Thomas Cook collapse: Brexit and hot weather to blame for firm’s failure, says CEO

Peter Fankhauser tells Business Select Committee ‘I’m not going to decide today’ whether to hand back some of his bonus

Simon Calder
Travel Correspondent
Tuesday 15 October 2019 12:50
Thomas Cook chief executive criticised by MPs

The hot summer of 2018 hastened the demise of Thomas Cook, the chief executive has told MPs. “The anxiety of Brexit” was also blamed for the failure.

Peter Fankhauser was running the company when it failed on 23 September 2019 – leaving almost one million customers with current or future holidays cancelled.

He told MPs on the Business Select Committee: “When I took over in 2014, the debt was at a level I assessed as a challenge.

“We were in an extremely good position in May 2018. And then the heatwave came. It was so late in the season, all the flights were scheduled.

“We were overtaken sometimes by external events.”

Mr Fankhauser began the session by saying: “I really wanted to repeat in front of the members of the select committee how deeply sorry we are that we couldn’t save this iconic brand.”

The committee chair, Labour’s Rachel Reeves, demanded to know how much of his 2017 bonus – around £520,000 in cash – would be clawed back.

She said: “Your apologies would ring a bit more true if you were willing to do something about it.

“At the moment I’m afraid, Mr Fankhauser, the number of times you’ve said sorry just rings hollow when you’re not willing to hand something back.”

Mr Fankhauser said: “I’m not going to decide that today.”

The chief executive also said: “I worked tirelessly for the success of the company and I’m deeply sorry that I failed.

“There were multiple parties who had to contribute to the deal which finally didn’t succeed.”

When the 178-year-old travel company went bust, 9,000 Thomas Cook staff lost their jobs.

Other directors were criticised by MPs for implausible predictions of growing earnings by 28 per cent, and for keeping on the balance sheet goodwill associated with the purchase of MyTravel in 2007.

“The goodwill wasn’t worth £2.5bn in 2018, was it?,” said Antoinette Sandbach, an independent MP.

Last week Mark Tanzer, chief executive of Abta, the travel association, described the collapse of Thomas Cook as “more a failure of corporate finance than a failure of travel”.

Mr Tanzer said: “Thomas Cook paid £1.2bn in finance charges over the past six years, plus goodness knows how much in advisory fees to the City.”

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