This is not good news at all for the TC staff.
It definitely looks like unless there is a miracle, TC are likely to go down the pan very soon.
They’ve asked the government for a bailout.Whilst I don’t think the government should get involved with businesses, I think there is a serious case to consider here.TC need £200m and the CAA says it will cost £600m to resolve if TC goes under - so that makes financial sense to me.
Of course they need to ensure they don’t get dragged into every business collapse, but then again the banks got a lot more of our money after they got in a mess of their own creation.
Cheers,
Nigel
Would EU rules prevent Gov bailout?
I'm inclined to agree.If the government "gave" TC £200 million to "charter" the self same flights they are scheduled to operate anyway, problem solved at 1/3 the cost.
Agree, plus if they do go pop, it will cost a fortune in redundancy and holiday from the NI fund. £200M to keep them in business is the right move.
Unfortunately if they did that then people are going to complain(as usual) as to why they didn't help all the other big businesses who have gone under like carillion.
Carillon needed a lot more than £200M.
If the banks and other financial organisations won't lend TC £200m then there are likely deeper issues in the business and the government loan is likely just to be delaying the inevitable.
The issue of £600m to get everyone home, vice £200m government bailout to achieve the same cannot be relevant to the yes/no argument since it will still cost £600m to get everyone home if TC still fails as the company will still be flying people out of the UK for their holidays. The £200m won't be just to get people home will it?
After all the media attention how many would think twice about committing £1000s to book next years holiday with TC and how many third party holiday agencies would think twice about buying seats on TC aircraft?
The bottom line is they are a private company that sells holidays and flights to those that can afford them.
I think the idea is that if TC fail now then there are people stranded who need to be got home - the CAA estimate this as £600m.
But if TC get the £200m then the Chinese takeover can go ahead, the company continue to operate so the people are brought back on the TC flights as planned.
Of course that is not to say it is not going to happen again months down the road but the situation now is to pay £200m or £600m.
Cheers,
Nigel
This becomes a self perpetuating thing now and most people would think twice before booking with TC, therefore their business is going to suffer a further drop in sales that won't help any recovery.Whether the Chinese deal goes through or not it is going to be a downward spiral.
You will then get scavengers picking up the assets in the cheap again and leaving the pension pots empty.