The British company Thomas Cook, a tour operator and airline specializing in low-cost bookings for vacations, collapsed on September 23, 2019. The company declared bankruptcy, failing to secure negotiations to alleviate debt approaching $2 billion, affecting approximately 600,000 travelers. The British government has enacted a repatriation program to return stranded passengers whose flights originated in the United Kingdom. Passengers from other locations, however, will have to book their own flights home. Prime Minister Boris Johnson stated that the British government would refrain from bailing out the company on the premise that such action would then encourage other firms to take undesired risks.
Thomas Cook’s demise can be attributed to massive debt, but the underlying cause is the company’s failure to be prepared for a changing business environment. The company’s inability to anticipate and adapt to both the uncomfortably hot summer caused by the climate crisis and, more importantly, consumer and economic uncertainty caused by Brexit and a drop in the Sterling, led to its abrupt liquidation. Forward-looking business models are imperative in preparing companies for all business environments, including risky ones caused by a changing geopolitical order.
