Thomas Cook in £750m bailout talks

Thomas Cook Group looks like it’s about to be sold in its entirety to Chinese Hong Kong based Fosun Group, who already own 18% of the company. The group posted a massive £1.5 billion loss only a month ago.

Thomas Cook shares are currently worthless and any bailout will see existing shareholders effectively wiped out.

Fosun is the only option for the group as Lufthansa and Virgin Atlantic have dithered and delayed trying to get better terms for buying up the airlines and/or aircraft the holiday company owns.

Fosun has made it clear it wants to keep the airlines as assets for now, taking them off the table. Lufthansa had been interested having said it wasn’t, then made a bid. When the business figures for the declining state of Eurowings came in their interest quickly cooled off.

While the initial bailout will involve a share buy, it’s most likely the company will be taken private by Fosun.

It will be good news for thousands of airline employees and staff, though not for 150 head office and 300 retail staff who have already been laid off.

The deal isn’t yet complete but it’s unlikely to have been so openly talked about if it wasn’t going through.

Quite where it will leave the airlines longer term will have to be decided. The days when an airline was essential to sell holiday packages are over and the pressures on airlines inside the European and UK markets are huge. Too much capacity is hurting everyone.

Thomas Cook Group has said in the past it wants to get out of the airline business and just focus on selling holidays. It’s new owners may come to the same conclusion eventually.

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