Government under fire over collapse of Thomas Cook

By Nadeem Badshah

MINISTERS have been criticised for failing to stop the collapse of travel firm Thomas Cook – as customers were told they may have to wait up to two months for refunds.

An online refund system is due to launch on October 7 after the company went into liquidation last week, putting 9,000 UK staff out of work and leaving 150,000 British holidaymakers stuck overseas.

The Civil Aviation Authority (CAA) said direct debit customers would be refunded within 14 days, but added others would have to wait up to 60 days.

Thomas Cook secured a £900 million rescue deal led by its largest shareholder in August but a recent demand from its banks to raise a further £200m saw the deal collapse.

Business secretary Andrea Leadsom has been criticised after it emerged she did not speak to executives from the holiday firm leading up to its closure.

Documents show Leadsom, ministers and officials from the Department for Business, Energy and Industrial Strategy (BEIS) had a little discussion with the 178-year-old firm until after it had entered liquidation.

Over two-thirds of people on holiday when the tour operator collapsed have flown home to the UK as part of Operation Matterhorn.

The majority of Thomas Cook holidays are packages. Anyone who has bought a package holiday will be covered by the Air Travel Organiser’s Licence scheme. The CAA said this week that more than 43,000 people abroad were due to return on or before Sunday (6).

Sid Singh, 52, and his wife, from Bradford, had to travel home from Mallorca after being left stranded. The couple flew out a day before the firm went bust.

Singh said: “No one said anything: no reps, whether the rep will be coming or not. There are other people we’ve travelled with, but they’re in different hotels, so we’re not sure what’s happening with them. There were two women from Leeds.”

Reena, who bought a package holiday from Manchester to Split in Croatia and was due to travel last week, said: “I checked in at the airport, I assumed nothing of it. I lost out on flights and hotel.

“I don’t know whether to cry. If I was there, at least I am stranded in a nice hot country, but I was in Manchester Airport. I am on annual leave, I have to twiddle my thumbs at home.”

Labour MP Afzal Khan, who has supported the travel company’s employees in Manchester, told Eastern Eye: “I was shocked to hear the devastating news over the collapse of Thomas Cook. I know it is impacting our city and community hard, with over 3,000 people in Greater Manchester employed by the company.

“This is another example of the government’s failure to take action. This government failed to learn its lesson from the similar Monarch collapse which took place two years ago.

“This sad and tragic event has left British holidaymakers and Thomas Cook staff in a state of limbo. The unions Unite and the Transport Salaried Staffs Association have fought valiantly for their members, while this government have done nothing.

“My Labour colleagues and I have spoken out against the government’s decision to not inject £200m to save the company and instead chose to spend £600m on the largest repatriation effort since the Second World War.”

Thomas Cook staff have been told to apply for their salary and redundancy-related payments from the Insolvency Service’s Redundancy Payment Service. Dozens of people who lost their jobs protested outside the Conservative Party Conference in Manchester on Monday (30).

Tanmanjeet Dhesi, the Labour MP for Slough in Berkshire, told Eastern Eye: “The collapse of Thomas Cook is catastrophic for so many, including holidaymakers and Thomas Cook employees. The government were warned about this collapse, yet it chose to do nothing.

“Thanks to the swift work of the Civil Aviation Authority, many tourists abroad have been able to return to the UK; however many staff members remain stranded and are being supported by trade unions.

“The priority now should be offering support to all those impacted and ensuring reform on airline insolvency so this does not happen again.”

MPs are expected to question the company, regulators and ministers during an inquiry by the BEIS select committee in October.

Asked how many times BEIS ministers or officials had met Thomas Cook over the past 12 months, a government spokesperson said: “UK government officials meet with a range of businesses on a regular basis.”

Thomas Cook boss Peter Fankhauser, 58, has appeared to blame a group of banks for not backing a bail-out plan.

He said: “The longer the talks dragged on, the more uncertainty grew, increasing the likelihood of a liquidity squeeze.

“Had we been quicker, we might not be in the situation we are now.”

Fankhauser, who has been paid £8.3m in salary and share options since November 2014, accused the banks and bondholders of “trading for every point” during the doomed funding talks.

He added: “I think it would be very difficult for me to find another job in the UK.