Tui’s share price bumped up almost 10 per cent today after Thomas Cook fell into liquidation.
Travel operator Tui saw shares rise just shy of 10 per cent before trimming gains to stand 7.7 per cent up at 903p in early trading as its rival collapsed under the weight of a £1.7bn debt mountain.
British airline rivals Ryanair was up 3.9 per cent, while British Airways owner IAG rose 1.2 per cent on Thomas Cook’s demise.
Budget flyer Easyjet also soared 4.8 per cent as sector rivals benefited from a major competitor biting the dust.
“The effects will be felt across the sector, not all bad,” Markets.com chief markets analyst Neil Wilson said.
Tour operator On the Beach warned of a one-off hit today from helping Thomas Cook customers make alternative arrangements to fly home.
“The group expects to be able to recover the costs of the cancelled flights via chargeback claim (as was the case for the Monarch failure in 2017),” the firm said.
“This one-off exceptional will be booked in the current financial year. The Board is currently evaluating the potential effects of the failure on its forecasted performance for the year ending 30 September 2020, and a further update will be provided when appropriate.”
Wilson added that Chinese firm Fosun, Thomas Cook’s majority shareholder leading a £900m rescue deal for the struggling firm, “wasn’t prepared to pay a penny more”.
The travel giant blamed lenders’ last-minute demand for an extra £200m in any agreement for sinking Thomas Cook’s chances of survival.
“One wonders how culpable the banks who at the last gap tried to squeeze Thomas Cook for another £200m are in this collapse,” Wilson added. “Could the refinancing have worked? We’ll never know for sure.”
Read more: Thomas Cook: What happens now?
Michael Hewson, chief market analyst at CMC Markets, added that collapse became “inevitable” after a £750m rescue package agreed in July grew to £950m.
“The request by bankers for another £200m on top of the £950m was the final straw for a company that has been in the last chance saloon for several months now,” he added.