Thomas Cook collapse won’t hurt Australia much: Graham Turner

Flight Centre boss Graham Turner says the Thomas Cook collapse will have little impact on the Australian market.

British holidaymakers plans have been thrown into chaos by the collapse of Thomas Cook. Picture: Getty Images

Flight Centre boss Graham Turner says the collapse of British travel giant Thomas Cook is a “big thing” for the travel industry, but the impact on the Australian market is likely to be minimal.

He noted the British travel major had been struggling for much of two decades and the reasons behind its collapse on Monday were largely business-specific problems rather than pressures in the industry. “Thomas Cook was an icon of world travel. They’ve been struggling up and down over the past 20 years but actually going out of business is a big thing for a brand like that,” Mr Turner told The Australian on Tuesday.

“I don’t think it will have a big impact here. There’ll be a lot of other things that affect whether people are going to travel more than that.”

Thomas Cook, one of the world’s largest tour operators, was placed in compulsory liquidation in the early hours of Monday after failing to raise $364m needed to keep it viable, grounding its fleet of 40 UK-based aircraft.

About 600,000 travellers were affected around the world when the British agency went bust with more than $3.6bn in debts.

Mr Turner said the perception that travel companies were more vulnerable to collapse than other businesses was incorrect.

“It certainly has happened in the UK and Europe a bit, but it’s not happened a lot in Australia over the past five or six years,” Mr Turner said.

“It’s no different to any other industry in that it will happen now and then if people don’t get their business right, or when times get tough and they’ve borrowed too much and they don’t have the profits to support their operations.”

Australian Federation of Travel Agents CEO Jayson Westbury said no parallel could be drawn between the operations of Thomas Cook and the local travel industry. “No Australian travel agency business owns an airline and that’s where I believe Thomas Cook has fallen foul,” Mr Westbury said.

“They were too big, had too great a diversity of operations, and way too much debt. We run the accreditation scheme for Australian travel businesses and we know they are not debt-laden. Our structure does not allow for a heavy debt environment.”

Webjet, which was facing a $7m hit to earnings as a result of the collapse, said the problems with Thomas Cook would be isolated to the British market.

Group chief commercial officer Shelley Beasley said Webjet and its WebBeds B2B business that worked with Thomas Cook were in good shape to absorb any losses.

She said Thomas Cook was not the first travel company to go broke and would not be the last.

“It’s just part of the nature of business today — people change where they shop and how they shop and I would suggest travel isn’t the only industry like that,” Ms Beasley said.

In the past few years, thousands of Australians have been left out of pocket by travel company collapses, most recently that of discount booking site Bestjet in December.

Reed Holidays, which operated Seniors Coach Tours and Young At Heart Holidays, and Australian Specialty Tours were other notable casualties, along with the 2012 collapse of Air Australia.