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Thomas Cook collapse: MPs and financial regulator may investigate - business live Thomas Cook collapse: Customers hit with hotel bills - business live
(about 1 year later)
Time for a recap Here’s our latest news story on Thomas Cook:
Pressure is building on Thomas Cook’s management and auditors after the holiday firm collapsed under a mountain of debt on Monday. Thomas Cook directors could face inquiry as rescue effort continues
Parliament’s business committee has pledged to examine what went wrong. Rachel Reeves MP says there are “serious questions to answer, including about the company’s accounting practices, its renumeration policy and practice, and about the stewardship of the company.” Regulators and MPs were considering investigations into Thomas Cook’s auditors and directors as the fallout from the travel firm’s collapse continued on Tuesday, with thousands of staff and suppliers facing uncertain futures and more than 100,000 holidaymakers still due to be brought home on government rescue flights.
The Financial Reporting Council (which monitors the accountancy and auditing professions) is pondering whether to launch an “urgent” inquiry. Britain’s accountancy regulator, the Financial Reporting Council (FRC), said it was considering the case for investigation and enforcement action “as a matter of urgency”, while MPs on the business select committee said there were “serious questions to answer” about how the firm was run.
Such investigations could examine how Thomas Cook paid around £35m to its last three CEOs over the last 12 years, and whether its accounts were fully open and transparent. The government has already announced a fast-track inquiry into the collapse by the Insolvency Service, which is charged with closing down the 178-year-old holiday business.
Business secretary Andrea Leadsom also piled pressure onto directors, saying the Insolvency Service needs to get to the bottom of the situation. The CBI agrees. Potential concerns for the FRC include the extent of “exceptional items” on the company’s balance sheet, which could have swayed investors and affected annual results – as well as the profit-related bonuses paid to directors.
Thomas Cook repatriation from Crete: to me, this seems organised and surprisingly efficient so far. Passengers v positive about the process and, indeed, about the company. But very unhappy about directors’ bonuses. “Immoral”, “disgusting”, “awful”... pic.twitter.com/S1aWUPfROp Thomas Cook was audited by two of the UK’s biggest accountancy firms, with EY succeeding PwC from 2017. The tour operator had a series of finance chiefs over the past two years.
The warnings came on the second day of Operation Matterhorn, which is repatriating the 160,000 people who were holidaying with Thomas Cook when it fell into liquidation. The pay of the last three chief executives of Thomas Cook has come under increased scrutiny.
The Civil Aviation Authority was planning to bring over 16,00 people back to the UK today, having repatriated nearly 15,000 on Monday. The CAA said the operation was going pretty well, although not without some hurdles. Labour’s John McDonnell has urged the former bosses to repay their bonuses while the Confederation of British Industry said “questions are now rightly being asked” about the £35m paid out over the past 12 years to Manny Fontenla-Novoa, Harriet Green and Peter Fankhauser....
Some flights have been delayed, while others are returning passengers to Manchester rather than their intended destinations (such as Newcastle or Gatwick). More here:
Thomas Cook customers have also faced demands from hotels to pay bills, despite having already stumped up for their holidays. One told the Guardian that notes were pushed under their doors (photo here), showing how much they had to pay. Thomas Cook directors could face inquiry as rescue effort continues
Customers have also been warned not to fall victim to fraudsters, who may claim to be calling from Thomas Cook with a refund. More evidence of problems in Cuba tonight, from a Thomas Cook air hostess:
Rival holiday firm TUI, has been forced to cancel some holidays too, having booked its customers onto Thomas Cook flights. THOMAS COOK CREW BEING HELD IN THEIR HOTEL IN HOLGUIN, CUBA - HOTEL WILL NOT LET THEM LEAVE!! Asking for $3000 but won’t accept payment by credit card!! They need help ASAP!! @itvnews @BBCNews @BBCWorld RT please!!
Anger is building against airlines and holiday firms for hiking their prices, as disappointed Thomas Cook customers try to find alternative flights. More information from Cuba, where hoteliers don’t appear to believe the UK authorities will cover bills....
Airlines accused of ramping up prices after Thomas Cook collapse Thomas Cook crew being held hostage in Cuban resort until payment received for accommodation, CAA not recognised by hoteliers @guardian @UK_CAA @UKinCuba any help appreciated!!! pic.twitter.com/r1JGiGm2qu
The BBC have also spoken to Thomas Cook customers who’ve been told to pay for their hotel rooms, despite having already paid for their holidays (a problem we flagged up earlier) @ukincuba Thomas Cook holidaymakers protected by ATOL, but what about staff left stranded?? My mum is stuck in Cuba and cannot leave until the bill is settled!
