UK holidaymakers face more uncertainty as Thomas Cook could go into administration this weekend unless it finds £200m in extra funds to secure its future.
Banks have insisted that the travel firm comes up with the contingency money in case it needs the funds in order to survive the quieter winter months.
Should the company collapse, 150,000 travellers could be stranded and require refunds and alternative means to getting to or from their holidays. Although sources have claimed that there is still a reasonable chance of a deal to save the company, the next 24 hours will prove crucial to the future of Thomas Cook.
The operator came close to securing a deal this week with Chinese firm Fosun, however the creditor banks - including Lloyds and Royal Bank of Scotland (RBS) - issued the last minute demand that the extra £200m is found.
The Civil Aviation Authority is on standby with a contingency plan called Operation Matterhorn in case a deal is not found.
The potential cost of bringing home the 150,000 passengers is estimated to be around £600m.
Thomas Cook, which employs 22,000 staff worldwide including 9,000 in the UK, has been reassuring concerned customers over social media that package deals and flights scheduled for later this year will go ahead as planned.
What to do if your package does end up being cancelled
If you are on a package holiday you are covered by the Air Travel Organiser's Licence scheme (ATOL).
This means that your accommodation abroad will be paid for, although you may have to move to a different hotel or holiday home. Your flights home are also guaranteed to be covered if the airline is no longer operating.
The scheme covers refunds for future holidays people have booked that are cancelled.
For those who have not booked package deals, it is a little more complicated. You will need to contact your travel insurance provider
Run of financial difficulties
Thomas Cook is believed to be attempting to keep the rescue on track by talking to the creditors as well as Fosun. Earlier this week it had succeeded in finding a backer to provide the £200m, however this fell through and the banks will not consider any deal unless the extra money is on the table.
The travel operator posted a loss of £1.5bn for the first half of 2019, blaming customers delaying booking holidays because of Brexit uncertainty, as well as the prolonged heatwave in Britain last year, for the downturn.
And with reduced revenue over the winter period, as well as suppliers to pay for services provided over the busy summer months, the operator can expect to face financial strain in the coming months.
It is this precarious position that had prompted the creditors to demand the £200m contingency money.
RBS said, "As one of a number of lenders, RBS has provided considerable support to Thomas Cook over many years and continues to work with all parties in order to try and find a resolution to the funding and liquidity shortfall at Thomas Cook."
Thomas Cook is one of the world’s largest travel companies, with annual sales of around £9bn.