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Published on Tuesday, October 15, 2019

Union boss hits out at 'Tory dogma' that let Thomas Cook 'go to the wall'

The Government has come under fresh criticism for refusing to save Thomas Cook.

Manuel Cortes, general secretary of transport and travel union TSSA, said the Government's decision not to step in was an 'unnecessary act of self-harm'.

He said the Government was 'mired in dogma' by ignoring the fact the request from Thomas Cook bosses was not for a bailout.

His comments came after ITV revealed that 'the decision to allow Thomas Cook to fail was ideological' - after seeing a copy of the 'commercial proposal' the firm's bosses submitted to government asking for help.

The proposal asked for up to £200 million of taxpayers' money to recapitalise the firm.

According to the ITV, Thomas Cook bosses were clear this was not a bailout but a plan which would leave Thomas Cook debt free and solvent.

Commenting on the ITV Report, Cortes said: "It's now clear that what I have been saying all along is true - the Government could easily have intervened to save Thomas Cook but chose not to.

"They did nothing because they are mired in dogma, and we now have the proof. Their mad non-interventionist ideology - central to the way this Conservative Government thinks - ignored the fact that this was not a bailout.

"Boris Johnson had the cheek to speak of Thomas Cook being a 'moral hazard' whilst knowing full-well that this was a reasonable request for help that would have saved at least 9000 jobs and stopped the repatriation of over 150,000 holidaymakers.

"Let's not forget that Fosun - a major private investor - was still happy to back Thomas Cook to the tune of £450m. At the same time the British Government allowed dogma to get in the way pf common sense and good business sense.

"This left British taxpayers footing the bill for the Thomas Cook's collapse - a total which is likely to be close to that which the Company sought to keep it solvent for the long term-term.

"Losing Thomas Cook, one of the great British High Street brands, was an unnecessary act of self-harm conjured by the Government's ideological blindness."

Former Thomas Cook chief executive Peter Fankhauser, chairman Frank Meysman and chief financial officer Sten Daugaardergy are to be questioned by MPs today over the group's collapse.

They have been called to give evidence before the government's business, energy and industrial strategy committee.

Ex-Cook chief executives Harriet Green and Manny Fontenla-Novoa are also due to appear before the committee at a later date.

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  • Thomas Cook Airline business was not like Monarch and has been supported elsewhere

    If you look at the Airline in isolation, it was not a loss making enterprise but was very successful. In fact the airline had five bidders for it, wishing to take it over as a going concern. The buyers just didn't want the rest of the business that was dragging it down and was draining the airline of money. Indeed the Germans have financially supported the German Airline subsidiary Condor, the Dutch and the Spanish have also supported the Thomas Cook airline subsidiaries based in their nations too. Condor is now operating some of the routes that was previously flown by Thomas Cook (UK). The airline, as a going concern, could have operated for at least three more months and could have brought all the passengers home after their holidays saving the tax payer millions. But the UK Government would not help and ignored the recommendations from the two public inquiries into the death of Monarch. Indeed Grant Snapps even used the exact same speech that was used following the demise of Monarch to Parliament. The Government investigations into the Monarch collapse said that there should be a chapter 11 style pause to help the business reorganise rather than pulling the plug and having the aircraft impounded around the world. Even though Thomas Cook and Monarch could have flown all the passengers and crew home, instead of leaving them in shock, out of work, stranded, without accomidation, wages or anyway of getting home. Some of them only discovering this while still in the air at two inthe morning or when they woke up. They were not covered by ABTA or any insurance, but were left to fend for themselves until the British Embassy staff and other airline workers came to their rescue. So instead of an orderly change, the axe fell and the UK arm will never fly again. This is what Diana Holland from Unite the Union (who represents the Cabin Crew and Aircraft Engineers etc.) and Manuel Cortes of the TSSA (who represented the shop workers) have been talking about.

    By Colin Potter, Tuesday, November 5, 2019

  • and other businesses?

    We all see how much money was lost by TC over the years. Sadly the small and middle-size businesses do not get the media coverage, and more importantly also not the backup from banks or government (and they themselves are taxpayers) when hit with recession. The numbers to "save" these large concerns are always in the millions, so many zeros the general public do not understand. The Spanish government is at least trying to help those hitting hard times because of the incompetence of this large corporations

    By Elaine Molyneux, Wednesday, October 16, 2019

  • Supporting a mismagaed business in decline??

    Whilst one can only feel remorse for all those workers and clients who are now suffering the financial loss or hardship of TC's collapse, there is no doubt that the blame lies squarely in the lap of the Frankhauser board and previous directors including Green and Fontenia-Novoa who failed to manage a business through its declining, mature phase and failed to ensure that margins and debts were controlled - looking back several years at the cash flow and debts of this monster led one to the conclusion that only a single figure percentage decline in demand would lead to eventual collapse - no good trying to blame the government for its refusal to through throw money at the management's self inflicted ills - their's is a case of sheer arrogant incompetence.

    By Chris Eyre, Tuesday, October 15, 2019

  • Political dogma or Corporate ineptitude?

    How can you blame the demise of TC on political dogma when there had been decades of corporate ineptitude and poor financial management? It sounds like the government were asked for £200m in taxpayers money as TC was on it's death bed - a last resort? It doesn't take a genius to turn down a poor investment and the £200m would have just disappeared into the financial servicing of TC's £1.6bn worth of debt! Maybe the government could put that £200m into the ABTA Lifeline fund to support ex-TC workers...

    By Christian Locke, Tuesday, October 15, 2019

  • Disagree

    It's clear TC could have been run better and also that its demise began when it's bought My Travel. £200 million was petty cash and would not have saved TC, it had debt in the billions years ago and nothing had changed. TC were also way behind other TO,s regarding technology. Fosun didn't have much choice really than to agree a further investment because they were already heavily involved but in the longer term, that money too was also very much at risk. There was too much wrong at TC sadly. Manuel Cortes comments were very naive imo.

    By Keith Standen, Tuesday, October 15, 2019

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