Here’s a flavour: Here’s the ambassador again:
Jess Beeton, on holiday with her partner Richard Berrington, said “everyone who booked through Thomas Cook has been locked out of the rooms”. I much appreciate the patience of customers continuing to deal with difficult circumstances. Working with urgency to resolve this. https://t.co/r4QW65AtWJ
She added: “The only option we were given was to pay what Thomas Cook hasn’t, or get our stuff and leave.” Sounds like Condor has its rescue loan:
Jess said that after the hotel locked them out, she managed to gain access to their room by saying she had medication there that she needed to take. Breaking: The German government and state of Hesse has decided to intervene to rescue Thomas Cook's German airline, Condor. Offering 380 million euros in form of loan guarantees (subject to EU approval). Airline is profitable and employs 4,900 people.
Once inside, she and Richard locked themselves in, but they have since paid £520 on a credit card so they can stay at the hotel until their due departure date from Spain on Sunday. Here’s our latest story about the Thomas Cook staff who’ve lost their jobs:
I’ve spoken to holidaymakers in this situation today. Being asked to pay thousands of pounds for a room they’ve already paid for. #ThomasCook 'Everyone has been kicked out of their rooms' https://t.co/iZDqjLnjNQ 'I've worked for Thomas Cook for 36 years': Staff voice shock at collapse https://t.co/yOgTmJHGvS
Thomas Cook’s bosses, directors and auditors have just been warned that they could be hauled to Westminster to explain themselves. Now this is worrying.
Rachel Reeves MP, chair of the BEIS Committee, says parliament wants answers about why the company collapsed, who made mistakes, and how bosses were paid so much for running the firm. Several people have contacted the UK Embassy in Cuba, saying they or their parents are holidaying with Thomas Cook -- and have been ordered to pay massive bills, running into thousands of pounds in some cases.
“The public will be rightly appalled that as Thomas Cook mounted up debt and as the company headed for trouble, company bosses were happily pocketing hefty pay-packages. @SkyNewsBreak my mum is in Cuba and they are being charged £1000 to leave the hotel following the Thomas Cook problems #help #advice
Now, in the aftermath of the company’s collapse, as frustrated travellers are stuck abroad, when holidays are being cancelled and thousands of staff are losing their jobs, there are serious questions to answer, including about the company’s accounting practices, its renumeration policy and practice, and about the stewardship of the company. My parents are currently away in Cuba and their hotel won’t let them out until they’ve paid £4k therefore they will now miss their replacement CAA flight 😩 #thomascook #CAA
As a Committee, we are keen to seek answers to these questions and will discuss at the next meeting how we can do that.” The embassy says it is aware of the problem, and confirmed that hotels should get the money they’re owed through the ATOL protection scheme - not from individual holidaymakers.
Football clubs have offering help to supporters who bought travel packages to games through Thomas Cook’s sports arm. Sherry, thanks, and sorry your mother are put in this position. To confirm, all hotels with ATOL protected #ThomasCook customers have financial assurances from @UK_CAA. We are aware of several hotels in Cuba asking for payment are working to resolve urgently
Chelsea has pledged to cover the costs for fans who booked travel with Thomas Cook to Lille or Southampton, and who now need to rebook. The UK ambassador in Cuba (Our Man in Havana) says the embassy is working hard to help....
Liverpool says it is trying to help supporters who’d bought packages through collapsed Thomas Cook for their next two home games -- against FC Salzburg in the Champions League, and the Premier League fixture against Leicester. To confirm, all hotels with ATOL protected #ThomasCook customers have financial assurances given by @UK_CAA (referred to below). We are aware of several hotels in #Cuba pressing guests for payment are working to resolve urgently https://t.co/8nKSIGBBf3
Thomas Cook customers have been warned not to fall for fraudsters, who may try to trick them out of their bank details. Some readers have written in to argue that the government should have kept Thomas Cook afloat.
Barclays Bank has warned people to be on their guard, in case a scammer phones up pretending to be able to help with rebooking a flight. Tom Jackson of Stockport, Greater Manchester, says the bill would have been tiny, compared to the cost of the financial crisis rescue package:
If your company has booked #ThomasCook for business flights, make sure staff are aware of fraudsters who could exploit the company's administration. https://t.co/v8lOY3kiu9 When the Royal Bank of Scotland experienced financial meltdown during the 2007-8 financial crisis Gordon Brown came to the rescue with £46bn government support, claiming that RBS was too big to fail.
