30 SEPTEMBER 2019
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As with Monarch and others, the debate over the collapse of Thomas Cook will linger long after the nitty-gritty of the repatriation programme has been forgotten.
The rescue itself is a huge undertaking, committed not only to bringing 150,000 Thomas Cook customers home but to doing it on the dates they had booked originally so their holidays are not disrupted more than necessary.
Whatever the future of the debate about what this might be costing the taxpayer and why didn’t someone find some other solution (like what?), there is no denying Operation Matterhorn has proved highly professional and presumably will continue to be so until it ends next Sunday, 6 October.
In parliament and elsewhere, there were calls for the government to let Thomas Cook Airlines keep flying while the carrier’s employees (and that includes on-site representatives as well as flight crew) and clients were repatriated.
Sad to say, the situation made it impractical.
Overriding the whole concept is the question of insurance.
Without insurance, nobody flies.
Without insurance, the UK Civil Aviation Authority (CAA) will not allow an Air Operators Certificate and Operating Licence to be retained.
And the CAA will not allow an AOC unless it is for a “fit for purpose” operator.
We will not go into the myriad of requirements for an Operating Licence and AOC but essentially an airline needs aircraft (and the ownership may be in dispute), aircrew, engineering certification, airport clearance and fuel and catering.
Then it needs a ground a ground handling agent, weather and en-route navigation and a management team able to pull together all the elements of a flight. Airports dealt with and aircraft owners required to release grounded aeroplanes that they have a lien on.
Everyone would have required guaranteed payment. Sad to say Thomas Cook Airlines was insolvent.
The matter was brought up in parliament in a statement to the House on the situation by transport secretary Grant Shapps. He noted it had been suggested in the press that the government should have avoided the collapse with a bailout of up to £250m for the company and its shareholders.
But, he added: “Given the perilous state of the business, including the company’s £1.5bn half-year loss reported in May followed by a further profit warning in November, this was simply not the case, with no guarantee that such an injection would have secured the future of the company.
“And in effect, our concern is we would have put in £250m and it would have risked being thrown away – good money after bad. And then we’d still have had to pay for the cost of this repatriation.”
Without mentioning the B-word, Shapps also summarily dismissed Thomas Cook’s contention that uncertainty over the UK’s departure from the EU contributed to the company’s downfall.
“It is quite clear that in the last several years the company ran into a number of different problems trying to expand itself out through investing more in the high street rather than less, while the entire market was moving in the opposite direction,” he added.
You only have to look around. TUI seems to be doing very nicely with much the same concept of street and online business, easyJet is expanding what is in effect a 'package holiday' form of business and Virgin Holidays is a big success, as are Jet2 and British Airways offerings.
To some observers, of far more concern might be the news Thomas Cook directors over the past four years were paid £20m in bonuses despite what The Daily Telegraph called long-term fears for the company’s future. This led chief executive Peter Fankhauser in yesterday's Mail on Sunday to deny claims he is a 'fat cat' following the collapse.
Fankhauser was widely criticised after it was revealed he had received £8.3m since he was appointed in November 2014. The government is now reported to be planning an attempt to force the directors to pay back some or all of the money he and the directors received.
Full credit to the 400-strong CAA team and government departments working round the clock to support passengers in the Operation Matterhorn undertaking. They have manged to climb a mountain!
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