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Published on Wednesday, October 23, 2019

Fontenla-Novoa urged to show a 'little more humility' in Thomas Cook probe






Thomas Cook former chief Manny Fontenla-Novoa was urged to show a little more 'humility and introspection' when he appeared before MPs today.

After insisting several times that he had no regrets about his acquisition of Mytravel or The Co-operative Group during his leadership, Rachel Reeves MP asked him one more time if he believed he was in anyway responsible for the collapse of the company.



Struggling at times to get his words out, the former chief told the Business, Energy and Industrial Strategy Committee: "I feel I got those major decisions right."

Reeves pointed out that the two subsequent CEOs, Harriett Green and Peter Fankhauser, had both blamed the failure of Thomas Cook on decisions made by Fontenla-Novoa.

"They both blame the decisions you made, the acquisition of those other companies and the build up of debt that prevented them from carrying out the modernisation strategy," she said.

"A little bit more humility and introspection about what went on wouldn't go amiss, but we've missed the opportunity for that from you today."


Fontenla-Novoa insisted the recent growth of Jet2, On the Beach and Loveholidays 'from nowhere' proved that there was still a place for a traditional package holiday and that his longterm strategy for the group was the right one.


He said he did not accept claims by Fankhauser that his acqusitions were to blame for the failure of the busines


"I can't accept that. If Peter felt that, maybe they should have done something about that debt and looked at disposing some assets and they should have done something about it earlier," he told MPs.


He defended his £12.8 million income during his time at the company, when Cook's profit was wiped out and net debt almost doubled.


"Yes, they are big amounts but I believe they are justified. Objectives were set and were then measured at the end of every year and bonuses were put in front of shareholders for voting on," he said.


Harriett Green, who took over as CEO for a 28-month period in 2012, told MPs that digitalisation was the answer.


She said she was unable to complete the transformation that she began because the company's Board had told her they wanted the company to be led by a more 'traditional travel person' and that her services were no longer required. See separate report.


Reeves criticised Thomas Cook's senior management for all passing the buck for the company's failure.


"Everybody has blamed everyone apart from themselves. It would be good to see someone from Thomas Cook holding their hand up and saying 'we got it wrong and I wish we'd done it differently'," said Reeves.

Another MP said the company seemed to be constantly going through restructures and transformations but with none given enough time to be properly executed.
 

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