{"id":155971,"date":"2019-09-23T10:18:02","date_gmt":"2019-09-23T14:18:02","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=155971"},"modified":"2019-09-23T09:07:56","modified_gmt":"2019-09-23T13:07:56","slug":"150000-brits-stranded-as-thomas-cook-collapses","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/09\/150000-brits-stranded-as-thomas-cook-collapses\/","title":{"rendered":"150,000 Brits Stranded As Thomas Cook Collapses"},"content":{"rendered":"
September 23, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Last-Minute Negotiations Fail<\/strong><\/h2>\n

The seemingly never-ending Brexit saga has taken a strange turn this week!<\/p>\n

World-famous travel company Thomas Cook has plunged into insolvency, creating travel chaos.<\/strong>\u00a0The firm has been battling financial difficulties in recent months, exacerbated by the Brexit uncertainty.<\/p>\n

Despite last-minute negotiations, which many hoped would save the company, Thomas Cook has now \u201cceased trading with immediate effect\u201d according to the UK Civil Aviation Authority (CAA).<\/p>\n

Rescue Mission Underway<\/strong><\/h2>\n

The collapse of the firm has had an immediate and severe impact on many UK holidaymakers.<\/p>\n

According to figures from the firm,\u00a0150,000 UK citizens are now stranded abroad.\u00a0<\/strong>Many are unable to secure return flights.<\/p>

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Given the severity of the situation, the UK government is now having to make plans to retrieve stranded citizens.\u00a0It is currently preparing for the biggest peacetime rescue mission in UK history.<\/strong><\/p>\n

The UK government has chartered 45 airplanes to aid the standard former Thomas Cook users. It will run 64 flights on Monday with 16,000 people due to return.<\/p>\n

The operation, dubbed \u201cOperation Matterhorn\u201d will make the fleet of aircraft running on Monday the country\u2019s fifth-largest airline for the day<\/strong>.<\/p>\n

Government Bailout Rejected<\/strong><\/h2>\n

Thomas Cook approached the government for a bailout as the impending collapse became clear.\u00a0<\/strong><\/p>\n

The company requested \u00a3250 million in government aid to keep them afloat.<\/strong><\/p>\n

However, the\u00a0request was turned down<\/strong>\u00a0with UK transport secretary Grant Sharps explaining:<\/p>\n

\u201cI fear it would have kept them afloat for a very short period of time and then we would have been back in the position of needing to repatriate people in any case.\u201d<\/p><\/blockquote>\n

However,\u00a0shadow chancellor John McDonell opposed the decision.<\/strong>\u00a0McDonnell stated\u00a0that the government should have helped<\/strong>\u00a0Thomas Cook \u201cif only to stabilize the situation while a real plan for the future of the company could be addressed\u201d.<\/p>\n

What Happened to Thomas Cook?<\/strong><\/h2>\n

The holiday agent had secured a \u00a3900 million rescue package from a Chinese shareholder firm in August.<\/p>\n

However, a further demand from its banks to secure an extra \u00a3200 million threw the deal into uncertainty.<\/strong><\/p>\n

Consequently, Thomas Cook\u2019s management spent the majority of Sunday attempting to negotiate a deal with other lenders. Ultimately, it was unable to secure a package.<\/p>\n

The company has cited a range of issues. These include the political turmoil in holiday destinations like Turkey, the UK heatwave last year which disrupted holiday bookings and the\u00a0increasing\u00a0<\/strong>Brexit\u00a0<\/strong>risks.<\/strong><\/p>\n

What is the Latest with Brexit?<\/strong><\/h2>\n

The\u00a0UK is currently scheduled to leave the EU on October 31st<\/sup>.<\/strong><\/p>\n

However, in accordance with the recent passing of new legislation,\u00a0if MPs cannot approve a deal<\/a>\u00a0by the 19th<\/sup>\u00a0October,<\/strong>\u00a0the PM is required to seek an extension to Article 50. This would delay the departure date, keeping the UK in the EU for longer.<\/p>\n

BOE Still Blocked by Brexit<\/strong><\/h2>\n

The Bank of England has once again noted the uncertainty from Brexit as\u00a0the main obstacle to any rate increase.<\/a><\/strong><\/p>\n

At the latest monetary policy meeting this month, BOE Governor Carney revealed the bank has revised its growth forecasts lower. This, of course, is due to the ongoing impact of Brexit uncertainty.<\/p>\n

However, he did note that if the government could secure a Brexit deal, a rate increase would likely be appropriate.<\/p>\n

Impact on GBP<\/strong><\/h2>\n

GBP has been seen lower in the wake of the news. While not directly impacting the exchange rate, the collapse of such an established name in UK business has added to the fragile environment ahead of the UK Brexit date. As businesses and consumers continue to struggle with the uncertainty around Brexit, UK asset prices have been knocked lower with the UK100 breaking below support levels.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Last-Minute Negotiations Fail The seemingly never-ending Brexit saga has taken a strange turn this week! World-famous travel company Thomas Cook has plunged into insolvency, creating travel chaos.\u00a0The firm has been battling financial difficulties in recent months, exacerbated by the Brexit uncertainty. Despite last-minute negotiations, which many hoped would save the company, Thomas Cook […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-155971","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/155971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=155971"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/155971\/revisions"}],"predecessor-version":[{"id":155978,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/155971\/revisions\/155978"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=155971"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=155971"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=155971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}