What will happen to Thomas Cook’s aircraft?
Following the collapse of British travel giant Thomas Cook Group, the UK has lost a significant player in the aviation market in its subsidiaries known as Thomas Cook Airlines UK, Thomas Cook Scandinavia and Thomas Cook Spain. The fourth airline, Frankfurt-based Condor, in which Thomas Cook owns just less than 50%, says it will keep flying.
While many leisure airlines tend to operate a fleet with a single aircraft type, the overall Thomas Cook Group operated a mixed fleet of 85 Airbus aircraft and 31 Boeing jets for a total of 116 aircraft based across Europe. In the UK, the company had a fleet of 44 aircraft consisting of a mix of Airbus A321 and A330 jets.
All except five of Thomas Cook's aircraft are leased from a total of 38 leasing companies or specialist aviation investment firms. Aircraft leasing is common practice in the industry, with payments set up in installments. According to a KPMG report, around 15% of the global aviation fleet was leased by airlines in 1999. As of 2019, that number has risen to almost 50%.
Today, aircraft leasing companies around the world, including Aircastle, Avion Express, ALC and SMBC Capital, own more than 12,000 aircraft operating at a variety of airlines, from full-service carriers to low-cost carriers and start-up airlines.
For the majority of leasing companies, narrow-body aircraft like A320s or 737s are the most attractive. These jets have the biggest profit margins for lessors, as they're easy to be transferred from one airline to another with little significant change.
In the event of an airline failure, aircraft leasing firms demand the return of their planes, and Thomas Cook's aircraft lessors are already making moves to recover dozens of Airbus jets, according to market sources. Given the company has now ceased operations and entered administration, lessors will want to reallocate aircraft as soon as possible in order to avoid having idle, grounded aircraft. Once aircraft have been repossessed, lessors will often ferry aircraft to the base of the leasing company. Things that could follow include removal of livery branding in order to ready the aircraft for a quick transfer to another airline seeking additional commercial aircraft.
"We have seen a significant uptick in demand for used aircraft," Aengus Kelly, chief executive of AerCap, told KPMG.
As Thomas Cook owns some of its aircraft, the company's administrators will consider them as significant assets on the balance sheet and will likely sell the jet to a lessor or airline, but this could take some time.
The nature of Thomas Cook's collapse is very similar to when its former leisure airline group competitor, Monarch Airlines, entered administration in 2017. With Monarch's jets returning to lessors following the end of its operations, one of its Airbus A321s soon started a new life flying for Thomas Cook. Rather than repaint the entire aircraft, which would have been costly, the jet wore a hybrid livery — half Monarch and half Thomas Cook.
This very jet, registered as G-TCVA, will now return back to its lessor, Aviation Capital Group once again — wearing the blended livery of two collapsed leisure airline brands.
TPG featured card
at Bilt's secure site
Terms & restrictions apply. See rates & fees.
| 1X | Choose to earn up to 1X points on rent and mortgage payments with no transaction fee |
| 2X | Earn 2X points + the option to earn 4% back in Bilt Cash on everyday purchases |
Pros
- Choice to earn up to 1 Bilt Point per dollar spent on rent and mortgage payments
- Elevated everyday earnings with both Bilt Points and the option to earn Bilt Cash
- $400 Bilt Travel Portal hotel credit per year (up to $200 biannually)
- $200 Bilt Cash annually
- Priority Pass membership
- No foreign transaction fees
Cons
- Moderate annual fee
- Designed primarily for members seeking a premium, all-in-one card
- Earn points on housing with no transaction fee
- Choose to earn 4% back in Bilt Cash on everyday spend. Use Bilt Cash to unlock point earnings on rent and mortgage payments with no transaction fee, up to 1X.
- 2X points on everyday spend
- $400 Bilt Travel Hotel credit. Applied twice a year, as $200 statement credits, for qualifying Bilt Travel Portal hotel bookings.
- $200 Bilt Cash (awarded annually). At the end of each calendar year, any Bilt Cash balance over $100 will expire.
- Welcome bonus (subject to approval): 50,000 Bilt Points + Gold Status after spending $4,000 on everyday purchases in the first 90 days + $300 of Bilt Cash.
- Priority Pass ($469/year value). See Guide to Benefits.
- Bilt Point redemptions include airlines, hotels, future rent and mortgage payments, Lyft rides, statement credits, student loan balances, a down payment on a home, and more.