The Take Five campaign to raise fraud awareness also has some advice, including It’s ironic that this bank requested its customer, Thomas Cook, to seek £200m to avoid administration and is now responsible for its demise, along with those who ran the travel company and the government. Another old established company bites the dust.
If you are a Thomas Cook customer, don’t be tricked into giving a fraudster access to your personal or financial details: pic.twitter.com/C3WRleTOHi But Polly Bird of Bedlington, Northumberland, argues that Thomas Cook customers are getting decent treatment compared to other people who get caught up in travel chaos.
One Twitter user flags up that people are being targeted: We live in strange times. UK holidaymakers were left stranded by holiday company Thomas Cook and the government rushed to organise planes to bring them home (Ministers ‘scuppered Thomas Cook deal’, 24 September).
FB - the scams are starting."Had a phone call from 'Thomas Cook refund agent' going to give me a refund on the holiday I've purchased (no I havent) just need my card details & 3 digit number on back to refund me.FFS.this is disgusting..people have lost their jobs & livelihoods!" UK citizens were left traumatised in adverse conditions having survived hurricane Irma and the government left them struggling to make their own ways home.
People who booked holidays through travel giant TUI are now caught up in Thomas Cook’s collapse. The case for bailing out Thomas Cook | Letters https://t.co/WdG6iFznBT
TUI, who are Europe’s biggest tour operator, had used Thomas Cook Airlines to fly some of its customers to and from their destinations. One Thomas Cook holidaymaker in Corfu tweets that Operation Matterhorn isn’t going too smoothly.
It has now decided to cancel all such holidays, up until the end of October. Her flight home was cancelled on Monday, then the next one was full, so after spending all day at the airport they were sent to a hotel. There was no flight today, so they’ll have to see what happens tomorrow:
In a statement, TUI says: 10 hours later and we’re now on a coach going to a hotel. We were told it was for 1 night but the ATOL lady got on the coach last minute and said ‘oh it’s now for 2 nights, you’ll PROBABLY fly home Wednesday.’ What a fucking joke #ThomasCook (8) I want to go home now please
We’ve unfortunately had to cancel any TUI and First Choice bookings featuring Thomas Cook flights for any customers due to travel from Monday 23rd September until 31st October 2019. The advice is not to travel to the airport. We will be organising full holiday refunds for these customers and will process these as quickly as possible. On the phone to CAA again and they’ve told us to ‘just turn up at the airport tomorrow and hope you get on a flight’🙃🙃 after sitting on the airport floor for 10 hours yesterday I am not doing that thank you very much (20) #ThomasCook
For any TUI and First Choice customers with Thomas Cook flights due to travel after this date, please bear with us as we look at other options and alternatives for you as a priority. Reuters is reporting that Germany’s government has decided to give Condor, Thomas Cook’s German airline, a bridge loan.
We are working hard to help affected customers find alternative holidays, so we will do everything we can to help in these extraordinary circumstances. The loan, in partnership with the state of Hesse, could be worth almost €400m, and would would allow Condor to keep operating.
As we mentioned earlier today, TUI is also pledging to fly home any customers who are already on holiday, and had been scheduled to return on a Thomas Cook flight: Quite a contrast with London’s refusal to bail out Thomas Cook; the difference, though, is that Condor is profitable rather than insolvent.
Tui boss says it will fly home customers booked on Thomas Cook flights The Unite union has called for “radical reform” of financial regulation in the UK, following the Thomas Cook crisis.
Glasgow Airport has just detained four of Thomas Cook’s aeroplanes, as ‘security’ for the money it is owed by the company, reports the BBC’s Connor Gillies. Unite also hit out at the government for announcing a probe into the company - arguing it’s simply too late for staff who’ve lost their jobs.
Glasgow Airport has detained four Thomas Cook planes 'as security' for unpaid bills following the collapse of the travel giant. Unite assistant general secretary Diana Holland says the current system is broken:
The last Thomas Cook flight landed in Glasgow early yesterday morning, from Orlando in Florida, a few hours after the company went into liquidations. “The thousands of workers who yesterday lost their jobs, and the hundreds of thousands of people who had their holidays cancelled, will draw no comfort from the announcement of a probe by the Official Receiver.
