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.”
1/21 Antalya, Turkey
British passengers with Thomas Cook wait in long queue at Antalya airport in Turkey
AP
2/21 Mallorca, Spain
Reuters
3/21 Peterborough headquarters
People carry bags and boxes outside the Peterborough headquarters. A total of 22,000 jobs – including 9,000 in UK – to be lost following administration
PA
4/21 Mallorca
More than 150,000 British holidaymakers need to be brought home, with the government and CAA hiring dozens of charter planes to fly customers home free of charge
AFP/Getty
5/21 Manchester Airport
The group failed to reach a last-ditch rescue deal, triggering the UK’s biggest repatriation since World War II to bring back stranded passengers
Reuters
6/21 Mallorca
Passengers talk to Civil Aviation Authority employees at Mallorca Airport after Thomas Cook declared bankruptcy
Reuters
7/21 Mallorca, Spain
The 178-year-old operator had been desperately seeking £200 million from private investors to save it from collapse
AFP/Getty
8/21 London
Pedestrians walk past a closed branch of a Thomas Cook
AFP/Getty
9/21 Mallorca, Spain
AFP/Getty
10/21 Mallorca, Spain
A British Government official talks to passengers
AFP/Getty
11/21 Peterborough headquarters
A woman carries a box through the carpark
PA
12/21 Crete, Greece
People line up in front of a Thomas Cook counter at the Heraklion airport
Reuters
13/21 Manchester Airport
A British Government official assists passengers
Reuters
14/21 Mallorca, Spain
AFP/Getty
15/21 Crete, Greece
Reuters
16/21 Mallorca, Spain
Passengers sit on the floor
EPA
17/21 Tunis, Tunisia
Tourists, flying with Thomas Cook, queue at the Enfidha International airport
AFP/Getty
18/21 Peterborough headquarters
A man sits outside
PA
19/21 Split, Croatia
Passengers wait inside Split airport
AFP/Getty
20/21 Mallorca, Spain
Thomas Cook staff speak with British passengers
AP
21/21 Mallorca, Spain
Reuters
1/21 Antalya, Turkey
British passengers with Thomas Cook wait in long queue at Antalya airport in Turkey
AP
2/21 Mallorca, Spain
Reuters
3/21 Peterborough headquarters
People carry bags and boxes outside the Peterborough headquarters. A total of 22,000 jobs – including 9,000 in UK – to be lost following administration
PA
4/21 Mallorca
More than 150,000 British holidaymakers need to be brought home, with the government and CAA hiring dozens of charter planes to fly customers home free of charge
AFP/Getty
5/21 Manchester Airport
The group failed to reach a last-ditch rescue deal, triggering the UK’s biggest repatriation since World War II to bring back stranded passengers
Reuters
6/21 Mallorca
Passengers talk to Civil Aviation Authority employees at Mallorca Airport after Thomas Cook declared bankruptcy
Reuters
7/21 Mallorca, Spain
The 178-year-old operator had been desperately seeking £200 million from private investors to save it from collapse
AFP/Getty
8/21 London
Pedestrians walk past a closed branch of a Thomas Cook
AFP/Getty
9/21 Mallorca, Spain
AFP/Getty
10/21 Mallorca, Spain
A British Government official talks to passengers
AFP/Getty
11/21 Peterborough headquarters
A woman carries a box through the carpark
PA
12/21 Crete, Greece
People line up in front of a Thomas Cook counter at the Heraklion airport
Reuters
13/21 Manchester Airport
A British Government official assists passengers
Reuters
14/21 Mallorca, Spain
AFP/Getty
15/21 Crete, Greece
Reuters
16/21 Mallorca, Spain
Passengers sit on the floor
EPA
17/21 Tunis, Tunisia
Tourists, flying with Thomas Cook, queue at the Enfidha International airport
AFP/Getty
18/21 Peterborough headquarters
A man sits outside
PA
19/21 Split, Croatia
Passengers wait inside Split airport
AFP/Getty
20/21 Mallorca, Spain
Thomas Cook staff speak with British passengers
AP
21/21 Mallorca, Spain
Reuters
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.”
