Thomas Cook bankruptcy - what are the consequences for Czech customers?

The bankruptcy of the British tour operator Thomas Cook has been discussed a lot over the past few days in the press. It’s unenviable situation has spilled over to Germany and Austria, where Thomas Cook subsidiaries have also applied for insolvency. This development has affected Czech travelers who departed for holiday from Vienna or Munich with the Austrian or German subsidiary of the tour operator. The Czech company, Thomas Cook s.r.o., which sells tour packages under the name Neckermann, has not yet entered the insolvency/ bankruptcy proceedings. However, due to rapid developments in this matter, this may happen soon. So what should customers do if a tour operator goes bankrupt?

Once a tour operator reports bankruptcy, customers need to be prepared to not go on package tour they have purchased. The customer´s rights vis-a-vis a bankrupt tour operator can vary depending on whether the customer has not yet started their travel on a package tour, or has been stranded at the tour destination due to the bankruptcy of the tour operator. In the first case, customers have the right to the refund of a price of the package tour. If customer only paid deposit for a package tour, the tour operator or the insurance company will only refund them the deposit. Customers who have already commenced their package tour when the tour operator went bankrupt have the right to be repatriated to their home city/ country at the expense of the tour operator or the insurance company.  Furthermore, the tour operator is required to compensate the traveler for the unused vacation.

As a law firm specializing in travel law, we recommend that clients not contact their bankrupt tour operator with their claims, but instead contact the insurance company who has insured the tour operator against bankruptcy. Every tour operator is required by law to have this insurance under Act. No. 159/1999. Customers can contact the insurance company where the tour operator is insured through a two-page form that the tour operator is obliged to issue to them before purchasing the package tour. The contact information is also stated in the proof of bankruptcy insurance that the tour operator is obliged to provide to the customer on request. If the tour operator has not disclosed the name of its insurance company to the customer prior to the conclusion of the travel contract, the customer can find it in the list of tour operators on the website of the Ministry of Regional Development.

Since 2018, the Czech Republic Guarantee fund for tour operators ensures that even if the tour operator was underinsured, the customers will get their money back from the state fund.