Scheduled departures from Glasgow were then suspended, as at other UK airports. “Yet again the Government is guilty of being asleep at the wheel. It failed to learn the lessons from Carillion’s collapse. If the Government had done so, the collapse of Thomas Cook may have been avoided.
Airports owed landing fees by Thomas Cook will presumably be joining the ranks of creditors, who must file claims with the Insolvency Service. “The UK financial regulatory system is broken and without proper checks and balances, we have no idea if other Thomas Cooks and Carillions are in the pipeline and no ability to prevent them from occurring.
Spain’s acting tourism minister has said there are 53,000 British tourists currently travelling with Thomas Cook at Spanish resorts. “The collapse of Thomas Cook has not been allowed to happen in other countries as their governments and regulators have mechanisms to stop such a disastrous and immediate collapse as has happened in the UK.
Reyes Maroto also told reporters in Madrid that her ministry has been in touch with German and Swedish authorities to ensure Thomas Cook subsidiaries continue to operate at least for the winter season, Reuters reports. “Radical reform of the UK’s financial regulatory system must be an absolute priority to prevent other workers in the future being dumped on the scrapheap without warning, through absolutely no fault of their own.”
Maroto also chaired a meeting with regional tourism ministers from Canary Islands, Balearic Islands, Valencia, Catalonia and Andalusia and delegates of main Spanish touristic employers’ organizations to evaluate the impact of the collapse of Thomas Cook today. Money Saving Expert, the consumer finance site, reports that some people who’d booked holidays with Thomas Cook have received refunds.
Here’s one of the notes pushed under the doors of Thomas Cook holidaymakers in Mallorca, asking them to pay bills owed by the company (see earlier post). Martin Lewis, founder of MoneySavingExpert.com, says the “chargeback system”, which lets customers reverse a credit card payment, is working.
Here’s a couple more photos of Thomas Cook customers trying to get home today: “The news that people are starting to get payouts should start to allow those people who’ve booked with Thomas Cook and have been holding their breath over the weekend at the panicked thought of lost money to breathe a sigh of relief.
t “It’s still early days but at least this shows that attitude-wise, the system is working. Most people will be getting their money back through the ATOL scheme, but those who aren’t getting their money back through that and who paid on plastic we’re now seeing get these chargeback payouts from their card providers.
One Thomas Cook holiday maker describes the situation in his hotel as a ‘giant self-help group’ after guests were forced to sort out payment issues in the absence of any official help. Sky News have also interviewed a Thomas Cook cabin crew worker about the moment they heard the company had gone under - and it’s an emotional read.
Reriree Robert Rowe, 67, his wife Maria are staying at Hotel More, a family run hotel in Alcudia town in Mallorca. Julie Burns told Sky:
Rowe said that all hotel guests who were on Thomas Cook packages had notes put under their door on Monday morning asking them for money. He contacted CAA and was told that they were Atol protected and shouldn’t pay the hotel. I was on a flight when we found out that we were losing our jobs. I was positioned out to Newcastle for four days and we’d been coming back from Antalya.
However many guests were unsure about what to do, he says (via our callout) Before the flight, one of the girls had her phone on so we could see Thomas Cook’s chief executive, Peter Fankhauser, coming out of a meeting and at the time it seemed positive.
“95% are people here are pensioners and only a few people can use smartphones and people weren’t getting information as there were no reps around.” We were all a little upbeat, although we had got on the flight not knowing if we were going to be paid for it.
“The hotel manager had asked for people’s bank details. It was very emotional, people were upset. Some guests were trying to sort it out and pass on the information from CAA. It was like a giant self-help group.” The most heartbreaking thing is that the passengers knew what had happened before we did.
Rowe said twenty or thirty guests held an impromptu meeting on Tuesday morning and reiterated that nobody should pay. When we landed, they had their phones on and they saw the news.
“ The hotel management haven’t asked for any more money. We’re laying low, we have four more days here. I feel sorry for them in a way because they’re a small family run hotel and it seems bad that Thomas Cook have put small traders in this position. But I think the way they handled it was poor. After all the passengers had got off, the senior flight attendant came up and she went, “That’s it guys, game over”.
“I come from Melbourne in Derbyshire, where Thomas Cook started. There’s Thomas Cook Close, Thomas Cook Gardens and Thomas Cook almshouses. I don’t know what they’re going to be called now.” I said “What do you mean?” and she said “It’s over, we’re finished”.
A lot of people face losses because of Thomas Cook’s collapse. We all started crying and were really upset...
