Ill-timed deals and a failure to successfully pitch itself to a new generation of travelers were among the root causes of its $2.1 billion debt.  

Hundreds of thousands of travelers have been stranded around the globe and the largest peacetime repatriation effort in British history is underway, after Thomas Cook, the world’s oldest travel firm, collapsed on Monday.

Thomas Cook was brought down by $2.1 billion in debt that prevented it from responding to online competitors. With its debt beginning to accumulate 10 years ago due to several ill-timed deals, the company had to sell three million holidays a year just to cover its interest payments.

As it struggled to attract a new generation of tourists, the company was also struck by the 2016 coup attempt in Turkey, one of its top destinations, and the 2018 Europe-wide heatwave which deterred customers from traveling.

Founded in 1841, Thomas Cook ran hotels, resorts and airlines for 19 million travelers a year in 16 countries, generating $12 billion of revenue in 2018 and employing 21,000 people. It currently has 600,000 customers abroad, including more than 150,000 UK citizens.

Travelers stranded

The British government has asked the UK Civil Aviation Authority (CAA) to launch a repatriation program over the next two weeks, from Sept. 23 through Oct. 6, to transport Thomas Cook customers back to the UK.

“Due to the significant scale of the situation, some disruption is inevitable, but the Civil Aviation Authority will endeavor to get people home as close as possible to their planned dates,” a British government spokesperson said.

A fleet of aircraft will be used to repatriate British citizens. In a small number of destinations, alternative commercial flights will be used.

About 50,000 tourists are stranded in Greece, mostly on its islands, a Greek tourism ministry official told Reuters Monday.

The CAA has launched a special website, thomascook.caa.co.uk, where affected customers can find details and information on repatriation flights.

For those thousands of customers not flying from Britain, however, alternative arrangements will have to be made. In Germany, a large market for Thomas Cook, insurance companies will coordinate the response.

Liquidation

Thomas Cook bosses met lenders and creditors in London on Sunday to try to thrash out a last-ditch deal to keep the company afloat. They failed.

The firm said it had entered compulsory liquidation and an order had been granted to appoint an official receiver to liquidate the company. AlixPartners UK LLP, or KPMG, will be appointed as special manager for the different parts of the business.

The impact is already being felt elsewhere in the travel industry, with Australian travel group Webjet Ltd saying it was $30 million in debt and UK online travel group On The Beach stating it would suffer financially from helping its customers in resorts who had flown with Thomas Cook.

Nevertheless, one major rival, TUI, saw its shares surge more than 10% Monday. Industry experts also predict that Europe’s overcrowded airline sector could benefit from the closure of Thomas Cook’s airline business.