Thomas Cook’s financial difficulties are headline news today with both national and trade news covering the story. It’s only natural that customers are concerned about their holidays – especially when so many media outlets report the news using words such as “thousands to be stranded overseas”. If you google (and other search engines are available) Thomas Cook today – the first results are precisely these news reports – you have to scroll through them before you can even find the company’s booking website. This type of reporting is hugely damaging to Thomas Cook and will inevitably deter customers from booking new holidays with Thomas Cook – which could turn this entire story into a self-fulfilling prophecy!

However, customers should not panic. Travel, and particularly the package travel market, is very heavily regulated for precisely this reason – to protect customers in the event of a company’s financial failure. If customers have booked a package holiday with Thomas Cook – those customers will be protected. If the package holiday includes flights then it is ATOL protected, and the UK’s Civil Aviation Authority will ensure customers receive a full refund if they haven’t yet travelled, or if already on holiday, the CAA will ensure the holiday continues as normal and will arrange flights back to the UK. For packages which don’t include flights, Thomas Cook is an ABTA member and holds a bond with them – so ABTA will step in to assist and ensure customers receive a refund. If customers have booked a Thomas Cook flight only, then if they’ve received an ATOL Certificate the CAA will assist as I’ve mentioned above. Otherwise, customers should look to their travel insurance. Also - anything purchased by credit card will be protected and customers can claim a chargeback from their credit card company.

If customers have booked a third party package via Thomas Cook as a retail agent then the customer’s contract is not with Thomas Cook and shouldn’t be affected by Thomas Cook’s failure. If you’re a company using Thomas Cook as a retail agent – you may want to check your payment terms with Thomas Cook, however ABTA members using ABTA’s retail payment scheme may well have some protection there – it’s worth checking your agreement with Thomas Cook and contacting ABTA if you’re unsure.

Lastly, we all have our fingers crossed here at Kemp Little for Thomas Cook and hope they manage to secure the additional funding they need. It would be an incredible shame for the travel industry and the UK as a whole to lose such an iconic brand. All of us within the industry owe a duty to alleviate customer concerns and support both Thomas Cook and our friends and colleagues who work there.

Farina Azam is a partner and the travel lead at Kemp Little, specialising in regulatory advice and commercial and consumer contracts for the travel industry. Her clients include tour operators, airlines, online travel agents and hotels. She’s very experienced in advising on the regulatory implications of selling package holidays and flights, as well as customer terms and conditions and a range of commercial contracts. If you have any questions or require any further assistance please contact her on or 020 7710 1646.