UK government faces calls to ‘fast-track’ Thomas Cook collapse inquiry

The UK government is facing questions over the collapse of tour operator Thomas Cook, which yesterday sparked the biggest ever peace-time repatriation programme.

Thomas Cook's long history came to an end on Monday. Picture: Lisa Ferguson
Thomas Cook's long history came to an end on Monday. Picture: Lisa Ferguson

The SNP called for the government to “explain their actions” through the process that left 150,000 holidaymakers stranded around the world and thousands of others forced to cancel planned breaks.

A total of 22,000 jobs are set to be lost worldwide, including 9,000 in the UK, after the company stopped trading yesterday morning. Thomas Cook, which dates back to 1841, had tried to secure a last-ditch rescue deal from its bank, Royal Bank of Scotland, but was forced to cease trading in the early hours of yesterday morning.

The government has said it will run a “shadow airline” for two weeks to repatriate UK tourists affected by the firm’s collapse. Transport Secretary Grant Shapps last night said its response to the crisis was “on track so far” and “running smoothly”.

Prime Minister Boris Johnston described the situation as “bewildering” and said there needed to be a change to the system that left taxpayers footing the bill to bring home stranded holidaymakers.

The £100 million flight programme, funded mainly by the ATOL programme, will see stranded tourists brought back from destinations in 18 countries from Europe to Cuba and the Caribbean.

Mr Johnson said: “I think it is a bit bewildering that you can have 150,000 people stranded ... it’s not possible for me to know exactly what happened with the directors of the board of Thomas Cook and how it came about when they paid themselves X, Y or Z.

“But we’ve got to have a system in the future whereby we make sure that tour operators are in some way prevented from simply going belly up and then requiring the taxpayer to bring everybody home.”

Business secretary Andrea Leadsom has called on the Insolvency Service to “fast-track” its investigation of Thomas Cook, with the conduct of the company’s bosses also set to come under the microscope.

Thomas Cook directors and their conduct will be investigated as part of the inquiry, according to the Department for Transport.

Scottish Government transport secretary Michael Matheson said: “We are saddened by the collapse of Thomas Cook, which has a long history with many jobs in Scotland, the UK and overseas.

“We are working closely with the UK government and the Civil Aviation Authority (CAA) as the situation progresses and the CAA is providing detailed information for customers on their website, via a call centre and through representatives in the resorts and airports.”

He added: “This will be a very worrying time for employees in Scotland, and Scottish staff based overseas, and we recognise these job losses will have a disproportionate impact on women.”

The last Thomas Cook passenger flight landed at Manchester Airport yesterday morning, with passengers reporting that staff were “emotional and crying”. The first repatriation flight departed New York for Manchester with more than 300 passengers on board at 9:40am.

Hundreds of thousands of customers have had future holiday plans ruined, with many people forced to cancel overseas weddings or honeymoon trips as a result of the collapse.

Customers who booked a package holiday will be entirely reimbursed through the ATOL protection scheme, while passengers who made flight-only bookings with Thomas Cook are also being brought home at no extra charge.

However, those who did not book a package holiday and are not yet abroad may not be covered by the ATOL scheme. Instead, they may be able to claim through travel insurance – although many policies do not cover a company failure – or if they paid by credit card, through their provider.

The majority of the £100m cost of the repatriation programme will be met from funds held by the ATOL scheme, with the government also making a contribution.

Mark Tanzer, chief executive of ABTA, the travel agent industry body, said: “Along with many others in the industry, I am extremely saddened by today’s news about the demise of Thomas Cook. It is one of the UK’s most iconic travel companies and thousands of staff are facing losing their jobs. For customers and other travel businesses working with the group, this will be an extremely worrying time.”

The days leading to Thomas Cook’s collapse were not the first time the firm had faced financial difficulties. In 2011, following the last recession, the company warned it was struggling with financial problems due to fewer people booking breaks and turned to its bankers for cash to plug the gap. XL, Britain’s third largest holiday company, also collapsed at the beginning of the recession in 2008.

Scottish Passenger Agents’ Association president Ken McLeod said: “This is a terrible day, not just for the UK travel industry, but on a global scale as well for the most renowned name in travel.

“Our first thoughts are with everyone who is affected by this, whether they are holidaymakers, staff or affected third parties such travel agents, hotels and other suppliers.”

He added: “We know that our own member agencies up and down the country are working very hard to assist customers who are currently on holiday with Thomas Cook and who have booked to travel in the future.”

Richard Moriarty, the chief executive of the CAA, said the government had asked his organisation to launch “the UK’s largest ever peace-time repatriation”. The exercise will involve flights from 53 airports in 18 countries and has been codenamed Operation Matterhorn.

Around 40 aircraft from as far away as Malaysia have been chartered to operate about 1,000 flights over the next two weeks.

Most of the flights will be from European airports, but customers will also be brought home from Thomas Cook’s long-haul destinations such as those in the US, the Caribbean and Cuba.

Adam French, Which? consumer rights expert, said: “Hundreds of thousands of holidaymakers affected by the collapse of Thomas Cook will be incredibly worried, especially if they are currently still on holiday and stranded abroad. The good news is that ATOL protection will mean they will be flown back home free of charge.”