British PM questions bosses’ big fat salaries
NEW YORK/LONDON:
After the collapse of Thomas Cook left hundreds of thousands of passengers reliant on the British state to repatriate them, Prime Minister Boris Johnson questioned whether bosses should have paid themselves so much ahead of its demise.
Running hotels, resorts and airlines for 19 million people a year, it has around 600,000 people abroad and will need the help of governments and insurance firms to bring them home from places as far afield as Cancun, Cuba and Cyprus.
Johnson questioned why the state should be left responsible for the actions of handsomely paid directors and said tour operators should have some sort of insurance against such debacles.
“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.
“You need to have some system by which tour operators properly insure themselves against this kind of eventuality,” he said.
Thomas Cook was brought down by a US$2.1 billion (RM8.78 billion) debt pile, built up by a series of ill-fated deals, that hobbled its response to nimble online rivals.
It had to sell three million holidays a year just to cover interest payments.
With the business draining cash, chief executive Peter Fankhauser found its lenders were no longer willing to step in.
He has earned £8.3 million, including £4.3 million in 2015.
The British government decided Thomas Cook was a bet it did not want to take.
Thomas Cook’s demise, announced in the early hours of Monday after failing to secure a deal with creditors or a government bailout, sparked alarm at hotels where some customers have been asked to pay their bills again by out-of-pocket resort owners.
“I think the questions we’ve got to ask ourselves now: how can this be stopped from happening in the future?” said Johnson.
Emergency flights brought 14,700 people back to the United Kingdom on 64 flights on Monday, and around 135,300 more were expected to be returned over the next 13 days, said Britain’s aviation regulator.