TUI and cancelling TC

[Web Owls]

If Fosun do want to takeover TC, it's advisors Citigroup,yes the same ones as TC have helped lower the price.
Not saying anything untoward is happening but what will be will be.

I am in a lucky situation because we fly out on 27th July, however we can also go 2 days before even if it means flying Thursday nigh to get a connection the day after.

People have every right to be worried because it's a massive expense but if we learn one thing it is try and use a CC every time you make any purchase over £100. Even if you have the money, use it then payoff the cost.

We used advice off of here a few years ago. Which was get the Clarity card and open a Halifax savings account and then put money in the account when you can even if it's only £20 some weeks. Once you have the funds, but using CC then payoff CC, then rinse and repeat.
Flights
Hotel
Tickets
Spendo's.
I know I have gone off track but section 75 is one of the best tools we can ever use and we all have the ability to use it. If you are not seen as a good creditor, then still get a CC even if it's high interest if you pay it off you will never have to pay any. Just putting weekly fuel and paying it off straight away will build up your credit rating.

[Quensabob]

Originally Posted by YorkshireT

Simple fact is no one knows really, but we can look at the evidence and then decide if you want to cancel. The risk with TC isn’t really getting your money back, it’s the cost of replacement flights if the worst does happen.

Personally if I had a holiday booked for 2020 I wouldn’t be concerned at all really. In fact I like TC very much and did consider on Thursday booking a well priced flight for summer 2020. But it has now got too hot for me so I decided Friday not to go ahead. But for 2020 if I had one booked, I would sit tight.

It is a more difficult decision for me for this summer, and as I’ve said elsewhere I was caught by Monarch and it cost me more in alternative flights. So personally if I currently had a flight booked with TC for summer ( and I almost did) I would now be weighing up the cost benefit analysis of whether to cancel or not, and how much it would cost extra overall to have peace of mind, knowing if something did happen I may then have to pay a lot more. That’s a personal decision only the individual can make.

Looking at the evidence, this is what I see as the pros and cons from what I am reading , but no one on here knows what the lenders are doing or thinking. My expertise is just running a business that turns over quite a few million, so know quite a bit about margins, profits, share prices and how banks work from that, but others on here claim to be financial experts so maybe listen to them as they may know a lot:

Pros:

1) Airline is allegedly profitable, so could be a decent buy.
2) Parts of underlying business could be profitable according to people on here.
3) Short sellers buying debt- looking at debt for equity swap if it gets too bad which means I assume they’d keep it going on sell off sections.
4) Alleged interest from Chinese part owners who could snap up the rest for a bargain.
5) If parts are profitable if it goes into administration the administrator may keep it trading and it be turned around then- HMV as an example with a new buyer then coming in.
6) Entering more profitable part of year and TC says they have the cash to keep going. But the big problem here is are bookings still being made in anything like the numbers?

Negatives for me are:

1) Airline failure insurers have started to refuse cover. This would be massively profitable for them if TC continues to trade, they must be getting huge numbers of enquiries. But they cannot go higher on exposure and/ or think it’s too risky.
2) Gross profit means nothing, if company is making a huge loss. To run a business it is not only the direct cost of supply, but the ancillary cost that results in net profit- if you are making money. There is a significant net loss here, how will that be turned around?
3) Very large debts. No obvious way how that will be paid down.
4) Credit card companies are allegedly getting twitchy and have appointed a leading accountancy firm to advise on adverse exposure.
5) Leading analyst says shares are worth nothing, as the company is worth nothing.
6) £300m additional funding is contingent allegedly upon airline being sold.

I am sure there is more, those with more expertise can add.

But looking at the above, I have made my mind up. It maybe it will all pass over and be restructured and be fine. As I said before though I suspect something needs to move positively for TC quickly as people will be stopping booking which will add massively to the woes, so it needs to announce something quick so it will not be a self fulfilling prophecy in my view.

As I keep saying I’m a big fan of TC, I’ll be gutted if it does go as for many years now I have only flown with them from Manchester and I often find Virgin prices outrageous. Less competition would be terrible.

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I know Monarch were different but we lost our Holiday when Travel City Direct went bust 4 days before we were due to fly, they went under at 2am!
Funny enough by 8am that morning Virgin Atlantic suddenly had a sale and we had new flights booked in 15 minutes,I am sure other airlines will suddenly find seats on their planes or if enough demand put on more planes,Virgin will definately cash in!
Not that I think they will need to!

[darsch1982]

When you take the thomas cook write off its actually less than tui.
Tui has made hell of a loss aswell yet they arent piblishing as much its just because they see its making them more money and tui are keeping i spoke to TC and was told buisness as usual and that they are looking at selling the airline to invest in there tour operator hotel and service instead

[YorkshireT]

Originally Posted by Quensabob

I know Monarch were different but we lost our Holiday when Travel City Direct went bust 4 days before we were due to fly, they went under at 2am!
Funny enough by 8am that morning Virgin Atlantic suddenly had a sale and we had new flights booked in 15 minutes,I am sure other airlines will suddenly find seats on their planes or if enough demand put on more planes,Virgin will definately cash in!
Not that I think they will need to!

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You could be right, it’s demand and supply and pricing decisions.
Problem I face is I go in school holidays and book very early, and the price usually then goes up a lot- the Monarch situation cost me about £1k which could have been worse.
In terms of a USA Disney trip another factor features with me also. I have DVC so if I cancel late, I’d lose the entire booking and points potentially if I couldn’t get another flight for the same day. If you are on a cancellable hotel or package and are flexible about re booking, again you have less to worry about.

[hallamdisneyfan]

I am a little concerned - as our flights in 8 1/2 weeks are with Thomas Cook. We paid directly (not a third party) by credit card and we have insurance which covers airline failure, so it's not money for the flights I'm worried about losing - more that we could miss out on the holiday of a lifetime.
DH thinks that we will struggle to find another flight, but if it all goes pear-shaped we will try to do that. For the moment we are sitting tight and hoping it will all be OK.

[DiszeeBelle]

We go end of July and are not cancelling. Would lose far too much. They seem to be making an example of TC for some reason. For us, not others which is their choice and right, what will be will be. Devastated if the worst happens but covered through Abta and atol. DLP will be the replacement.

[DJA_PH]

I was similarly worried, flying in 4 weeks. However in another thread there’s some good info and today the CEO released a statement stating everything will be okay and they have the resources they need.

[scottsman]

Let’s be frankly honest here, various companies are showing an interest in TC knowing that if they buy them the absorb their liabilities.
If virgin (for example) thought they were going bust they would simply wait for them to go into administration and buy their assets at a knockdown rate with no liabilities! This just makes it very clear that they thing tc will survive

[Mjspin]

In my view, whilst there is a story, it is being sensationalised by the press. The losses recorded are mostly accounting treatment hitting profit, not cash. It is quite possible to post losses so long as your cash position is stable in just the same way that you can post profits and go under due to cash flow issues - a very common occurrence in smaller businesses.

[bighal]

If you make a loss you are not profitable... Its the longer outlook that matters. Simple answer is that TC could run out if money as to borrow more they need to sell the airline whereas TUI have the cadh to keep going. Traditionally airlines and tour operators lose money in the quieter winter months but make up for it in the summer months so it will come down to how they do in the busy summer that will make or break them. Norwegian are in a similar situation as TC.

Other things come into play like needing cash instead of credit to pay for fuel and landing fees etc which can make it harder for an airline to operate. I do believe Globespan collapsed not because it was badly run but because their credit card handler didn't pay them and they therefore had cashflow issues and ran out of cash.