The collapse of Thomas Cook in the early hours Monday saw the downfall of one of the biggest names in travel but some of its smaller brands continue to live on.

Through a series of mergers and acquisitions, it had built up a mini-empire of tour operators and airlines that once stretched over the globe with outposts in North America and India.

In recent times, however, the key divisions outside the UK were in central Europe and Scandinavia and some of these businesses are still doing business — at least for the moment.

“They are separate legal entities set up in their respective jurisdictions,” said Joanna Kolatsis director at legal consultancy Themis Advisory.

A similar situation happened when XL Leisure Group collapsed in 2008 and XL Airways France continued operating (ironically, the airline sought bankruptcy protection on the same day Thomas Cook went under.)

Profitable Businesses

According to its most recent annual report, Thomas Cook had tour operators in 14 different European countries as well as four separate airlines.

Thomas Cook’s Nordic businesses, including the brands Ving, Spies, Tjäreborg and Globetrotter, faced initial disruption on Monday, but were up and running on Tuesday.

“We have been a separate legal entity here in the Nordics but owned by Thomas Cook plc for the last 10, 11 years but we have been profitable here in the Nordics for many decades and we have been very profitable this year,” Fredrik Henriksson, head of communications at Thomas Cook Northern Europe, told Skift.

At group level, Thomas Cook was weighed down by considerable debts. Yet operationally in some markets it was profitable.

In 2018, its Northern European business made an operating profit of $118 million (£95 million) and its Continental European business $91 million (£73 million). Both of these are “underlying” figures, i.e. they strip out some one-off items, but it still shows that both were in OK shape.

Henriksson said the liquidators of Thomas Cook plc “would look at finding a new owner.” Earlier this year, private equity firm Triton Partners, which owns tour operator Sunweb Group, approached Thomas Cook about buying the business and the Scandinavian airline, which is also still running, and it is logical to think it would rekindle its interest.

Who Wants to Buy an Airline?

Another subsidiary looking for a new home is German leisure airline Condor. Flights are operating as normal and it has managed to secure commitment for a $419 million (€380 million) bridging loan from the German federal government and the state of Hesse — pending European Union approval — to help see it through winter.

“Condor is an operationally healthy and profitable company, which will also post a positive result in the current year. Because our liquidity was used up by our insolvent parent company for the seasonally weaker booking period, we need this bridge financing for the winter. The commitment is an important step in securing our future,” said CEO Ralf Teckentrup.

Condor claims it is in the black, making an operating profit of $47 million (€43 million) in 2018 with an increase expected this year. Lufthansa, Condor’s former owner, expressed an interest in buying it earlier this year.

“Condor has achieved positive results over the last few years and has proven that we can maintain an excellent position in the market. This distinguishes us from cases such as Air Berlin and Germania. The interest of other market participants in our company also underlines our attractiveness,” said Teckentrup.

In order to find a new owner, Condor needs to keep flying and to keep flying it needed the bridging loan. If it stops then the slots disappear and the planes go back to the lessors

“Things can be bought but you’d have to do it right now, because they’re not going to be able to stay on life support for very long,” said Alex Brignall, travel and leisure analyst at broker Redburn.

Interestingly, Condor also said it intended to use a German legal instrument to try and distance itself from its insolvent parent company.

Thomas Cook’s German tour operator businesses are also fighting to stay alive.

“We are doing everything in our power to ensure the continued existence of our company. We owe this to our loyal guests, our long-standing business partners and all our committed employees, ” said Stefanie Berk, CEO of Thomas Cook GmbH.

Operations in France, the Netherlands and Belgium are all still in limbo. Skift asked Alix Partners, which is helping run the insolvency for the airline and tour operator companies, whether it had received any approaches from prospective buyers, but it did not respond.

Management Investigation

Meanwhile, back in the UK, Thomas Cook’s management team is under increasing scrutiny from the government — and consumer media.

Business secretary Andrea Leadsom wants the insolvency service to treat an investigation into the company as a priority “given the significance of this case and its implications for thousands of customers and employees.”

Around 9,000 people have lost their jobs in the UK and hundreds of thousands of people have faced disruption on their holidays.

The collapse came after the company failed to secure a multi-billion dollar refinancing package. 

UPDATED: This story was updated to include the latest developments at Condor.

Photo Credit: A Condor aircraft. The airline is looking to secure its future. Thomas Cook