Shares in Europe's second-largest tour operator lost three-fourths of their already depressed value after the company said it was seeking new agreements with its main creditors, barely a month after announcing it had negotiated new funding arrangements to carry it through the slow winter months.
The company insisted flights would leave as usual and that it was taking new bookings, but Britons who have bought holidays through the firm were anxious.
In Canada, Halifax-based Jazz Aviation said it has launched its second season with Thomas Cook Canada earlier this month.
"From Jazz's perspective, it's business as usual," Jazz said in a statement.
Jazz Aviation has signed a five-year flight services agreement with Thomas Cook Canada to operate six Boeings 757-200 on their behalf to the Caribbean, Mexico and Central America. This winter season, Thomas Cook Canada will fly from Toronto, Calgary and Vancouver.
Several small British travel firms have gone under since the global economic crisis hit in 2008, but Thomas Cook is an industry giant, and a fixture of Britain's main streets.
Jamila Juma-Ware, 27, who has booked a holiday in Tenerife in the next three weeks for herself and her mother, said she was "praying it's going to be all right ... but I'm not confident."
"There are a lot of small independent travel agents around here, but I said I'd rather just book it through someone like Thomas Cook because they're big and there's more of a guarantee they won't go bust," Juma-Ware said. "And then this week this happens. "
Thomas Cook is, like many airlines and tour operators, suffering from weak consumer demand as Europe's financial crisis has people worried about their jobs.
Unrest in Tunisia — normally the top winter destination for French travellers — and Egypt, flooding in Bangkok and disappointing sales in Russia have all added to the pressure on the company.
Analysts said the financial troubles could scare away customers, darkening the firm's prospects.
"Legitimate questions will be asked as to whether Thomas Cook can survive long-term," said James Hollins, analyst at Evolution Securities. He added that he believed the company could pull through on the strength of businesses outside Britain, but "a more flexible financial structure and massive turnaround are required."
Thomas Cook Group PLC shares were down almost 75 per cent at 10.41 pence in afternoon trading in London. On July 1, shares had closed at 134.5 pence.
Thomas Cook was due to report annual earnings for 2010-11 on Thursday, but it has put that off indefinitely "as a result of deterioration of trading in some areas of the business, and of its cash and liquidity position since its year end."
Sam Weihagen, Thomas Cook's interim chief executive, insisted it was business as usual: "Flights are leaving on schedule, shops are open and we're taking bookings."
Weihagen said people who book package holidays would be protected by the Air Travel Organizers' Licensing insurance program which is funded by contributions from travel companies. However, those who book only flights are advised to buy their own travel insurance.
The group has previously announced plans to reduce its fleet of 41 aircraft to 35, and it hopes to raise 200 million pounds ($312 million) by selling assets including its stake in Britain's part-privatized air traffic control service.
Wyn Ellis, analyst at Numis Securities, said Thomas Cook's announcement could frighten new customers and alarm suppliers. The company, he said, "faces a difficult near-term future which could lead to significant loss of market share."
The company takes its name from the cabinetmaker Thomas Cook, who had a flash of inspiration while walking to a temperance meeting in 1841 to use the railways to help promote abstinence from alcohol.
Cook's first venture was to charter a train which carried about 500 passengers in open coaches on a 12-mile round trip.
"Thus was struck the keynote of my excursions, and the social idea grew up on me," Cook later recorded.
He organized more trips for temperance societies and Sunday schools. He took his business a step further in 1845 by arranging a trip to Liverpool, which included a 60-page booklet in the price of the ticket.
The International Exhibition in Paris in 1855 inspired Cook to organize a trip to the continent. Ten years later, he was organizing railway tours in North America.
Associated Press Writers Jill Lawless and Cassandra Vinograd and The Canadian Press contributed to this report.