UK aviation watchdog is ‘preparing for possible Thomas Cook COLLAPSE in case rescue deal fails’
THE Civil Aviation Authority (CAA) is currently on alert in the event that the Thomas Cook rescue deal falls through.
The UK aviation watchdog could need to make alternative plans for thousands of customers if they are left stranded abroad by the holiday provider.
Thomas Cook is currently planning a rescue deal with Chinese firm Fosun, the company's largest shareholder.
The travel company plans to sell the majority of the business and a stake in the airline to Fosun.
This will include 75 per cent of the tour operating service and 25 per cent of the airline, with Fosun contributing £450 million for the deal.
Group lenders and bondholders will stump up around £450 million as well.
This is because Thomas Cook is ATOL-protected, meaning customers will be rescued if the company goes bust and they will be refunded for trips that can't go ahead.
The repatriation costs are covered by the government.
Thomas Cook's ATOL license is to renew on October 1, with claims that they have been working with consulting firm AlixPartners in regards to the company's debt.
The firm would also work with the holiday provider if the rescue deal falls through.
The CAA were forced to repatriate thousands of Brits after they were left without flights following the collapse of Monarch Airlines.
It was estimated to have cost the government £60 million.
Is my Thomas Cook holiday safe?
Thomas Cook has reassured Brits that holidays are still safe and can still be booked.
By being ATOL protected, Brits will not be left out of pocket and will be given alternative flights to return home.
However, it's worth pointing out that flight-only bookings with Thomas Cook don't enjoy the same protection.
Holidays booked with a credit card may also be able to get a refund for cancellations from their card providers under Section 75 of the Consumer Credit Act.
This is because card providers are jointly liable when a purchase or service isn't fulfilled but it only kicks in if you paid at least £100 on credit card.
If you paid less than £100 on credit card or if you paid for your flights on debit card, you may be able to get a refund via a scheme called Chargeback but there's no guarantee.
A CAA spokesperson said in a statement: "We are in regular contact with all large ATOL holders and constantly monitor company performance.
"We do not comment on the financial situation of the individual businesses we regulate."
Last month, LatesRooms and Super Break went into administration, with airline WOW air also going under in March.
However, the airline is set to relaunch next month with flights from the US to Iceland.
Sun Online Travel has contacted Thomas Cook for comment.