The companies suppliers could be left with unpaid bills, while employees need to submit claims to obtain the redundancy payments and wages they’re entitled to. The full piece is online, here.
The Insolvency Service has more details here. Today I did the most heartbreaking interview with Julie, a #ThomasCook cabin crew member who found out she had lost her job as her plane landed. She was left stranded and asked to pay for her hotel. Let's not forget those who have lost their livelihood. https://t.co/CHYHyi5vVG
If you are an employee or creditor affected by #ThomasCook, we have useful information about how to make claims in the liquidation https://t.co/UpfHpctze5 pic.twitter.com/E8RfjuVpve Newsflash: It’s all gone wrong for Northern Ireland bus-maker Wrightbus.
Here’s our news story about the accountancy watchdog sniffing around Thomas Cook’s collapse: Sky News is reporting that Wrightbus, maker of London’s ‘Boris Bus’, will fall into administration on Wednesday.
Thomas Cook collapse: accounting watchdog weighs up investigation Deloitte are expected to be appointed as administrators, putting 1,300 jobs at risk.
The Confederation of British Industry has backed calls for a probe into the “fat cat” pay at Thomas Cook. Sky’s Mark Kleinman says:
Josh Hardie, deputy director-general at the CBI, says (via the Evening Standard). Sources close to one of the bidders said on Tuesday evening that the appointment of Deloitte was “almost certain” to happen within 24 hours, putting about 1300 jobs at risk.
Questions are now rightly being asked about directors’ remuneration and decision-making. The news will represent a devastating blow to Northern Ireland’s manufacturing sector, with the prospects of Wrightbus being salvaged in its current form now understood to be remote
Disproportionate rewards are a lightning rod for public discontent, so high pay can only ever be justified by high performance over the long term. The move means Wrightbus failed in a last-minute dash to find a buyer, following weeks of talks.
The CBI represents Britain’s bosses, so won’t have enjoyed headlines about “fat cats creaming off £47m”. Wrightbus in last-minute search for buyer to avoid collapse
Holidaymakers are sharing their stories of further difficulties as they try and return to the UK (through our callout to readers). Thanks to the un-prorogation of parliament, the government could face an urgent question on the collapse of Thomas Cook tomorrow.
Nikita Locke, 22 was on a Thomas Cook package holiday at the SunConnect One hotel in Monastir, Tunisia with her sister Shannon and two young children. Antoinette Sandbach confirms she has tabled a UQ on Thomas Cook. There are tonnes of UQs going in as MPs aim to prove this isn't just about Brexit
They were supposed to be taken by coach organised by the hotel to Enfidha–Hammamet airport on Tuesday but were advised by the hotel to book their own taxi seven hours before their 1015 flight to Birmingham was due to depart, in case of disruption.
They paid 120 Tunisian Dinar, about £33.50, for the taxi in advance and were given a receipt by hotel staff but when the taxi arrived the driver claimed he hadn’t been paid by the hotel and demanded more money.
Locke said:
“It was 3am and we had the two kids screaming and crying, standing outside the hotel.
My sister and I were so stressed wondering if we were going to make it to the airport. I just refused to pay out any more money.”
The hotel finally paid the driver 45 minutes later, and the family were taken to the airport.
Their flight was due to depart at 10.15 am, but it’s now scheduled to leave at 1.20pm.
Reminder: you can shares your experiences here.
In Crete, authorities say eight UK-bound flights have been chartered to fly Thomas Cook customers back home today.
Some 20,000 Britons have been stranded on the island which has borne the brunt of the fallout in Greece of Thomas Cook’s bankruptcy. Two planes are scheduled to fly to Gatwick, two to Manchester with the rest slated to fly to Newcastle, Birmingham, Glasgow and Bristol. Around 50,000 Thomas Cook customers have been marooned nationwide.
Greece, already hard hit by its long-running debt crisis, has been hugely affected by the tour company’s collapse with the country’s tourism confederation estimating today that damages could reach €500m (up from initial estimates of €300m).
On Tuesday Haris Theoharis, the tourism minister, said the firm owed outstanding payments from mid-July to hotels and other businesses.
As the engine of the Greek economy, the tourism industry contributes around a quarter of total economic output, employing an ever growing number of people – at last count one in five.
Relief measures are being considered by the centre right government once total damages are calculated. Following an urgent meeting of tourism and finance ministers last night it emerged that tax cuts are among the measures being considered for enterprises worst affected by the tour operator’s liquidation.