Losses from the collapse of Thomas Cook could reach more than £500million – and the taxpayer might be forced to foot a chunk of the bill.
The effort to repatriate stranded holidaymakers on a fleet of chartered jets, codenamed Operation Matterhorn, is already set to cost £100million.
But the amount owed to customers who lost future bookings is almost four times that figure at around £420million. On top of this, the amount Thomas Cook owes hotels runs into tens of thousands of pounds.
Losses from the collapse of Thomas Cook could reach more than £500million – and the taxpayer might be forced to foot a chunk of the bill
This brings the cost of the travel firm’s demise to an estimated £520million but this could rise once redundancy payments for staff are brought into account.
‘We lost £800 on holiday gift cards’
A family is around £800 out of pocket after discovering the Thomas Cook gift vouchers they had been saving for years are now worthless.
A family is around £800 out of pocket after discovering the Thomas Cook gift vouchers they had been saving for years are now worthless
Leanne Jones, 28, fiance Andy Payne, 31, and sons Harrington, five and Hudson, 18 months, had been collecting the gift cards so they could book to go to Disneyland Paris in December. Instead of asking for birthday presents for nearly three years, they had asked family for vouchers.
But Thomas Cook’s collapse means the vouchers have no value. Miss Jones, from Milton Keynes, said: ‘Harrington is heartbroken, we all are. Now it’s back to square one for saving up for our dream holiday.’
Leanne Jones, 28, fiance Andy Payne, 31, and sons Harrington, five and Hudson, 18 months, had been collecting the gift cards so they could book to go to Disneyland Paris in December. Instead of asking for birthday presents for nearly three years, they had asked family for vouchers
Insiders fear the mammoth bill could drain funds held by the Air Travel Organisers’ Licence (Atol) scheme, which covers payments in the event a firm goes under.
Although Atol is funded through industry levies, the taxpayer could be lumbered with costs if it requires extra cash from the Government.
However, the Civil Aviation Authority (CAA) which administers Atol, insists the scheme has enough money to cover the costs.
Richard Stephenson, director of the CAA, told The Times: ‘We are confident that there are sufficient resources… to meet the Atol liabilities that will arise from the liquidation of Thomas Cook and therefore the taxpayer will not be exposed.’
It came as members of the Commons committee for business, energy and industrial strategy announced an inquiry into the demise of the travel firm.
The probe will question Thomas Cook bosses, including chief executive Peter Fankhauser, as well as the company’s auditors PwC and EY, the Financial Reporting Council and the Insolvency Service. Boris Johnson has criticised Thomas Cook bosses for paying themselves millions while the business ‘went down the tube’, causing 9,000 staff to lose their jobs.
Mr Fankhauser has taken home £8.4million since 2014, including £4.6million in bonus payments linked to performance. His predecessor Harriet Green, who ran the firm between 2012 and 2014, received almost £11million in total pay.
Since the company’s collapse on Monday, critics have demanded they pay the money back. And there was further anger after a video emerged showing a Thomas Cook boss being cheered by staff at the Frankfurt office of Condor, the firm’s sister airline. Christoph Debus was applauded after bosses secured a 380million euros (£336million) German state loan to keep flying.
Mr Debus was the chief airlines officer of Thomas Cook’s UK airline and was given the role of airlines executive at Condor soon after the travel firm’s demise. Reacting to the video, ex-Thomas Cook cabin crew member Jenna Kenny, 31, said: ‘It’s rubbing salt in the wound.’
Tom Williamson, who worked for the firm for 19 years, said: ‘I’m sorry Christoph, but it feels like you have sacrificed the UK businesses to keep the others going.’
Amid outrage over his new role, Mr Debus wrote on Twitter: ‘I never, ever intended to cause offence or appear inconsiderate. I am heartbroken that any of my colleagues feel that I have been, and for that I am truly sorry.’
More than 46,000 holidaymakers have been flown home under Operation Matterhorn, the CAA has reported.