Picture: REUTERS / SUZANNE PLUNKETT
Picture: REUTERS / SUZANNE PLUNKETT

Berlin — Thomas Cook’s German tour business filed for insolvency on Wednesday in a move aimed at separating its brands and operations from its failed parent, and said it was in talks with potential new investors.

The German government said it was considering an application for a bridging loan from Thomas Cook Germany, a day after it said it would guarantee a €380m bridging loan for the British group’s German airline, Condor.

Thomas Cook, the world’s oldest travel firm, collapsed earlier this week, sparking the largest peacetime repatriation effort in British history and a scramble for survival among many of its subsidiaries.

The German regional state of Hesse, which is also providing help to Condor, said on Wednesday that it would examine a request for financial assistance from Thomas Cook Germany, and would discuss the matter with the federal government. Hesse’s prime minister Volker Bouffier said support would only be possible if it was certain that the company had good prospects.

Torsten Kirstges, professor of tourism business at the Jade University of Applied Sciences, said it is unlikely the government will bail the company out as it is not as critical to the travel sector as Condor.

Condor and Thomas Cook Germany, the second-biggest tour operator in Germany after TUI, are both independent units of the insolvent British parent company. Condor is also expected to undertake insolvency proceedings under self-administration to avoid being entangled in the winding up of the parent company’s financial affairs.

Condor looking for new owners

Christoph Debus, head of Thomas Cook Airlines, which includes Condor, said the German airline is selling tickets as normal and is hopeful it can compensate for the 20% of its business that comes from Thomas Cook holidays.

Condor is also looking for new investors, he said: “There are very concrete offers and partners we are speaking to and we are confident that we will find a good new ownership structure.”

Thomas Cook’s Nordic arm, meantime, has said it is looking for new owners, while Polish unit Neckermann Polska said on Wednesday that it was insolvent. Its Dutch unit was granted protection from creditors on Wednesday.

Thomas Cook Germany said it has filed for insolvency in an attempt to restructure the business in an orderly fashion and continue profitable operations. It added that a German court could appoint a liquidator as soon as Wednesday.

“Intensive talks over the past two days with strategic and private equity investors ... have shown us that the German branches of former Thomas Cook, with its brands Neckermann Reisen, Öger Tours and Bucher Reisen have the chance to have a future,” the unit said in a statement.

The business, which serves about 3-million customers a year, said it has been weighed down by the weakness of its British parent and the impact of Brexit on the German business.

But Stefanie Berk, the unit’s head, said she is optimistic the business will survive. “We owe this to our long-standing customers, committed employees and other partners who have supported us so much over the years and in the past difficult weeks.” 

The company said it is in contact with the German foreign ministry, insurers and other partners to get customers home. Zurich Insurance, which provided insolvency cover to Thomas Cook Germany, will cover the costs for those on holiday.

About 97,000 holiday makers are still stranded.

Trade union Verdi called for efforts to save the German business and its 2,000 employees, noting that thousands of travel agencies in the country depended on its survival.

Thomas Cook Austria, which belongs to the German unit, also filed for insolvency on Wednesday, with the aim of staying in business.

Reuters