Anger over executive pay and perks as Thomas Cook repatriation continues

Directors at the failed travel company received nearly £50 million over the past decade.

A closed Thomas Cook shop in Bristol (Ben Birchall/PA)
A closed Thomas Cook shop in Bristol (Ben Birchall/PA)

Anger is growing over millions of pounds in payments made to Thomas Cook bosses before the tour operator collapsed.

Top executives shared more than £16 million between them in pay and perks over the past five years while the group’s profits have been in sharp decline.

Chief executive Peter Fankhauser and his predecessor Harriet Green were paid £9.4 million between them over the past five years.

However, £4.1 million of Mr Fankhauser’s pay was in shares which are now worthless.

Thomas Cook’s chief financial officers – Bill Scott and Michael Healy – bagged more than £7 million in total.

The payments were made despite a sharp decline in profits.

Prime Minister Boris Johnson questioned whether senior managers should pay themselves “large sums of money” as their businesses go “down the tubes”.

Speaking in New York after the launch of a 1,000-flight holidaymaker repatriation operation part-funded by the Government, he said: “I have questions for one about whether it’s right that the directors, or whoever, the board, should pay themselves large sums when businesses can go down the tubes like that.”

Shadow chancellor John McDonnell said Thomas Cook bosses have “a moral responsibility to return their bonuses”.

He said: “They created this mess and there are large numbers of people losing their jobs.”

Thomas Cook’s demise in the early hours of Monday morning means around 9,000 UK workers face being out of work.

Business Secretary Andrea Leadsom has called on the Insolvency Service (IS) to “fast-track” its investigation of Thomas Cook.

The Financial Reporting Council, regulator for the accountancy profession, is also looking at whether to launch an investigation into the behaviour of the company’s auditors.

And the Business Select Committee said it would discuss whether to launch its own probe into the collapse and the behaviour of management.

The Civil Aviation Authority (CAA) launched the UK’s largest peacetime repatriation on Monday, bringing 14,700 Thomas Cook customers home on 64 flights.

That was 95% of the holidaymakers who were originally booked to fly home on that day.

A further 135,000 passengers are expected to be brought back on rescue flights over the next 13 days, including 16,800 on 74 flights on Tuesday.

The operation is expected to cost approximately £100 million.

Dame Deirdre Hutton, who chairs the CAA, said around 60% of passengers were protected through the Atol scheme.

That means the fund built up from Atol contributions will cover the same percentage of the total bill, leaving taxpayers to make up the remaining 40%.

Asked about reports of hoteliers demanding holidaymakers pay again for their stay, Dame Deirdre said every hotel with an Atol-protected customer has been sent a letter guaranteeing that they will be paid.

She acknowledged “there is some confusion in hotels”.

Liam Archer and his partner Ciara Edwards, both from Gloucestershire, were asked by staff at their hotel on Fuerteventura in the Canary Islands to pay the equivalent of more than £800 to secure their Thomas Cook booking.

Mr Archer told the PA news agency: “We had a note through our door asking us to go to reception. We were then told we had one hour to pay 942 euro otherwise we would have been kicked out of the hotel.

“We rang the CAA and they told us to pay and keep receipts. Very stressful as we have had to ring around to find the money.”

The collapse of Thomas Cook left around one million people with future bookings scrambling to make alternative arrangements, with some accusing rival travel firms of unfairly hiking prices.

David Kirkwood posted screenshots on social media appearing to show how a holiday in Cyprus increased in cost by £800 between 7.30am and 11.30am on Monday.

He described the firm as “soulless”, “money grabbing” and “opportunist”.

A spokeswoman for the company said its pricing is “based on the principle of supply and demand”, adding that it is hoping to increase its flight capacity to help customers.

Thomas Cook customers are being urged to check for further information.

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