James Moore: It's probably good that Thomas Cook didn't go for an emergency landing

Outlook Here are some figures that ought to scare you a little, if you happen to have taken out a package holiday with Thomas Cook. Last year, despite its well publicised problems, the tour operator's UK arm generated sales of £2.35bn. At the same time, the Air Travel Organisers' Licensing (ATOL) fund to protect those who would otherwise be left high and dry in the event of a holiday company going bust was (at the beginning of 2011) £42m in deficit.

Now it's true that ATOL generates income of just over £40m a year from a levy on each package holiday sold. There is also insurance in place against a really big failure (good for maybe £300m) and an overdraft. Would it be enough in the event of a Thomas Cook going under?

"We're Thomas Cook; we're ATOL protected" was the mantra from the company when it looked to be at risk of entering a death spiral. Just how good that protection is came alarmingly close to being tested last year.

Of course, yesterday Thomas Cook was crowing (quietly). Mercifully, the question might not need answering because the business is no longer cooked. A new financing package is being hammered out that ought to provide some long-term stability to a company which has been attracting the sort of adjectives – troubled, embattled, beleaguered and so on – that tend to frighten consumers who have visions of being stranded at far-off airports.

That ATOL mantra seems to have convinced enough customers to stick with the company to give its executives enough breathing room to convince bankers that a new financing package doesn't necessarily mean throwing good money after bad.

So the sun is, theoretically, peering out from behind the clouds and there'll be bonuses all round in the boardroom if the chief executive, Sam Weihagen, pulls it off – because that's what you get to motivate you for just doing your job in the higher echelons of corporate Britain.

Whether any lessons have been learned remains to be seen.

Egged on by the City, and in pursuit of bonuses of their own, the holiday company's previous management went on a deal spree at the worst possible time while building up a mountain of debt.

That they were allowed to do this stands as yet another indictment of non-executive directors who, it appears, didn't bother to raise questions about whether this was clever. Plus ça change. Today's non-executive director expects to turn up (sometimes) with a rubber stamp, in return for a substantial fee. And a substantial lunch.

It looks as if Thomas Cook has survived and a very nasty situation has been averted. People should be able to fly out on its holidays with a little more confidence (are those fingers crossed again?) than this time last year.

All the same, it is disappointing that questions aren't being asked more loudly about whether Thomas Cook or a similar-sized rival should be allowed to get into such a dangerous situation again. And what measures should be introduced to prevent it from happening.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor