Thomas Cook

Crisis communications for Thomas Cook’s planned refinancing and subsequent liquidation

Reputation risk, issues and crisis management

thomas Cook


Thomas Cook is the oldest brand in the global travel sector.  With annual revenues of over £9bn and responsibility for providing more than 22 million holidays every year, Thomas Cook appeared too big to fail.  Yet in January 2019, it faced a barrage of internal and external challenges that would result in a desperate nine-month race for survival. 

With an outdated business model requiring substantial outlays to buy hotel capacity at the beginning of every season, Thomas Cook relied on a complex and fragile network of suppliers for the liquidity to fund a £7-8bn swing in working capital every year. 

In summer 2018, however, the European heatwave decimated the package holiday sector.  Thomas Cook saw profits plummet and debt balloon.  Eterna Partners were appointed in January 2019, weeks before the group announced a strategic review and sale process for its airline, in bid to shore up its balance sheet and retain the support of creditors.

“Maintain fragile consumer and industry confidence.” 


Much like a bank where the confidence of savers is vital in maintaining day-to-day liquidity, so Thomas Cook was similarly vulnerable to a run.  With little headroom in agreed debt facilities, it was critical to maintain industry confidence in the business  to facilitate a successful restructuring of the balance sheet.  Working closely with the in-house corporate affairs leads, Eterna Partners advised the leadership team throughout the summer of 2019, helping to maintain fragile consumer and industry confidence whilst management worked frantically to secure new funding.  Key was protecting the integrity of the core strategy as the basis for raising future capital.

“Eterna Partners was retained by the former directors to prepare them for their appearance before the BEIS select committee.”


Despite waves of speculation about Thomas Cook’s future throughout the peak summer season of 2019, the business was able to work throughan M&A solution and then latterly a debt-for-equity proposal while minimising business disruption.  By September 2019 the company had secured a commitment of £900m in new funding and an agreement from creditors to convert £1.6bn of debt into new equity.  In what became a race against time to secure new funds to meet a liquidity squeeze in early October, Thomas Cook’s banks then presented the company with a last-minute demand for an additional £200m in collateral.  Unable to meet this request, the company appealed to the UK government for help.  With no government offer of support the business went into liquidation.  Eterna Partners continued to support the senior leadership in their agonising task of explaining what happened to customers, employees and suppliers. 

Following the liquidation, Eterna Partners was retained by the former directors to prepare them for their appearance before the BEIS select committee.