<p class=”intro”>One of the oldest and largest tour companies on the planet abruptly goes belly-up, leaving the UK facing the largest peacetime repatriation in its history. If this happened to you, would you be protected?</p>
At some time earlier today, an army of travelers around the world, vacationing with the British tour company Thomas Cook, found out their vacations were over.
In many cases, before they’d even begun. In others, after they had arrived in-country. In others still, while they were airborne.
Reason: The company had gone bankrupt.
Those who went to the Thomas Cook Web site — undoubtedly in a panic — were met with this:
“Thomas Cook UK Plc and associated UK entities have entered Compulsory Liquidation and are now under the control of the Official Receiver.
The UK business has ceased trading with immediate effect and all future flights and holidays are cancelled.
A dedicated support service is being provided by The Civil Aviation Authority to assist customers currently overseas and those in the UK with future bookings.
for further information.”
This isn’t the first time something like this has happened to an airline or a tour company, as IBIT readers already know. But for it to happen to one the likes of Thomas Cook is a major WTF.
The British government now faces the prospect of having to get 150,000 stranded travelers back to the UK. The last time London had to move this many people in this big a hurry, it was off a French beach called Dunkirk, and they had Nazis shooting at them.
If Boris Johnson thought Brexit was a headache…
Don’t think this could ever happen to you? Thomas Cook’s stranded travelers probably never thought it could happen to them, either — but it did. And somewhere down the line, this year or next, it will happen to someone else.
Perhaps not in such huge numbers nor in such spectacular fashion. And probably not to a company as large, old and well established as Thomas Cook. But it will happen.
Which is why we’re going to have this conversation again about travel insurance. A very particular type of travel insurance that goes beyond standard trip cancellation or trip interruption coverage.
Back in March, when Iceland’s low-budget WOW airline went down in financial flames, this is what IBIT said about that:
“It’s known as SAFI, short for Scheduled Airline Failure Insurance. It reimburses you for money lost when the airline you booked on goes down the financial drain before or during your trip. You can purchase it separately or as part of a standard travel insurance policy if the insurer offers it.
Is buying a SAFI policy on top of traditional travel insurance a good idea? It partly depends on who you’re flying with, and where.You’re more likely to see abrupt financial collapse among smaller regional and low-cost carriers — and the smaller they are, the greater the possibility.
Further, this situation is more likely to crop up among airlines in developing countries, especially in Africa, where airlines come and go like fashion trends and one-hit wonders.”
Obviously, that didn’t take the likes of Thomas Cook into account.
This isn’t some fly-by-night travel outfit in some developing country somewhere. It was founded in Britain in 1841, making it perhaps the first tour company on Earth, and one of the few anywhere to grow large enough to eventually operate its own airline.
Which makes its sudden collapse all the more stunning. But perhaps it should not have been.
Mainstream news media reports that the British government had known for some time that Thomas Cook was in dire financial trouble, and made no move to help. [SOURCE: NY Times]
Are we now in an era when, on top of everything else you have to worry about, travelers need to check the financial bonafides of a tour company before booking with them — especially when booking with an outfit that — on the surface, at least — appears “too big to fail?”
Some of you financially astute and Web-savvy folks out there may have no trouble whatsoever doing that. For the rest of us, there’s travel insurance.
For more information on how to protect yourself and your travel dollars against calamities like this, send me an email at firstname.lastname@example.org. Subject: SAFI.
<p class=”attrib”>Greg Gross is the senior editor of I’m Black & I Travel, and the owner of Trips by Greg travel agency</p>