[PhilWright]

Why do these travel companies always go bust in a way that leaves people stranded?

Surely the management must have known a week or two ago that the company was about to go under. In that case, stop anyone flying out but still bring people back. By the time they actually cease trading there should be few people left abroad. Some managers in Thomas Cook must have known that people flying out were going to end up stranded and they just let them go.

[rlucas]

The moment they stop accepting reservations for new travel outbound is the moment they are commercially dead.

Agreed, if you knew there was 0% hope (say, of flying anyone back a week hence) it would be unethical to keep it going. But if you were trying to keep things afloat and thought you could do, it would be unethical to do otherwise, since stopping new outbounds would 100% doom the firm and strand the overseas travelers.

[Scoundreller]

I guess the question is: how often have airlines/tour companies been at the brink like this and pulled through?

If the answer is “close to zero”, we need to rethink this privilege.

[greglindahl]

I'm sure you read the article, which mentions that there were negotiations up to the last minute to raise the last 200mm pounds on top of the 900mm pounds existing rescue package.

[human20190310]

In general I think companies have a duty to their shareholders to fight to stay in business until it's literally impossible to do so. As long as there are resources left, those would have to be allocated to preserving the business, rather than to smoothing the process for their customers.

[visarga]

In that case the shareholders should be held responsible for leaving people stranded.

[em500]

The whole point of a limited liability company is to shield shareholders from responsibility.

https://en.wikipedia.org/wiki/Limited_liability#Justificatio...

[visarga]

That's a catch 22. The company has a duty to its shareholders first, and shareholders are protected from responsibility.

[PhilWright]

Exactly, they should have stopped flying people out when they were within two weeks of closing. If they had secured the funding needed to continue then all well and good and then start flying people out again.

[irjustin]

I think there's a catch 22 here.

The instant the airline says "We're no longer accepting bookings because we're working to figure out a cash situation." you've got to believe everyone else who is still booked will pull their ticket for a refund of any form. I would be.

There would be a massive outflow of what little available cash exists.

The announcement whether early or late is the immediate death knell of the company.

I do agree at face value this seems terrible, but I honestly don't see a better course of action given they were waiting for a bailout and then didn't receive it.

[michaelt]

One could imagine a travel company that operated like a financial services firm - if you pay $3000 for a package holiday they put your money in a ringfenced client money account and contract with an airline and hotel to provide the services with payment in arrears.

That way if the travel company or airline or hotel goes out of business, the holidaymaker hasn't lost any money (although they might face the cost of buying a last-minute flight from a different airline, or similar)

Of course, you could argue consumers who want such peace of mind can already approximate such an arrangement by combining a package holiday with travel insurance.

[greglindahl]

Welcome to Hacker News! Lots of startups have gotten to within two weeks of closing, and then didn't close.

[Scoundreller]

And plenty have insta-shutdown and said “ooops, sorry about all your data. We regret not telling you sooner (not that we would have). Here’s the address of our $350/hr insolvency firm (which will be deducted from any compensation). Good luck!”

[whenchamenia]

If you are lucky you can find out who bought your data to recover and/or destroy for a hefty tag, and wonder if it was copied and sold adittionally...

[buboard]

This didn't come out of the blue. Thomas Cook is known to have problems for years and an impending collapse has been rumoured since months ago. Why did all these traveleres choose them is a better question

[bshimmin]

Because people often book holidays six months or more in advance, and Thomas Cook's financial woes weren't especially big news back then.

[differentView]

Because vast majority of people aren't aware of the financial health of the companies they purchase from.

[buboard]

it was in the news though, for more than a year

[stordoff]

Completely playing devil's advocate - continuing to operate whilst knowing there is a high risk of them going bust gives the CAA more time to put in contingency plans, rather than going bust _now_.

[Scoundreller]

And the CAA got a lot of experience with this with Monarch.

But I doubt they’re happy about that experience.

[choeger]

The moment they stop flying out, they collapse. In that case they leave people behind and sink the company actively. Not a situation any manager wants to end up in.