Ministers. It survived two world wars, Great Depression, 2008 crash... Brexit destroyed it. A movement seeking to restore British heritage is killing our oldest businesses and institutions.

An industry expert said, "Thomas Cook Group was a big player in the leisure segment. With the collapse of the oldest travel company, it will impact the travel in the short term but in the hindsight, it gives room for other players to expand their horizons.”