Thomas Cook restructuring led by AlixPartners and KPMG

25 September 2019 3 min. read

On Monday the long expected bankruptcy of British airline Thomas Cook finally came into force. 178 years after being founded, one of Europe’s largest airlines and tour operators has succumbed to the threats of digital disruption, changing consumer behaviour and the all mighty internet. Consultants from KPMG and AlixPartners have been brought on board to extract as much value as possible from the company.

On 23 September 2019, the news broke that Thomas Cook, the parent of among others travel brands Thomas Cook (UK), Condor (Germany), Tjäreborg (Nordics) and Neckermann (Netherlands), had collapsed into compulsory liquidation. As a result, the firm’s airline was grounded, leaving some 600,000 travellers stranded on foreign shores. For the UK, it is the latest in a succession of large tour operators to go bust. Two years ago, UK airline Monarch collapsed, causing similar problems.

While the news took many consumers by surprise, business experts however will not have been shocked by this development. Dark clouds had long been gathering over Thomas Cook, following a string of operating losses. Parts of the business were put up for sale, and in April this year a £900 million deal was closed with the Chinese investor Fosun as part of restructuring plan. Despite this life-line, in the past weeks it emerged that Thomas Cook needed an additional £200 million to keep its head above water, and while the company came close to securing this, it ultimately failed.Thomas Cook restructuring led by AlixPartners and KPMGChief Executive Officer Peter Fankhauser admitted the firm’s downfall on Monday, stating, “It is a matter of profound regret to me and the rest of the board that we were not successful. I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years.”

Travellers from all over the globe have been burdened by the bankruptcy, seeing either their future holiday plans fall apart before their eyes, or seeing them stuck in their holiday locations. At the same time, employees of the firm have been hit hard by the news, with a global total of 22,000 jobs in line to be axed, including 9,000 in home base the United Kingdom.

To save what is left of the company, the group’s shareholders have brought two well-known restructuring consulting firms in to lead the insolvency process. Consultants from KPMG and AlixPartners have been appointed to oversee the liquidation process. They will try to stabilise operations where possible, and in the background analyse the asset base of Thomas Cook before drafting an action plan on how they can best save the assets of the group. Options that will be considered include the sale of assets, breaking the firm up for sale, and splitting the company into good and bad parts, as was done with banks during the financial crisis era.

From KPMG, Blair Nimmo, Head of Insolvency at KPMG in the UK, and Jim Tucker and David Pike, both Partners, will be working on the major restructuring case. Meanwhile, Ben Browne, a Director, and Managing Directors Simon Appell, Alastair Beveridge and Dan Imison from AlixPartners will manage the business and property of Thomas Cook.