Online travel agent Webjet looks set to take an earnings hit and could write off $43.7 million following the collapse of UK travel company Thomas Cook.
Webjet on Monday said it had expected to earn between $150 million and $200 million in FY20 total transactional value from Thomas Cook, which owed Webjet about $43.7 million when it collapsed over the weekend.
“The impairment of any unpaid receivables will be treated as a one-off expense to the income statement,” Webjet said in a statement to the ASX.
The firm said the write-off would be covered by existing cash reserves that stood at $211.4 million at June 30 plus undrawn debt facilities.
The demise of the 178-year-old Thomas Cook is also expected to reduce the $27 million to $33 million in additional earnings Webjet had anticipated from its WebBeds accommodation business by as much as $7 million.
Webjet shares dropped as much as 6.0 per cent but rallied by 1246 AEST to sit just 1.6 per cent lower at $11.33.
Thomas Cook, which was founded in 1841 by a cabinet-maker of the same name to carry anti-alcohol campaigners between English cities, ceased trading after failing to secure a last-ditch rescue deal over the weekend.
The company was unable to secure an extra $368 million demanded by its lenders, leaving 150,000 Britons stranded overseas.
An emergency operation codenamed Operation Matterhorn will aim to bring home the 150,000 British tourists in what is believed to be the biggest peacetime repatriation operation in British history, the BBC reports.
Empty aircraft have already begun flying overseas to bring Thomas Cook customers home. Customers who have not yet left the UK are being told not to go to the airport.
Earlier, Flightradar24 captured dozens of Thomas Cook aircraft flying back to Britain as fears grew for a collapse, which was eventually confirmed after midnight in the UK.
In a statement, Thomas Cook said the company’s board “concluded that it had no choice but to take steps to enter into compulsory liquidation with immediate effect”.
“It is a matter of profound regret to me and the rest of the board that we were not successful,” the company’s chief executive Peter Fankhauser said.
“I would like to apologise to our millions of customers, and thousands of employees, suppliers and partners who have supported us for many years. Despite huge uncertainty over recent weeks, our teams continued to put customers first, showing why Thomas Cook is one of the best-loved brands in travel.
“Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder’s spirit of innovation.
“This marks a deeply sad day for the company which pioneered package holidays and made travel possible for millions of people around the world.”